ABSTRACT
The world has evolved to a time where the information and communication technologies and the internet technologies run through every activity of man. Trade and commerce is no exception to this. The assimilation of these internet technologies and ICTs in the trade and commercial sector leads to what is now known as ‘electronic commerce’ or ‘e-commerce’. Currently, a lot of transactions are carried out on the internet without the need for physical contact or communication between the parties to such transactions. In spite of the advantages which this may pose, which are clearly endless, the fact that there is no adequate protection and security in these transactions will continue to cause a disinclination on the part of the buyers. This work seeks to address the current issues which exist in the practice of e commerce and the extent to which consumers are protected in electronic transactions, while suggesting recommendations for the issues which would be identified.
Keywords: Domain, Domain names, Consumer, Protection, Transaction in Nigeria.
Introduction
The advantage of the digital age is endless; it makes life easier for everyone. The availability and continued growth of Information Technologies (IT), especially the internet technologies has created numerous opportunities for users all over the globe and these services have been used by users for numerous purposes.[1] The use of internet technologies to conduct business online is known as Electronic Commerce (E-Commerce).[2] Electronic commerce is now an alternative and convenient way of conducting business both nationally and internationally.[3] E-commerce requires confidence and trust; the satisfaction that transmitted orders or invoices have not been altered and emanate from whomever they appear to be from. There is need for a guaranteed level of privacy and confidentiality with respect to information. This revolutionary way of conducting business has since broken down the geographical boundaries of the market, where people originally visited markets to buy or sell.[4] E-commerce is a remarkable source of competitive advantage for businesses and a new space for consumers.[5] In the coming years, growth and profitability will depend most likely the ability to introduce these new emerging technologies and adopt new methods of business transactions.[6] The major developed countries like the US have fully adopted this internet service in their system and have taken measures to protect their citizens in the use of the service. Nigeria, however, is yet to take any such measures. The aim of the study would be to examine the nature of domain names and e-commerce in Nigeria and carry out an understudy of the legislative framework for the protection of consumers in electronic transactions.
Domain Names
A domain name is the internet address where users can access a company, individual or organization’s website.[7] A domain name is a unique web address for the web server providing web resources and services such as www.google.com.[8] They are generally seen as labels for the internet presence of an organization. In a knowledge based economy, intangible assets are vital. Therefore, a domain name on the internet not only serves as an intangible asset but also has brand meaning. It gives any user the feeling that they are dealing in a safe and secured space and by extension, their information and details are safe. Similar to real property, not only can a domain name be used for recognition purposes, but it can also be viewed as cyber property, thus a valued asset for investors. Domain names are like electronic real estate. It is the web address of your site and it is unique, as no two parties can ever hold the same web address simultaneously.
Domain names can be held by only one person; even though similar domain names can be simultaneously registered by different people, for example one person can register ‘esther.com’ while another registers ‘estherie.com’ ‘esther.net’, or ‘esther.co.uk’. However, only one person can hold any one of those names at any given time.[9]
There are a number of factors that should be considered in picking a domain name as they affect the domain names value and they include; length (the shorter the name, the easier it is to recall and as a result increases sales opportunities), type of use, and type of TLDs (including numbers and hyphen).[10] Domain names are valuable to every organization and in order for an organization to get the value of these names, there are determining factors such as: the number of search results in the major search engines for the keywords in the domain name, extension saturation (the top-level domain), number of words in the domain name, extension of the domain name, number of hyphens in the domain name, and number used.[11] Domain names range from a combination of letters and numbers to a combination of the various domain name extensions such as ‘.com’ ,’.net’,’ .org’ amongst others.[12]
On a basic level, domain names are important because the Internet’s addressing scheme is not very effective without them. Each computer on the Internet has an Internet protocol (IP) address: a unique string of four numbers separated by periods. Domain names are used to establish a unique identity. Organizations can choose a domain name that corresponds to their name, helping Internet users to reach them easily.[13] An important function of domain names is to provide easily recognizable and memorable names to numerically addressed Internet resources. This abstraction allows any resource to be moved to a different physical location in the address topology of the network, globally or locally in an intranet. Such a move usually requires changing the IP address of a resource and the corresponding translation of this IP address to and from its domain name. On one hand, online users can link quickly to corporate websites, increasing traffic and possibly sale opportunities; on the other hand, a domain name can be considered an investment target. Domain names can be regarded as extensions of a corporate brand and trademarks on the Internet.[14] Some users naturally consider that a company’s name is the domain name, such as apple.com and ford.com. An effective domain name is not only a brand, but also an intangible asset.
Electronic Transactions
E-Transactions, also called e-commerce reflects the effect on the information and communication technologies in the everyday trade and business transactions between men, and Nigeria has not fallen short of the effect of the internet technologies on trade and business relations. Like all other concepts, the term ‘e-commerce’ has been subjected to several definitions. According to the Organisation for Economic Corporation and Development (OECD), e-commerce has no universal definition.[15] An e-commerce transaction can be defined as ‘the sale or purchase of goods or services, conducted over computer networks by methods specifically designed for the purpose of receiving or placing of orders.[16]
Ajetunmobi defines e-commerce as ‘the process whereby goods and services are purchased through some electronic medium’.[17] Electronic Commerce has been described as being relatively inexpensive and easier to organize, as compared to cash, cheque and verbal transactions.[18]Akintola et al. has also defined e-commerce as buying and selling of products or services electronically via the Internet and other computer networks.[19] Orimobi has defined e-commerce as the ‘use of the internet for marketing, identification, payment and delivery of goods and services’.[20]
The steady growth of electronic commerce in everyday business and its potential benefits cannot be overemphasised. Electronic commerce is fast becoming the preferred method for concluding day to day business transactions, especially in the retail trade and this can largely be attributed to the immense benefits which the platform affords, chief of which is its convenience.[21]
The benefits of e-commerce are numerous. The nature of e-commerce is such that it reduces the barriers to trade because the time and distance does not matter in terms of electronic transactions. E-commerce also facilitates the sharing of information within and across organizations, thus, the speed at which transactions are concluded increases. For instance, online transactions that take place on sites like Jumia, Konga, OLX and Jiji can be concluded with a certain amount of speed at the convenience of both the buyer and the seller.
Apart from these, electronic commerce propels economic globalisation. A company that provides services using this medium can reasonably expect to provide these services worldwide. For instance, the benefit gained through the Ali-Express platform which is run from China and it makes deliveries to many countries, including Nigeria. This will no doubt go a long way to improve the economy in China, as sellers are given the opportunity to sell their products using the platform.
Current Position of the Law on Electronic Commerce
With the recent developments of internet in the last decade, the need for the government to be more concerned with protecting the interests of e-consumers has increased simultaneously. It has become evident that the technological advancement has created serious legislative challenges in many countries of the world.[22] In this regard, developing and developed nations have incorporated legislative enactments to protect the consumers in the practice of e-commerce.[23]
In terms of ICT development as well as e-commerce, Nigeria has definitely not been excluded from the impact this has on economies. As at 2008, there was a 90% increase in the number of Nigerian internet users from the year 2000.[24] This has also opened up a floodgate of fraudulent activity online, commercial disputes arising from sale and delivery; and other undesirable outcomes.[25] It is disappointing and unfortunate that Nigeria does not have a comprehensive legislation that provides for electronic transactions despite the advancement and benefit of the digital age. Today, it can be said that a large percentage of businesses carry out their business transactions online, with platforms like Jumia, Konga, OLX, Jiji, and even Instagram.
It is however important to note that in Nigeria, the Electronic Transaction Bill 2015 is the first legal framework ever in our country that provides the legal foundation for electronic signatures and guarantees predictability in contracts made electronically.[26] The relevant Bills are Electronic Transactions Protection Bill (ETB); Cyber Security & Information Protection Bill 2010; National Internal Security Bill 2009; the Electronic Commerce (Provision of Legal Recognition) Bill 2008 and Electronic Fraud (Prohibition) Bill 2008.[27] In fact, Nigeria is yet to domesticate any of the international legal instruments on e-commerce,[28] particularly the UNCITRAL Model Law of 1996.
The ETB has been severally introduced before National Assembly from 1999 to date but it has been unable to be passed into law, from then until now.[29] The recent species of such Bill was the one that was packaged and passed by the National Assembly sometimes in 2015.[30] Unfortunately, the President could not assent the bill before he vacated office sometimes in May 2015 and as a result, the Bill died with the 7th Assembly.[31] There is currently no certainty as to whether the Bill has been introduced to the current assembly; the 8th Assembly, where it has to undergo the whole process of passing it into law, again.
This bill seeks to provide a legal and regulatory framework for conducting transactions using electronic or related media, the protection of the rights of consumers or parties and their personal data as well as the facilitation of electronic commerce in Nigeria.[32] An important benefit of this proposed bill is that it will reduce the cost of doing business by eliminating transportation and other logistics cost. The Bill provides for a number of activities carried out online which include but are not limited to;[33]
- Online contracts
- Electronic signature and records
- Admissibility of electronic evidence
- Security of Parties to an online transaction
The bill also proposes to offer full protections to contracts entered into via emails, and transactions conducted with online shops, electronic commerce and services platforms, which are currently not provided for in our laws.[34] It has been stated that the bill will foster innovative creativity and open up new areas of investment opportunity for our young population and start-ups that have suffered a lack of support from creditors and investors due to the absence of this law.
Remarkable strides at the regulation of e-commerce in Nigeria are still at the stage of draft Bills before the legislative houses. All these bills, if passed into law would promote a safe and secure environment or electronic commerce to grow.
Prior to the digital age, as it is now, the government had established the Consumer Protection Council, by virtue of the Consumer Protection Act,[35] hereinafter referred to as CPA. The CPC is empowered to hear consumer complaints with respect to trading activities and grant them redress, where necessary.[36] The Act however, has not been amended since 1992 before the digital age began, and as such, its protection has not been made to extend to transactions concluded online. Doing this, in spite of the absence of a clear legislation protecting electronic consumers will give the legal recognition required to electronic transactions and go a long way to assuring consumers of their security in these transactions.
Issues Arising in Electronic Transactions
E-commerce covers a wide range of transactions effected via mobile telephones and other devices such as personal computers and tablets, and purchases are often made by using applications and platforms.[37]
An increasing number of consumers have access to the Internet and engage in e-commerce, which provides easier and faster access to products and services (hereafter referred to as products). It also presents some challenges for consumers that differ from those encountered during offline commercial transactions. These challenges are somewhat inevitable, considering the boundless nature of the internet and internet technologies, coupled with the current legal and technical state of Nigeria with respect to e-commerce.
One of the major challenges which consumers face in the course of electronic transactions is fraud. Online and mobile payment systems present challenges for consumers. Consumers incur security risks when providing payments online.[38] Consumers may be more at risk when making purchases online because some delicate information may be required from the consumers which can easily get in the wrong hands. The use of credit and debit cards during purchases made via the Internet has led to an increase in the frequency with which personal information about consumers is collected and traded by third parties.[39]
Consumer data can be accessible to unauthorized third parties without the knowledge and consent of the consumer. During the course of the transaction, the consumer provides certain financial details like his or her pin and CCV, amongst others, enabling a third party mostly hackers to make use of these details to rid these consumers of their money. Some of these challenges may arise from poorly developed Internet networks.
For example, in Germany, 13 per cent of consumers have been affected by unjustified invoices for the services of third-party providers.[40] A relatable and recent example was the hack that took place late last year with the transportation company ‘BOLT’ formerly known as ‘Taxify’. The company was hacked by fraudsters and regular users of their services were at the receiving end of this unfortunate incident. Thousands of naira were illegally taken out of customers’ accounts with no remedy or compensation whatsoever.
This challenge all boils down to lack of appropriate data security and privacy protection in Nigeria. The key question remains whether there are adequate legislations or legal frameworks to protect the Nigerian consumers in the use of the internet for electronic transactions, in event of loss.
With the current growth of fraud and dishonest practices in electronic transactions, the buyers are not the only parties who face challenges in these transactions. On the part of the sellers, they may face a loss of goodwill. Every consumer demands instant and excellent shopping experiences and for many brands, if these expectations aren’t met, it can have major impacts on trust, loyalty and long-term growth of the brand.[41] In a situation where a consumer has an awful experience due to the unsecure site of the seller or service provider, it affects the business of the seller immensely, as the consumer no longer wants to transact with that provider and like the saying goes ‘bad reviews spread like wild fire’, so it is safe to say that one key component for successfully keeping customers happy is providing them a secure experience while they interact with a brand’s site.[42] The consumer may admit that they feel responsible for making sure their payments are secure, but when fraud event occurs, they blame the brand first.[43]
On the part of both the buyers and the sellers, there is the challenge that comes with seeking redress. The growth of e-commerce and the use of e commerce, despite the numerous advantages, has been accompanied by legal issues and peculiarities. In online transactions the consumer is the party that is most at risk if a transaction goes south; this is because in some online transactions, the consumer may not know, or have any access to the seller beyond his e-commerce medium, and there’s the potential for the seller to either wrongly advertise the product, or for the whole transaction to be an outright scam.[44]
The laws of a nation should be placed in a position to protect the oblivious buyer at every stage of the transaction, as the anonymity of the parties to an online transaction puts the buyer more at risk. Most developing countries are yet to put in place the adequate regulatory framework with which to ensure the smooth running of the system, adequate protection of businesses and consumers, and to prescribe for crimes and punishment for cybercrimes in relation to e-commerce. Nigeria, as a developing nation, is particularly susceptible to these negative elements of e-commerce because of the lack of adequate regulation, and the general underdevelopment of the ICT sector. The presence of adequate legislations and opportunities for consumers to seek redress based on electronic transactions, like they can in actual transactions will go a long way in encouraging more people to be involved in e-commerce, thus, spurring economic growth.
Conclusion and Recommendations
E-Commerce in Nigeria has opened the gates for globalization and caused Nigeria to be more involved in the use of the internet. However, we cannot expect to reap the benefits of e-commerce like the more developed countries, which have put in place, legal regulations protecting their citizens in the use of the internet. For Nigeria to completely enjoy the benefits of the internet and electronic commerce, the government has to put more frameworks in place to protect its citizens from the risks associated in transacting online.
However, if the government cannot grant absolute protection, then, there should be a standard means of seeking redress, in the event of fraud or negative outcomes from the transaction. Therefore, there is need for the government to assure Nigerians of the reliability and legality of transacting on the internet and the first step in doing this is the provision of an adequate legislation that provides for electronic commerce. Where there are adequate legislative enactments put in place with respect to electronic transactions, the confidence of the public in engaging in such transactions will become strengthened.
For the purpose of protecting the sellers and service providers that transact online, the government should create a means to identify legitimate providers of goods and services under a particular name, like the Amazon Brand Registry Scheme. This scheme requires sellers of a particular brand under the Amazon online store, to be registered as well as their products; it aims at securing the sellers and their products and avoiding unscrupulous acts of selling fake products under a particular brand name.
Apart from the duty on the part of the government as an institution for law-making, these brands also need to create safe and secure domain names that will assure their respective consumers that their financial and personal details are kept private from third parties. This would increase sales opportunities which would in turn, develop the economy. If the government and the sellers carry out their duty to electronic consumers, it will ensure an enabling legal environment on principal and ancillary issues surrounding electronic commerce or transactions.
About the Author(s)
Akinro Angel Bukola is a Law Student, Afe Babalola University, Ado-Ekiti; Email: [email protected]
Badru Oluwakanyinsola Zeenah is a Law Student, Afe Babalola University, Ado-Ekiti; ACArb Email: [email protected]
References
[1] D.U. Aku and C.S. Igwe, ‘Electronic Commerce Development for the New Economy in Nigeria: Challenges and Prospect’ (2018) 5(19) International Journal of Research 312-323 <https://edupediapublications.org/journals> accessed 7 January 2020.
[2] Ibid.
[3] K.G. Akintola and R.O. Akinyede, and C.O. Agbonifo, ‘Appraising Nigeria Readiness for E-Commerce towards Achieving Vision 20:20’ (2011) 9(11) International Journal of Research and Reviews in Applied Sciences, 330–340.
[4] D.U. Aku and C.S. Igwe (n 3).
[5] Ibid.
[6] C. Kabango and A.R. Asa, ‘Factors Influencing E-Commerce Development: Implications for the Developing Countries’ (2015) 1(1) International Journal of Innovation and Economic Development, 59-66.
[7]T. Jih-Hsin and H. Min-Chu and H. Ting-Yuan, ‘A General Domain Name Appraisal Model’ (2014) Journal of Internet Technology, 3.
[8]C. Abuda ‘Internet Domain Names and the Interaction with Intellectual Property’ (2010) (26) Computer and Security Review, 38.
[9]A.O. Ajetunmobi, Information and Communications Technology in Nigeria (Princeton & Associates Publishing Co. Ltd, 2017) 131.
[10]I. Lee, ‘A Study on Factors Influencing the Value of the Domain Name’ (2005) <http://www.kmis.or.kr/EventsGuide/kmis_2005 _fall_out.htm> accessed 1 February 2020.
[11]Z.G. Wu and G.H. Zhu et al ‘Domain Name Valuation Model Based on Semantic Theory and Content Analysis’ (2009) (2) Asia-Pacific Conference on Information Processing, Shenzhen, 238.
[12]A. Jolly and J. Phlipott, A Handbook of Intellectual Property Management (The Patent Office, 2018) 74.
[13]The Domain Name System Past Present and Future.
[14] Micheal Gargiulo, Naming your Business: Are Domain Names Extensions Importnt’[2018] <www.forbes.com.sites/forbestechcouncil/2018/10/22/naming-your-business-are-domain-name-extensions-important/amp/> accessed 27 February 2020
[15]Organisation for Economic Corporation and Development (OECD), Report on Electronic Commerce: Opportunities and Challenges for Government (1997) 20.
[16]<http://stats.oecd.org/glossary/ detail.asp?ID=4721> accessed 5 February 2020.
[17]A.O. Ajetunmobi (n 11) 114.
[18]Ibid.
[19] K.G. Akintola (n 3).
[20]T. Orimobi, ‘The Growth of E-Commerce in Nigeria: A Brief Overview’ <https://tolegalgroup.com/the-growthof-e-commerce-in-nigeria-a-brief-overview/> accessed 4 February 2020.
[21]T. Ibidapo-Obe, ‘Online Consumer Protection in E-Commerce Transactions in Nigeria’ Research gate <https://www.researchgate.net/publication/314459028> accessed 3 February 2020.
[22]M. Nuruddeen and Y.B. Yusof and N.A. Abdulla, ‘Critical Analysis of the Legal and Infrastructural Frameworks for E-Commerce and Consumer Protection in Nigeria’ (2017) 5(4) The International Journal of Business and Management 58-62, 59.
[23]Malaysia Consumer Protection Act 1999, s 2(g) specifically excluded the protection for e-consumers. The first step towards the protection of e-consumers in Malaysia was taken in 2007, when the CPA was amended to cover transactions which are conducted through electronic means.
[24]C.K. Ayo and J.O. Adewoye and A.A. Oni, ‘Business-to-consumer E-Commerce in Nigeria: Prospects and Challenges’ (2007) 5(13) African Journal of Business Management 5109-5117.
[25] ALL AFRICA. ‘Creating a Legal Framework for Electronic Transactions to Protect Nigerians’ [2019] <https://allafrica.com/stories/201906130322.html> accessed 5 February 2020.
[26]S.A. Aliyuand O.A. Francis, ‘Analysis of Electronic Transactions Bill in Nigeria: Issues and Prospects’ (2014) 5(2) Mediterranean Journal of Social Sciences216-220.
[27]M. Nuruddeenet al (n 21); U. Nnamdi, ‘Legislating Stricter Standards for Electronic Banking in Nigeria’ (2016) Publication of Dispute Resolution Group at Advocaat Law Practice, 4.
[28]M. Nuruddeen, ‘Analysis of the Legal Framework for the Operations of E-Commerce: A Nigerian Perspective’ (2014) 6 & 7 Ahmadu Bello University Zaria Journal of Private and Comparative Law, 255– 286.
[29]B. Udotai, The Growth and Challenges of Information Technology in Law Practice in Nigeria, in Legal Practice Skills and Ethics in Nigeria, K.N. Nwosu (Lagos: DConsulting 2004) 229–261, 233.
[30]O. Aniaka, ‘Analyzing the Adequacy of Electronic Transactions Bill 2015 in Facilitating E-Commerce in Nigeria’, (2015) Canadian Institute of Health Research, 1–7.
[31]M. Nuruddeen (n 27).
[32]ETB 2015, s 1 & 2.
[33]Ibid.
[34]E. Ikeh, ‘Towards A Legal Framework For The Development Of E-Commerce In Nigeria: Issues & Prospects’ (2014) <https://www.mondaq.com/Nigeria/CorporateCommercial-Law/294344/Towards-A-Legal-Framework-For-The-Development-Of-E-Commerce-In-Nigeria-Issues-Prospects> accessed 5 February 2020.
[35]Cap 25 LFN 2004.
[36]CPA 2004, s 2(a) & (d).
[37] UNCTAD, 2015, Information Economy Report 2015: Unlocking the Potential of E-commerce for Developing Countries (United Nations publication, Sales No. E.15.II.D.1, New York and Geneva).
[38]ICPEN, Common statement: Consumer protection in mobile payments (2013) <https://www.icpen.org/for-consumerexperts/library?downloads=1&keywords=mobile+payments&cat%5B2%5D=0&cat%5B1%5D=0&ca t%5B210%5D=0&cat%5B3%5D=0&cat%5B4%5D=0&cat%5B32%5D=0&cat%5B302%5D=> accessed 5 February 2020.
[39]Ibid.
[40]Contribution from the Government of Germany.
[41] K. Lee ‘E–Commerce Retailers Face Long-Term Challenges as Payment Fraud Damages Customer Trust’ (2019) <https://www.mytotalretail.com/article/e-commerce-retailers-face-long-term-challenges-as-payment-fraud-damages-customer-trust/> accessed 5 February 2020.
[42]Ibid.
[43] Contribution from Consumers International; see also <http://www.consumersinternational.org/newsand-media/resource-zone/state-of-consumer-protection> accessed 3 February 2020.
[44]T. Ibidapo-Obe (n 21).
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