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E-Commerce in Mexico

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published on 9 March 2022 | reading time approx. 3 minutes

 

Commercial activity represents one of the essential elements in the economic development of every country, and therefore, as new forms of commercial acts are created, the need to regulate such activity arises.

 

 


Introduction

Commercial activity represents one of the essential elements in the economic development of every country, and therefore, as new forms of commercial acts are created, the need to regulate such activity arises. 

In this sense, one of the events that would mark a new scenario in the commercial activity, not only in Mexico but in the whole world, would be the incorporation of electronic media, especially the Internet.

Therefore, the rise of e-commerce in Mexico was established in 1993 with the creation of "com.mx", encouraging companies to use the Internet for commercial transactions, whose main characteristics of e-commerce are the use of technology, the evolution of technological devices and the applications, which have favored the transformation and continuous improvement of the e-commerce system. 
Consequently, through the creation of the Model Law on Electronic Contracting by the United Nations Commission on International Trade Law, the regulation of this matter began. Thus in 2003 specific rules were set forth in order to meet the new way of doing business, that means the commerce carried out through the Internet. 

Due to the above mentioned reasons, the Organization for Economic Cooperation and Development (OECD) defines e-commerce as the process of buying, selling or exchanging goods, services and information through communication networks.

Evolution of e-commerce in Mexico

The evolution of e-commerce in Mexico has increased step by step, the amounts spent through this medium are increasing year by year, which demonstrates the importance of keeping up to date and having payment options through the Internet.

With the growth and increased use of Information and Communication Technologies (ICT) e-commerce has been encouraged and has changed the way we trade and contract, as the introduction of electronic media has led to a shift towards new ways of doing business, changing the environment in which transactions are conducted, the methods of making them secure and formalizing the actors involved in the exchange.

In Mexico, incentives are offered to encourage companies to become more interested in e-commerce, one of them being the e-commerce awards, also known as the "E-commerce award", which recognizes the leading companies in e-commerce according to their business.

Since 2000, the Mexican government has been focusing on integrating the use of ICTs into the economy, with the aim of increasing their use and fostering innovation. The incorporation of the principles set out in the new Model Law on e- Commerce took place in the same year.

On 30 September 2019, the Bank of Mexico's (Banxico) initiative on digital collections (CoDi), which aims to facilitate electronic transactions through mobile phone applications, came into force as a new way to pay and collect payments without the use of cash.

Regulation of e-commerce in Mexico

E-commerce is a legal concept that presents a series of particularities and difficulties: the first of these is evident when defining it, differentiating it from traditional commerce, classifying it and inducing its characteristics. 

E-commerce in Mexico is regulated through a legal framework that allows consumers to have adequate protection in order to avoid fraud at the time of payment. This regulation was established in April 1998, by the Organization for Economic Cooperation and Development (OECD) through its OECD Consumer Policy Committee, recommending that governments, suppliers, consumers and their representatives adhere to guidelines for the formulation and implementation of self-regulatory schemes for consumer protection in e-commerce.

In June 2020, the digital tax, that has already been discussed by legislators in Mexico at the end of 2019 entered into effect. Digital platforms such as “Mercado Libre”, “Amazon”, “Airbnb”, “Uber”, among many other similar ones now have functions to withhold VAT and ISR to people, who generate income with these platforms.

The Mexican e-Commerce Standard: NMX-COE-001-SCFI-2018, provides that all businesses that offer and market products or services through electronic means, must adjust their systems or pages to comply with the regulation, so online stores must ensure the rights of consumers, seeking an equitable legal framework, with legal certainty.

Therefore, when online shops handle sensitive data in contact forms, they must adopt the provisions of the Law on the Protection of Personal Data Held by Private Parties, as they must display a simplified privacy notice on the website. Some important points to consider in such privacy notices are:
  • Identity data;
  • Purpose of the use of the data;
  • Rejection mechanism;
  • Place of consultation of the privacy notice.
In this sense, the objective of the standard is to ensure transparency through a legal framework, that directs online stores to indicate the responsibilities and data of all suppliers involved, whether direct or subcontracted. 

In addition to the establishment of the obligation to inform the consumers about conditions, characteristics and specifications of the goods, products or services offered, mechanisms to verify the operation (security and confidentiality of data) are available without neglecting the benefits of having an online shop. Some of them are:
  • No limitation through opening hours;
  • No geographical limitations;
  • Increased number of customers;
  • Simple and quick management;
  • Cost reduction. 

Conclusion

E-commerce is a new economic phenomenon of the 21st century and the digital economy, which impacts the global economy and is transforming the way, economic transactions are carried out.

At present there is practically no country outside this phenomenon, which is rapidly changing the form of economic exchange.

The importance that e-commerce has acquired today has been a great help for the society due to the impact it has had with the development of new technologies, creating new tools and opportunities for consumers to purchase products in a safer and more efficient way.

It is necessary to be aware of new situations that needs to be regulated, as unfortunately the law is always several steps behind technological advances. 

In terms of the most important legal aspects, the specifications are a fundamental document, as they establish the conditions for contracting a service or purchasing a product; this specific document determines the responsibilities of each party in the commercial transaction.
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