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Companies are at risk from underestimating e-business regulations

Lisa Kelly
British companies could be underestimating the impact of e-business regulations on their organisation's competitiveness, according to IT experts.

A MORI survey of company leaders, commissioned by the CBI for its conference last week, looked at business attitudes towards regulation and red tape.

Some 95% said regulation increased over the past five years, 89% expect it to increase further over the next five years and 80% said this was damaging to their business.

However, out of the 256 chairmen, chief executives and other senior directors questioned across a range of UK companies, an overwhelming majority (72%) said the impact of e-business regulations on the competitiveness of their business is neutral.

"They are in cloud-cuckoo-land," said David Roberts, chief executive of Tif, the Corporate IT Forum.

Companies undertaking e-commerce face a range of legal obligations. They include data protection issues of e-commerce, Distance Selling Regulations and Electronic Commerce Regulations to avoid consumers being able to cancel their online contracts.

"The implications of legislation such as the Data Protection Act are obviously not clearly understood. Businesses are also obliged to store e-mail information which can be taken for the equivalent of a contract," said Roberts.

Colin Beveridge, IT industry expert, agreed: "I suspect that companies don't really understand e-business regulations," he said. "More and more European regulations are about how people trade on the Web. The survey results suggest that many businesses have made no attempt at compliance with regulations."

Mike Pullen, Internet lawyer at Dibb Lupton Alsop, said: "Companies have got a legal obligation to comply with these regulations. An awful lot are not complying, for example with distance selling regulations. If companies are playing by the rules it can affect their competitiveness as other companies take advantage by not obeying the rules."

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