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“E-commerce is a powerful means to connect the unconnected to global trade” Arancha Gonzalez
Electronic commerce (e-commerce) is the process of buying and selling tangible products and services online[1] E-commerce relies on technology and digital platforms, including websites, mobile apps, and social media to make trade possible.[2] It is part of the greater industry known as electronic business (e-business), which involves all processes required to run a company online.[3]
E-commerce operates in different types of market segments. There are six major models for conducting e-commerce today namely:
Nigeria has made efforts to establish a legal framework for e-commerce, with several key regulations and initiatives in place:
Companies and Allied Matters Act 2020: This Act provides for the incorporation, registration, organization and management of corporate organizations, including online businesses.[12]
Electronic Transactions Act (ETA), 2023: The Electronic Transactions Act (ETA), 2023 is the most comprehensive and relevant law governing e-commerce activities in Nigeria. This Act provides the legal framework to facilitate and regulate electronic transactions, including electronic contracts, payments, and consumer protection measures.
Section 16(1) provides that “An electronic commerce business shall provide the consumer with clear and comprehensive information about the goods or services being offered, including the total cost.”[13]
Section 16(2) provides that “An electronic commerce business shall provide the consumer with a method to correct any input errors before the completion of the transaction businesses to provide consumers with a method to correct input errors before completing a transaction.”
Section 16(3) provides that “A consumer shall have the right to withdraw from an electronic transaction within a specified period without penalty, except for the cost of return of any goods.”
National Information Technology Development Agency Act (NITDA): Following the coming into force of the National Information Technology Development Agency Act, 2007 (NITDA Act) e-commerce regulations now fall under the scope of authority of the National Information Technology Development Agency (NITDA).
The NITDA Act established the NITDA as the regulatory body responsible for the development of the framework of rules for the governance and monitoring of the exchange of data and conduct of transactions online.[14]
Nigerian Communications Act, 2003: The Act established the Commission to regulate telecommunications services, including aspects related to e-commerce, such as online transactions and data protection. This act regulates electronic commerce, protects consumers, licenses e-commerce service providers, and establishes dispute resolution mechanisms.The Federal Competition and Consumer Protection Act (FCCPA): In 2018, the FCCPA established the Federal Competition and Consumer Protection Council to develop and promote fair, efficient, and competitive markets in the Nigerian economy and to also facilitate access by all citizens to safe products and secure the protection of rights for all consumers in Nigeria.[15]The Federal Competition and Consumer Protection Council is a Federal Agency under the Federal Ministry of Trade and Investment that is responsible for competition and consumer protection in Nigeria. It was set up to protect the rights of consumers
Section 73 of the Act provides that “A business shall not engage in any unfair practice that may deceive or mislead consumers.”
Consumer Protection Council (CPC) Act, 1992: The CPC Act establishes the Consumer Protection Council, which is tasked with protecting consumers from unfair trade practices, including those prevalent in e-commerce.
Section 3(a) of the Act provides that “The Council shall have power to conduct investigations into complaints, allegations, and situations regarding or touching on the quality of goods and services, misleading advertisement, unfair trade practices and other matters relevant to the protection of consumers”
Cybercrime (Prohibition, Prevention, etc.) Act, 2015: This legislation addresses cybercrimes and online fraud, providing measures to protect consumers from fraudulent activities on e-commerce platforms. The Act prohibits fraudulent online transactions, including those conducted through e-commerce platforms. Section 13 of the Act criminalizes obtaining unauthorized access to computer systems, networks, or electronic devices with the intent to commit fraud.[16]
Finance Act, 2020: Section 3 of the Finance Act 2020, titled “Amendment of Section 2 of the Principal Act,” introduces changes to the Value Added Tax Act by expanding the scope of taxable goods and services to include intangible products, assets, or property. Therefore, online vendors and businesses dealing with intangible products are required to account for VAT on their supplies in accordance with this provision of the Finance Act 2020.
Central Bank of Nigeria’s Regulation on Electronic Payments and Collections for Public and Private Sectors in Nigeria 2019:
The Central Bank of Nigeria (CBN) issued the “Regulation on Electronic Payments and Collections for Public and Private Sectors in Nigeria 2019” to provide guidelines and standards for electronic payments and collections across various sectors, including e-commerce. This regulation encompasses provisions that impact online businesses and e-commerce activities in Nigeria. Some key provisions related to online business and e-commerce include: [17]
Despite the growth of e-commerce in Nigeria, navigating the legal landscape presents various challenges for businesses operating in this sector. Some of these key legal challenges include:
Addressing these legal challenges requires proactive measures, including legal advice from experts, ongoing compliance monitoring, and continuous adaptation to evolving regulatory frameworks. By navigating these challenges effectively, e-commerce businesses can mitigate legal risks and thrive in Nigeria’s digital economy.
In conclusion, while e-commerce in Nigeria faces various challenges, including regulatory complexities and infrastructural limitations, the prospects for growth and development are significant. By addressing these challenges through collaboration between stakeholders and policymakers, Nigeria can harness the full potential of e-commerce to drive economic growth, create employment opportunities, and improve access to goods and services for its citizens.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
Read more: www.aarndalelaw.com
[1] Andrew Bloomenthal (29th March, 2024) “E-commerce Defined: Types, History, and Examples” INVESTOPEDIA https://www.investopedia.com/terms/e/ecommerce.asp Accessed on 12/04/2024
[2] Christiana Jolaoso (7th September, 2023) “What is E-commerce? Definition, Types& Getting started” FORBES https://www.forbes.com/advisor/business/what-is-ecommerce/ Accessed on 12/04/2024
[3] Darren Dematas (28th March, 2024) “What is E-commerce” ecommerceCEO https://www.ecommerceceo.com/learn/what-is-ecommerce/ Accessed on 12/04/2024
[4] BLOOMIDEA “Types of e-commerce” https://bloomidea.com/en/blog/types-e-commerce Accessed on 12/04/2024
[5] SEMRUSH TEAM “6 Types of E-commerce: Business Models, Marketing, and More” https://www.semrush.com/blog/types-of-ecommerce/ Accessed on 12/04/2024
[6] BLOOMIDEA “Types of e-commerce” https://bloomidea.com/en/blog/types-e-commerce Accessed on 12/04/2024
[7] https://www.semrush.com/blog/types-of-ecommerce/
[8] BLOOMIDEA “Types of e-commerce” https://bloomidea.com/en/blog/types-e-commerce Accessed on 12/04/2024
[9] Ibid.
[10] Oksana Yakovlieva (5th March, 2022) “Types Of Ecommerce Businesses: What Model Is Right For Your Online Business?” ELOGIC COMMERCE https://elogic.co/blog/types-of-ecommerce-businesses-what-model-is-right-for-your-online-business/#:~:text=B2A%20(business%2Dto%2Dadministration,they%20are%20secure%20for%20users. Accessed on 12/04/2024
[11] Ibid.
[12] Section 18 (Companies and Allied Matters Act) 2020
[13] Section 16 (Electronic Transactions Act) 2023
[14] Section 6 (National Information Technology Development Agency Act)
[15] https://starlionlegal.com/2020/10/23/legal-and-regulatory-framework-for-setting-up-an-e-commerce-business-in-nigeria/
[16] Finance Act,2020 (Amendment) https://firs.gov.ng/wp-content/uploads/2021/01/finance-act-2020_signed.pdf Accessed 18/04/2024
[17] CBN circular “REGULATION ON END-TO-END ELECTRONIC PAYMENT OF SALARIES, PENSIONS & OTHER REMITTANCES, SUPPLIERS AND REVENUE COLLECTIONS IN NIGERIA” https://www.cbn.gov.ng/out/2019/psmd/circular%20and%20guideline%20on%20e-payment.pdf Accessed 18/04/2024
[18] Omotola, S. (2020). “E-commerce regulation and consumer protection in Nigeria: A critical appraisal. Covenant Journal of Business & Social Sciences” (CJBSS), 11(1), 1-19.
[19] Ani, J. C., & Okpala, C. (2019). “E-commerce and intellectual property rights in Nigeria. International Journal of Computer Science and Information Security” (IJCSIS), 17(12), 103-110.
[20] Oyewo, B. M. (2018). “Legal issues in e-commerce: An analysis of Nigerian laws and practice. African Journal of Computing & ICT,” 11(1), 17-29.
[21] Ibid.
[22] Ibid.
[23] Ajiboye, T., & Onikoyi, I. (2018). “Legal and regulatory framework for e-commerce in Nigeria. Journal of Emerging Trends in Economics and Management Sciences” (JETEMS), 9(1), 1-8.
[24] Ibid.
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