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Personal Finance

Exploring online commerce legal environment in Kenya

The usage of e-commerce since the outbreak of Covid-19 in mid-March has increased.
The usage of e-commerce since the outbreak of Covid-19 in mid-March has increased. FILE PHOTO | NMG 

The usage of e-commerce since the outbreak of Covid-19 in mid-March has increased. A lot of transactions and operations were digitised to provide for maximum physical distancing.

There has also been an increased demand for web-based business solutions, online payment and virtual meetings. A large number of businesses have to embrace e-commerce.

Post-Covid legal services in Kenya, for example, have gone digital. Many corporate transactions, whether it was the registration of new businesses, tax filings, land registrations and others were done digitally even before the outbreak of Covid-19.

The pandemic enhanced digitisation in the legal sector. Access to justice through courts is now a digital affair.

This begins from the filing of cases, payment of court filing fees and conduct of the proceedings. Digital operations will be the new normal. While the digitisation of legal services has a positive effect in terms of saving time, it has had the negative impact of causing job losses for some in the legal sector.

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Clerks and other paralegals risk job cuts as the need for physical presence at the court registries is minimal.

To be a competitive paralegal, one must possess information technology skills and diversify to offer their service as a support service to law firms.

A laid-off paralegal can consider offering e-filing support services to several law firms. At a one-off fee, you would provide e-filing support services to several law firms. There is a high demand for that.

This is just a synopsis of the legal sector. However, all sectors will also be affected. It is, therefore, important to know the legal landscape for e-commerce in Kenya. For starters, there is no standalone legislation on e-commerce. The laws and regulations are contained in several legislations unlike in countries like the United Kingdom, where the law stands alone.

The standalone legislation enhances consumer protection and e-commerce.

In the UK regulation of e-commerce, for example, websites are all regulated.

They are required to provide the name, physical address, e-mails, business registration numbers and value-added tax numbers on the website. They must display the prices of goods and services.

All of these requirements protect consumers. The same provisions provide for online contracts in a very detailed manner.

Under the UK e-commerce law, it is possible to sue against illegal transactions. In the case of L’Oreal versus eBay, the former sued eBay for selling their products on their online platform without L’Oreal’s consent.

The lack of standalone legislation in Kenya exposes the consumer to a lot of risks like fraud, especially, where the identity of the purported sellers, their contacts and details are not known.

There are some developments, however, in the e-commerce sector in Kenya, which are commendable.

One is that it is easier to enter into electronic contracts in Kenya with the recognition of electronic signatures. The law now recognises digital agreements. However, use a recognised provider for the ICT and evidence laws to allow the digital signature.

Profits made from digital businesses shall now be subject to a tax soon. It is an important development for those in e-commerce.

However, compliance in matters of digital tax may be difficult due to a lack of standalone e-commerce law. Such a law would not only enhance consumer welfare but also support taxation.

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