TRANSBORDER DATA FLOWS

Summary

The Government of Ecuador has formulated consumer protection legislation in anticipation of transborder e-commerce. In addition, the Government has established special departments and offices for consumer protection, consumer education, information and complaints handling. An informal communications network exists among the organizations of the region dedicated to consumer protection and encourages the creation, development and use of national and international data banks. Electronic trade is in its infancy in Ecuador and it is yet unclear what transborder data flow problems and concerns will emerge as connectivity and access spreads across the country (Source: UN).

Surveillance and Development

According to information theorist Frank Webster, it is a sociological truism that “to organize life, information must be systematically gathered on people and their activities [surveillance].”  One of the key benefits of IT is its ability to gather and store massive amounts of information: what people buy, when and where; how much energy they require; how many people inhabit a given area; what tastes, spending habits, and lifestyles people of different areas enjoy, etc. The Andean Community has developed national and international data banks in order to gather all types of information on their nation’s citizenry in the hopes of facilitating increased organization and development. As IT use spreads, consumer protections are needed to guard the citizenry from information misuse. Transborder data flows may increase the chances that information can be used for unintended purposes. Therefore, Ecuador must encourage binding and enforceable transborder data flow agreements.

Agreements

Until recently, the issue of consumer protection related to transborder data flow and the Internet had not been a major concern of the Ecuadorian government. The lack of Internet accessibility and inability to conduct transactions via the Web have made the issue of consumer privacy a ‘less than visible issue.’ However, the government has played an active role in joining with its Latin American neighbors in forming coalitions to address the issues of consumer rights/protection and privacy.

A report commissioned by the United Nations Secretary-General shows that its directives, creation of consumer protection legislation---to be implemented by the year-1995, was actively implemented by the government of Ecuador. In addition, the Consumers International organization developed a model law on consumer protection, based on the United Nations directives and the legal and cultural environment of its Latin American and Caribbean members. The model law, which is a dossier of existing laws and regulations in the region, has been used as a guide by a number of countries in their consideration of new legislation (Source: UN).

Ecuador, using the model law as a starting point, has advanced to ratifying:

• ICSID Convention: Convention on the Settlement of Investment Disputes between States and Nationals of Other States;

•  New York Convention: Convention on the Recognition and Enforcement of Foreign Arbitral Awards.

Both conventions act in facilitating information flow in business relationships under the Free Trade of the Americas (FTAA). In accordance with these conventions, Ecuador has agreed to create and implement legislation that will address the following issues:

• Protection of privacy with regard to the processing of personal data and transborder data flows on global information networks while permitting the unrestricted flow of information, and facilitate cooperative approaches to privacy protection among governments, consumers, and business;

• Recognition of electronic records and signatures based on the relevant directives contained in the model law on electronic commerce commissioned by the United Nations Commission on International Trade Law (UNCITRAL);

• Guarantee that private methodologies for authenticating transactions are acknowledged and enforced;

Ecuador’s membership in the ICC, International Chamber of Commerce, Andean Community and ALADI, has facilitated its development in achieving strong consumer privacy and Internet legislation. A Global Action Plan for Electronic Commerce, Second edition---October 1999, commissioned by a global cooperative consisting of the OECD, Business and industry Advisory Committee; INTUG; ICC, International Chamber of Commerce; AGB, Alliance for Global Business; GIIC, Forum for Global Information Infrastructure; and WITSA, established a guiding framework, in which, participating governments use to create E-commerce legislation. Target areas of interest consist of protection of personal information, Internet privacy, consumer rights, business ethics, encryption technology and public accessibility to domain information (Source: USCIB).

Internet Adult Sites

Ecuador prohibits or restricts access to Internet pornography through Internet filtering software. We could not uncover how this is done technically.

Conclusion

As stated above, Ecuador has made strides in acknowledging the need for consumer privacy and Internet privacy legislation. However, social, economic/infrastructure and cultural issues remain as obstacles to full utilization of the Internet and its capabilities. Advancements in infrastructure support and on-line transaction capabilities are necessary before additional steps need/can be taken in addressing the issues of privacy and transborder data flow.

This report was completed in December 2000 for the class Impacts of National Information Technology Environments on Business given by Professor Erran Carmel in the program of Management of Global Information Technology at the Kogod School of Business in Washington DC