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05 Dec 2006 |
FROM THE ECONOMIST INTELLIGENCE UNIT
Greece was slow to join the Internet revolution; even today, the Greek Information Society Observatory (ISO) estimates that just 18% of individuals make regular use of the Internet. This is attributable both to the relatively low standard of living (compared with other EU countries) and to the high access fees. The state-owned Hellenic Telecommunications Organisation, which had a monopoly on landline telephony until January 1st 2001, has established a special Athens Internet Exchange (AIX) with Internet charges significantly lower than those for standard-rate calls.
But the packages provided by Internet service providers (ISP) were expensive until recently, and broadband tariffs are the steepest in the European Union. According to OECD data to June 2006, Greece has the lowest penetration of broadband among the organisation’s 30 members, with just 2.7 subscribers per 100 lines (296,800 connections), compared with an OECD average of 15.5 and a peak of 29.3 (Denmark). Retail broadband prices have been prohibitively high, though they have fallen off sharply in the past two years. For example, the rate for a 384 kbps, which stood at €74.90 a month in January 2004 had fallen to €23.40 by July 2006. During the same period, the price for a 512-kbps connection dropped from €117.93 per month to €29.80 and for a 1,024-kbps connection (the top speed now offered to retail customers in Greece) from €216.80 to €41.20. A government-subsidised programme to provide broadband access for students offers access at €10 per month for 512 kbps.
Greek legislation on e-commerce is still evolving. The European Commission issued a directive in June 2000 governing e-commerce (Directive 2000/31, Official Journal L, July 17th 2000) that was transposed into Greek law in May 2003, (Presidential Decree 131/03), nearly a year and a half after the deadline. The legislation generally supports the free movement of goods and services and the freedom of establishment for e-commerce ventures consistent with the rules of the internal market in tangible goods and services. There are also harmonised rules on the validity of electronic contracts, liability, online dispute settlement and transparency requirements. Member-states may impose restrictions on such services supplied from another country if they are deemed necessary to protect the public good.
E-commerce: Growth of e-commerce
Internet service providers (ISPs) began to appear in Greece in the early 1990s. The leading ISPs are the Hellenic Telecommunications Organisation’s OTEnet and the privately owned Forthnet. A third ISP, Hellas on Line, which was a pioneer in the market but then lost significant market share, looks poised to gain fresh ground following its sale to a subsidiary of Sistema (a Russian company) and its acquisition of a company with an extensive fibre-optic network in the Attica area. Several ISPs have established general-interest portals, and some offer vortals (vertical search engines) that cater to specialist groups such as doctors and lawyers. Most large media companies established portals during 2000 and 2001, offering news, sport coverage, weather, timetables, and magazine and music content. OTE signed an agreement in 2000 with Yahoo! (US) to provide a Greek version of that service to include mail, news, financial information, weather and messaging. However, many of the portals have closed because of a steep drop in advertising revenues.
All the major service providers offer web-hosting services. OTEnet has acquired the Greek marketing rights for Open Shop (small-electronic-shop software) of Interworld, of the US, and Intershop (larger-electronic-shop software), of Germany, which is represented in Greece by Intrasoft, a software house. Forthnet (which is partly owned by a ferry company) has established a reservations service that covers all forms of tourism and entertainment bookings.
Two e-business sites have been established, each involving consortia of banking, telephone, hardware and software companies. The first, Business Exchanges (majority owned by EFG Eurobank-Ergasias), uses software from Ariba and hardware from International Business Machines (IBM) for business-to-business (B2B) sales of products; Vodafone is a 30% stakeholder. The second, CosmoOne, has National and Alpha banks as major shareholders. It uses software from Commerce One and hardware from Compaq for B2B e-commerce. OTE and Cosmote together own 52% of CosmoOne, which has a wholesale bias and specialises in auctions for large public-sector companies such as OTE.
Purchases over the Internet tend to be limited to small items such as books and CDs or tickets. But even this is limited because, although it is possible to place orders over the Internet, for the most part, payment is still on delivery (with cash or credit card). The largest banks, National and Alpha, have formed a joint venture to market electronic-wallet technology to their customers and, on a wholesale basis, to other banks. The system has been developed under licence from Proton World of Belgium. The electronic wallets are designed to be charged at automatic teller machines and used at EFTPOS (electronic funds transfer points of sale). The system had been expected to be up and running by mid-2004 but was not yet functioning in October 2006. Physical delivery of electronically ordered goods also is a problem since the local postal service is unreliable. Banks and computer companies have been buying up courier companies with a view to improving these services. The European Commission together with the Athens Chamber of Commerce and Industry is running pilot schemes to develop electronic invoicing (Selis) and an alternative-dispute-resolution platform, which will let Internet merchants and customers settle differences online without dealing with the cumbersome and expensive courts.
According to the Information Society Observatory (ISO), just 20% of firms with more than ten employees have computer systems for processing sales or purchase orders, and most of these are larger companies with more than 50 employees, according to a September 2006 survey. Of these, just 16% performed sales via corporate or portal-hosted websites at the end of 2005. The sales are made through electronic data interchange (EDI) and account for some 5% of their turnover. About 500,000 people (5% of the population) place orders online on a frequent basis, a figure deemed by the ISO to constitute “critical mass”. Of the enterprises making electronic sales, 32% also made electronic payments but none issued electronic invoices; 12% made electronic purchases. The majority of those with sale-and-purchase systems had these systems also linked to their back-office functions, including stock monitoring, replacement orders, internal sales invoicing, production, distribution and transport.
All the major banks offer Internet banking services; they claim that these services cost them just 20% of traditional counter services; however, according to a survey conducted by the ISO in September 2006, the percentage of individuals using online banking services was just 2.3%; the percentage of users making banking transactions via the web was just 12.9%.
Real-time share quotations are available online, and buy/sell orders can be placed over the Internet with most stockbroking firms and banks. Although funds to cover the transactions can be transferred electronically from the trader’s bank to the dealer’s bank, there must be a prior contract—signed manually—authorising such transactions. Larger insurance companies allow customers to book policies over the Internet, but again these must be concluded in person. Most newspapers, including business papers, are available online; however, there is usually a half-day delay to allow for distribution and sale of the printed version.
The Athens Chamber of Commerce and Industry operates Business Net, a directory of all of its members and their activities, which can be accessed through its website (www.acci.gr). It also provides links to the European Business Register and the World Chambers Network. The chamber hosts the EDIRA Registry, the electronic-data interchange registry, under a memorandum of understanding with the European Commission. It forms part of the EDIRA network. This service, which provides the registrant with a unique 21-digit identity code that is recognisable at a global level, is in operation. However, the electronic directory that allows matching of the identity code to details about a company was not yet ready in October 2006, nor is the system of certified “public keys” with which to access the “secret keys” of digital signatures. The chamber also maintains a database on business opportunities in the Balkans (http://pixis.acci.gr). It has developed a pilot scheme known as CB-Business providing information about counterpart countries for firms seeking to get involved in crossborder trade. The chamber is one of the registered providers of certification services for digital signatures in Greece.
The web is increasingly used for transactions with public services, including searching information, obtaining official forms and submitting completed forms.
Under the third Community Support Framework (CSF III), the government was to spend €2.8bn on an Operational Programme “Information Society” (OPIS), of which €1.7bn was to come from the European Union, on programmes to expand the use of digital technologies. But there were repeated delays in drafting and tendering projects, and once they were tendered, there were prolonged challenges by underbidders in the courts. Various disputes are also delaying major projects to upgrade hospital records and procurements systems, the Post Office, the Land Registry and the Manpower Employment Agency. EU funds must be drawn, spent and accounted for within two years of a contract that is concluded by December 31st 2006. Contracts can be signed until that date plus the two years disbursement period. In January 2006, the Greek government embarked on a crash programme to increase absorption in order not to lose outstanding funds.
For CSF IV (2007–13), the government has earmarked €2bn for an operational programme entitled Digital Convergence.
E-commerce: Foreign investment
There are no limitations on foreign investment in the telecoms and ISP sectors, though foreign firms that have invested in Greek e-commerce have done so with Greek partners.
Virtually all e-commerce applications are based on foreign software adapted to Greek-language needs. Adacom, a local e-commerce company, represents Verisign (US) in Greece for client authentication, digital signatures, encryption and secure e-mail. Amperion (US), which specialises in equipment that enables voice and data communications over medium-voltage electricity grids, has teamed up with Tellas, the alternative fixed-wire carrier created by the Public Power Corporation and Wind of Italy.
E-commerce: Intellectual property
Copyright. The European Union has signed two treaties drafted by the World Intellectual Property Organisation (WIPO): the WIPO Copyright Treaty (WCT) and the WIPO Performances and Phonograms Treaty (WPPT). These treaties are on the protection of copyright in materials published on the Internet. Greece has ratified both treaties (Laws 3183/2003 and 3184/2003, respectively). The measures will enter into force once all EU member-states have ratified them.
EU Directive 2001/29 covers Internet copyright. It seeks to strike a balance between the rights of artists and copyright-based industries and the needs of network operators, educators and general consumers. Member-states are allowed to apply specific exceptions to restrictions on copying if these are coupled with fair-compensation arrangements for copyright holders. For example, teachers and libraries will be able to make copies of material for education and research purposes when agreed by the copyright holders. Internet service providers will be able to make “technical copies” against appropriate fees.
Greek copyright law used to provide for a 2% levy on the sale of all information-technology equipment and software to cover copyright payments to artists whose work is digitally distributed. This proved impossible to enforce, however, and has been replaced with legislation (Law 3049/02) bringing Greece into line with EU directives providing for levies on digital equipment capable of mass reproduction.
Trademarks. All existing Greek and EU trademarks can be found online on the website of the Secretariat of Trade and Commerce of the Ministry of Development (www.gge.gr). A potential registrant can select the categories of interest and check whether a trademark is already taken. One of the projects under the Operational Programme for the Information Society is to allow electronic registration of trademarks, but this had not yet been completed in late 2006. Trademark law applies to the content of websites. Internationally recognised trademarks qualify for protection. Holders of Greek or European trademarks have been able since 2001 to register their domain name under the top-level domain “.gr” and under sub-domains such as “com.gr” and “org.gr” without the need for a separate trademark for each registration. Domain names are granted on a first-come-first-served basis.
The National Telecommunications and Postal Committee (EETT) is responsible for maintaining the national registry of “.gr” domain names (Law 2867/2000). It also has the exclusive right to issue second-level domain names (of which there are five: “com.gr”, “edu.gr” “net.gr” “org.gr” and “gov.gr”) and third-level domain names. According to the latest figures available, there were 87,324 .gr domain names at the end of 2004—and 32,871 of them were registered in that year alone. Registration is through any one of 274 ISPs that act as registrars. A list is available on www.eett.gr.
Regulations allow for the registration of any generic second-level domain name except those that are geographical (these can be registered only by local authorities), of national importance or offensive to public morals. Since July 2005, it has been possible to register a domain name containing Greek characters. EU nationals may register Greek domains, but they must have a Greek tax-registration number if they have business activity in Greece. It costs €44 plus value-added tax (VAT), which is now 19%, to register a domain name. It must be renewed every two years, at a cost of €29.30 plus VAT.
The use of domain names is covered by trademark legislation, competition law preventing “misleading” advertising and by civil-code provisions on the right of the natural or legal person to use and protect its name. There are no restrictions on the number of domain names that can be registered by companies, professionals or individuals but the EETT regularly reviews its registry and house-cleans those that are not being used in order to prevent “cyber-squatting”. In 2004 it delisted some 20,000 domain names that were not being used.
E-commerce: Consumer protection
The European Commission and the US Department of Commerce reached a preliminary agreement in June 2000 to permit the exchange of data to promote e-commerce. EU privacy law had previously prohibited the transmission of names, addresses and other personal information on EU citizens to any country that failed to provide data protection comparable to that provided in EU law. The United States does not have such a statute. The agreement provided that US companies willing to demonstrate they could provide such safeguards would qualify as “safe harbours”. EU citizens would still have the right to say no to companies that want to share their data, and they must be given “reasonable” access to data held about them. The companies must also agree to allow third parties to resolve complaints.
E-commerce: Contract law and dispute resolution
The EU’s directive on electronic signatures (1999/93) was transposed into Greek law by Presidential Decree (PD) 150/01 and its e-commerce directive (2000/31) by PD 131/03. The National Telecommunications and Postal Committee (EETT) is responsible for control and supervision of certification-service providers for electronic signatures, for the designation and supervision of private- or public-sector bodies for the accreditation of certification providers and for monitoring compliance with secure signature-creation devices. It keeps the registry of Certification-Service Providers (CSPs) and of Designated Bodies (DBs), which audit compliance of products and providers (EETT Decision 248/71).
As a pilot scheme, the EETT has permitted the use of electronic signatures in the submission of applications for domain names and carrier pre-selection by telephony subscribers. It has also set up and operates a private certification authority for the issue and use of digital certificates for the internal correspondence of its staff. But although conclusion of online contracts is legally possible in theory, the system has yet to become fully operational.
The essence of the e-commerce legislation is that there should be no legal requirement in the contract process that creates obstacles for the use of electronic contracts or deprives them of their legal effectiveness. There may be exceptions for contracts that create or transfer rights in real property (except for rental rights); that require by law the involvement of courts, public authorities or professions exercising public authority; that grant suretyship or collateral rights; or that are governed by family law or the law of succession.
The essence of the electronic-signatures legislation is that there should be legal protection and redress for online transactions. Service providers are not required to obtain a licence, though they must register with the EETT, and those that are resident in Greece are liable under Greek law. Transmitters of data have no liability, whereas storers of data have limited liability. The decree does not deal with the taxation of transactions and does not cover transactions involving public law entities, notarial business, representation of clients in court, games of chance with financial transactions involved or the protection of personal data. (The texts of the original EU directives are available on http://europa.eu.int.)
E-commerce: Basis of taxation
Single-market rules apply for goods traded within the European Union. For consignments by a distant seller, value-added tax (VAT) is charged in the country of origin on tangible goods worth up to €35,000, and Greek VAT is charged on goods valued above this threshold. The importer must prove that VAT has been paid when completing the administrative procedures for the transfer of funds abroad that are required by the Bank of Greece. For goods purchased from third countries, the common external tariff applies. For small items sent by post (such as books, CDs or lightweight clothing) that are not customs cleared, the buyer bears whatever tax (if any) the seller charges. The tax is generally considered to be cheaper than the local importers and retailers’ mark-up.
In July 2003 the EU began to levy VAT on digital goods and services downloaded (that is, imported) by European consumers. Providers have two options. The first is to determine the customer’s location, calculate the tax that applies in that country and remit the tax to the proper authorities. The second is to establish a physical presence in an EU country and charge all EU customers the tax associated with that country. The second option has benefits because companies can set up operations in low tax countries like Luxembourg (where the rate is 15%) and apply it throughout the EU (the rate is 19% in Greece and 25% in Sweden).
The EU e-commerce directive (2000/31) did not establish further rules on fiscal obligations, though these may be drawn up in future. It also leaves the way open to seek harmonisation of rules that might be negotiated through the World Trade Organisation, the Organisation for Economic Co-operation and Development, and the United Nations Commission on International Trade Law.
E-commerce: Classification of e-commerce transactions
Price and product lists constitute information and advertising up to the point where the consumer contracts a purchase. Enforceability remains an issue in Greece until electronic contracts become binding.
E-commerce: Compliance and enforcement issues
In accordance with EU Directive 2000/31, national contractual law applies. Governments must ensure that interim measures, such as injunctions, are available to terminate any alleged infringement of law and to prevent any further impairment of the interests of those involved in a dispute. For criminal proceedings, national law applies.
The updated Brussels Convention Regulation 44/2001 may be a first step to harmonise legal protection in Europe in e-commerce matters. But arbitration and alternative dispute resolution is still excluded.
E-commerce: Key contacts
SOURCE: COUNTRY COMMERCE
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