Electronic commerce and digital services E-Book

Júlio César Parente Patrocínio

• Herausgeber: Editora Dialética
• Kategorie: Fachliteratur
• Sprache: Englisch

Seitenzahl: 549

Veröffentlichungsjahr: 2023

Beschreibung

THE DIGITAL ENVIRONMENT HAS NO BOUNDARIES. A new business model, product or technological service emerges all the time. Along with the facilitation and solutions brought by technological development, new problems, conflicts and litigation in social and economic relations also arise. Laws of several countries are not often able to keep up with the digital dynamism. Furthermore, there is not a consensus in international trade organisations on the concept of digital services and electronic commerce. That is the scenario in which the European Union has constantly developed rules to regulate the digital environment, ensuring and combining legal security and standardisation of rules with the practical advantages of these new social and trade relations, stimulating innovation and economic growth. While the WTO and the OECD have not reached a consensus on this matter, the EU has been influencing rules around the world and adding chapters on electronic commerce to its deep integration trade agreements with third countries. The book analyses EU regulations regarding the online environment such as personal data protection, electronic commerce, electronic contract, electronic signature and identification, advertising, digital services, consumer rights, and taxation. It addresses several decisions made by the Court of Justice and national courts of the EU. The influence of the EU in Mercosur is demonstrated through the analysis of laws and jurisprudence of Mercosur countries.

Leseprobe

ACKNOWLEDGEMENTS

I could not fail to thank those who helped and inspired me during the construction of this work.

Firstly, I thank my wife Juliana Alves Martins Parente, who has always supported and advised me, and I dedicate this book to our son Joaquim Martins Parente Patrocínio and Thor, our Golden Retriever, companion of writing early mornings.

I thank llo Aguiar Reginaldo Alexandre, my journalist friend in Portugal, who always provides me with information about the European Union and the global geopolitical and technological context.

I am also grateful to International Law professors Débora Barreto Santana de Andrade and Rosa Júlia Pla Coelho, who are sources of inspiration and knowledge. Professor Débora has an outstanding international academic career and Professor Rosa Júlia is a reference in European Community Law, European Union and Mercosur, having published works on the subject.

I would also like to thank my English teachers Gilvan Silva de Oliveira and Georgia Gardenia Brito Cavalcante Carvalho, who brought important knowledge not only of the English and Portuguese languages, but also provided guidance in terms of writing and modern study methods. The translation of this book had the help of Gilvan.

I also thank Professor Umberto Celli Júnior who, despite not knowing me, provided enlightening academic articles and valuable information.

Finally, I thank the internationalist lawyer Julian Henrique Dias Rodrigues for the mastery of his classes on International Law and for the pioneering spirit of creating and implementing the Instituto Brasileiro de Direito Estrangeiro e Comparado - IBDESC (Brazilian Institute of Foreign and Compared Law) and theAssociação Brasileira dos Advogados Internacionalistas - ABRINTER (Brazilian Association of Internationalist Lawyers).

PREFACE BY THE AUTHOR

The advancement of technology and electronic commerce presents domestic and international regulatory challenges. The digital economy has been growing rapidly, being conceptualized in the scope of the Organisation for Economic Co-operation and Development and the World Trade Organisation.

However, it is in the scope of the European Union that regulations have been advancing, modernising and consolidating both within the European community and in agreements outside it.

The European Union has a pioneering, deep and comprehensive regulation withregard to the protection of data on the internet, having regulated its internal taxation on electronic commerce, electronic contracts, electronic signatures, online advertising, internet intermediary services, among other topics.

In addition, it has a history and experience of deep regional integration agreements with third States. The electronic commerce is considered a cutting-edge topic and has been included in regional trade agreements carried out by the European Union.

It is in this context of regional agreements that, on 28 June 2019, the negotiation of the European Union-Mercosur Association Agreement was concluded. The subject of electronic commerce has been advancing in the Mercosur sphere, aiming to avoid loss of market and revenue, expanding commercial partners, and adapting to the agreement with the European Union. This guarantees the effectiveness and benefits of the agreement for both parties.

This book analyzes the rules and jurisprudence on electronic commerce, digital services and data protection; the prospects and challenges of the clauses related to electronic commerce in the European Union-Mercosur Agreement; and the need of adequacy and normative harmonisation in Brazil and Mercosur. To this end, it also addresses legal security and taxation in the digital economy, as well asprovisions established by international agreements and organisations on the matter.

Finally, it is worth mentioning that the Portuguese version of this book was originally published in August 2022, most of its content being concluded from late 2021 to early 2022.

PREFACE BY DÉBORA BARRETO SANTANA DE ANDRADE

Prefacing a work of such magnitude as this is to have your eyes lit up, notwithstanding being a great challenge. The creator and the creature are so inseparable that you cannot speak of the book without touching on the figure of its author, whose countless years of dedication and research on such a dense subject, even before its international affirmation, and the most varied publications and participations in national and international academic events already speak for themselves of such undeniable quality.

It should be emphasized, by the way, that the author, Júlio Patrocínio, since his university education, has shown a natural vocation: it is no coincidence that he has always had his entire tireless academic career focused on International Law, both as an academic researcher and as an international lawyer, which allows him to make more legitimate reflection and solid criticism about international legal issues.

Thus, surrounded by his deep knowledge in electronic commerce and international digital law, the area of his main activity, the author, self-determined in his work, bestows upon us a daring and, why not say, necessary work for legal science. He dives into the dense and obscure field of law and international relations to extract sobriety and coherence, broadening horizons as well. It embodies the noble role of being avant-garde in times of frenetic globalization.

This book, therefore, fruit of the author’s academic concerns and the result of his laborious research, was born within a context of proliferation of national and international rules related to electronic commerce and digital services, in the incessant search for harmonization and effectiveness within the international legal order, and aims to become a doctrinal guide in an area little explored by jurists.

To this end, it comprises three chapters that are very well linked and organized. First, the author presents a legal overview of electronic commerce and digital law in international organizations (WTO, UN, OECD) and in regional trade agreements (RTAs), then analyzing in depth the directives, regulations and case law of the European Union on the most diverse sectors of the digital environment: electronic commerce, electronic contracts, advertising, digital services, consumer rights and electronic signatures, also comparing the provisions of some of its integration agreements (EU-JAPAN, EU-CANADA, EU-COLOMBIA-PERU-ECUADOR, EU-MERCOSUR).

Right after finishing the arduous task of bringing an overview of the theme, the author breaks through the investigative and explanatory methodological field to focus all his efforts on the study of the EU-MERCOSUR agreement, addressing since its historical context to further aspects of the text of the international treaty on electronic commerce. Moreover, it identifies, in a precise manner, perspectives to be implemented and challenges to be overcome from the standpoint of MERCOSUR and its member countries, highlighting national legislation on commerce, electronic contracts and electronic signature of each of them.

Finally, as if all its fulfillment was not enough, the work reaches its apex when the author elaborates a comparative table between the clauses on electronic commerce contained in the regulations and directives of the European Union and those present in the EU-MERCOSUR Agreement, which will certainly serve as a source of primary consultation for both academics and professionals working in the area of international digital environment.

Hence, there is no doubt: this work is definitely daring and unique, and only fails for its indispensability to each and every Law enforcer.

To the author, my most sincere and happy compliments for the milestone work.

To the reader, my best wishes for deep reflections and excellent learning.

Débora Barreto Santana de Andrade

Professor of the Federal University of Ceará and of the University of Fortaleza

Lawyer and International Consultant

Doctor in Public Law by the Aix-Marseille Université

Master in International Law by the Aix-Marseille Université

PREFACE BY JULIAN HENRIQUE DIAS RODRIGUES

There are many paths that life presents to us in the course of our existence, perhaps infinite ones. The destinations are not always revealed. We need to risk our ways and rely on a little intuition to discover them.

Some of these paths demand an active attitude from us. Others simply open up as a natural or necessary stage in our lives.

One of these necessary paths opened up when, in 2020, I had the opportunity to meet the lawyer Júlio César Parante Patrocínio, the author of this work, in a group of students who attended a course that I coordinated regarding common law and legal practice in English-speaking countries.

I could gradually discover that that lawyer was a brilliant and extremely dedicated professional, always showing love for what he did and the courage to face new challenges.

Back then, I had the privilege of acting as mentor and advisor to the author of this book, and, in our first period of work together, he informed me that he was preparing a book dedicated to e-commerce and digital services, from a perspective that would unite South America, especially Brazil, with the European Union.

That news made me extremely excited, and for months I was able to follow from a distance the gestation of what would become pioneering work in this area.

After the book was finished and its Portuguese version published, the destiny to which the path opened during the course on common law would lead was revealed to me: even if indirectly, I would have the honour of being part of the history of a fantastic legal work, elaborated with great zeal and dedication, full of details rarely seen in works of this kind.

And so, when Julio invited me to write the preface to the bold English version of the book, I immediately accepted with a great sense of gratitude and happiness.

I wrote these initial words to tell the reader that he now has in his hands not only an inspiring work for the exercise of legal practice in the context of technology and information law, particularly in the field of digital commerce and online services, but also a source of inspiration that shows us that when a small idea is treated with respect, love, and seriousness, its fruits are huge. Certainly these fruits will generate new seeds, which will germinate new fruits in an infinite cycle of abundance and dissemination of knowledge.

The content of the work itself is marked by novelty and depth.

In fact, the reader has in his hands a true practical manual of the legislation applicable to the theme, with a depth that encompasses all the subdivisions of the matter.

Although it is not such a recent theme, electronic commerce and digital services make up a business ecosystem that creates new particularities every day.

If, a decade ago, data protection was a topic that caused little debate, we see that today, not long after, everything has changed. Not long ago, jurists did not even consider the legal problems that would arise, for example, from digital platforms such as social networks.

Trying to apply to the new virtual reality the old concepts adapted from other areas of law proved impossible.

That is why new and revolutionary legislation arose to fill this very new gap. Hence the reason why this book is so timely, pioneering, and complete.

The pioneering spirit stems in particular from the fact that the trade agreement between Mercosur and the European Union has recently shown undeniable progress. Its entry into force, albeit partial, is expected in the coming years, and it will surely become one of the most important trade agreements in the West.

Although the negotiations for the conclusion of the agreement are old, it is evident that it will enter into force in a scenario of digital services and electronic commerce profusion, and, on this issue, one has not seen in the legal editorial market any effectively updated work. At least not with the depth presented herein.

Due to this whole context, the following pages are representative of the commitment and dedication of a person who has a love for what he does, therefore serving as inspiration. In their external essence, they are representative of a new legal dimension that was unveiled with the emergence of the web and, since then, has undergone daily revolutions.

The reader has in his hands, therefore, a precise compass capable of guiding him in this myriad of legal issues that today unite international law with commercial law, the law of contracts and obligations, and with what we now call digital law or even tech law.

I hope you have a good read. I am sure you will.

Julian Henrique Dias Rodrigues

TABLE OF CONTENTS

Capa

Folha de Rosto

Créditos

INTRODUCTION

1 LEGAL SECURITY, CONCEPTS AND TAXATION OF ELECTRONIC COMMERCE IN INTERNATIONAL ORGANISATIONS AND AN ANALYSIS OF THE RULES AND JURISPRUDENCE ON THE DIGITAL ENVIRONMENT IN THE EUROPEAN UNION

1.1. THE CHALLENGE OF LEGAL SECURITY AND TAXATION IN GLOBAL ELECTRONIC COMMERCE AND THE CONCEPTS OF DIGITAL COMMERCE IN THE WTO, UN, OECD, EU AND RTA

1.1.1. THE CHALLENGE OF LEGAL SECURITY AND TAXATION IN THE ELECTRONIC COMMERCE

1.1.2. WTO, UN, OECD, EU AND RTA: CONCEPT AND TAXATION ON ELECTRONIC COMMERCE

1.2. ANALYSIS ON THE PROTECTION OF PERSONAL DATA AND ELECTRONIC COMMERCE IN THE EUROPEAN UNION

1.3. EUROPEAN UNION DIRECTIVES, REGULATIONS AND JURISPRUDENCE GOVERNING THE DIGITAL ENVIRONMENT: ELECTRONIC COMMERCE, ELECTRONIC CONTRACTS, ADVERTISING, DIGITAL SERVICES, CONSUMER RIGHTS, ELECTRONIC SIGNATURES AND OTHER REGULATIONS

1.3.1. ELECTRONIC COMMERCE DIRECTIVE 2000/31

1.3.2. PROPOSAL FOR A DIGITAL SERVICES ACT

1.3.3. MAIN ASPECTS OF THE NEW DIGITAL SERVICES ACT

1.3.4. CONSUMER RIGHTS DIRECTIVE 2011/83

1.3.5. ELECTRONIC IDENTIFICATION REGULATION

1.4. IMPLICATIONS AND DEVELOPMENT OF VALUE ADDED TAX (VAT) IN ELECTRONIC COMMERCE IN THE EUROPEAN UNION

1.5. COMPARATIVE ANALYSIS OF DEEP INTEGRATION AGREEMENTS OF THE EUROPEAN UNION: EU-JAPAN, EU-CANADA, EU-COLOMBIA-PERU-ECUADOR, EU-MERCOSUR

2 PROSPECTS FOR ELECTRONIC COMMERCE IN THE EUROPEAN UNION-MERCOSUR AGREEMENT

2.1. HISTORICAL CONTEXT: FROM THE EMERGENCE OF ECONOMIC BLOCS TO THE EUROPEAN UNION-MERCOSUR AGREEMENT

2.2. OVERVIEW AND GENERAL ASPECTS OF THE AGREEMENT

2.3. ANALYSIS OF THE CHAPTER ON TRADE IN SERVICES AND ESTABLISHMENT

2.4. SUBSECTION AND CLAUSES ON ELECTRONIC COMMERCE AND THEIR PROSPECTS

3 CHALLENGES, HARMONISATION AND PROSPECTS FOR THE ASSOCIATION AGREEMENT FOR MERCOSUR

3.1. THE REGIONAL INTEGRATION CLAUSE IN THE EUROPEAN UNION - MERCOSUR AGREEMENT AND ITS INFLUENCE ON THE HARMONISATION AND NORMATIVE DEVELOPMENT AND INTEGRATION OF MERCOSUR

3.2. ANALYSIS ON TAXATION, DATA PROTECTION, ELECTRONIC COMMERCE AND DIGITAL SERVICES IN MERCOSUR MEMBER COUNTRIES, MAINLY BRAZIL AND ITS JURISPRUDENCE

3.2.1. DOMESTIC TAXATION ON CONSUMPTION IN THE MERCOSUR MEMBERS

3.2.2. DATA PROTECTION

3.2.3. ELECTRONIC CONTRACTS, ELECTRONIC SIGNATURE AND ELECTRONIC COMMERCE IN ARGENTINA, PARAGUAY AND URUGUAY

3.2.4. BRAZIL

3.2.4.1 DATA PROTECTION IN BRAZIL

3.2.4.2. ELECTRONIC CONTRACTS, ELECTRONIC COMMERCE AND THE DIGITAL ENVIRONMENT IN BRAZIL

3.2.4.3 ELECTRONIC SIGNATURE IN BRAZIL

3.3. ANALYSIS OF THE MERCOSUR AGREEMENT ON ELECTRONIC COMMERCE

CONCLUDING REMARKS

REFERENCES

APPENDIX A

APPENDIX B

Landmarks

cover

titlepage

copyright-page

Table of Contents

bibliography

INTRODUCTION

In order to be profitable, commerce requires debureaucratisationand efficiency. Moreover, local and international regulations are needed to prevent fraud, unfair trading practices, economic disruption and legal certainty. The most recent major financial fraud occurred in Germany, involving the company Wirecard1, in a market considered to be well regulated and mature.

In this sense, it is essential that regulations advance in line with the emergence of new social and economic practices, new businesses, and possible new criminal conducts. This guarantees a safe increase in the flow of goods, made possible by the relief provided by Regional Trade Agreements (RTAs), allowing balance points in the global market and avoiding global crises.

Digital commerce, which breaks down national and territorial barriers through the web, is an example of the way in which society keeps changing and restructuring. Therefore, the new social and commercial practices require new rules that provide and guarantee legal security. The need of data protection in electronic commerce and other activities of the digital economy has led the European Union (EU) to legislate on the subject, which culminated in the General Data Protection Regulation (GPDR), considered a complete model to be followed by other democracies.

The local and international digital taxation represents another issuethat countries have addressed. New technologies and the transactions through digital means have made States’ tax systems outdated. Concepts such as services, goods, origin of income (source), and physical location of companies and taxpayers (residences) of the traditional economyare obsolete, with the need of reinterpretation of these concepts. This occurs because the effective operations carried out in electronic commerce allow transactions of intangible goods without the need of physical presence of companies and people in the country of origin and destination, human action in the cross-border flow, and the displacement of physical products. The design of the product can be sent over the internet and forwarded by a third country that is not part of the origin/destination relationship.

A designer’s assignment of usage right by a company in one country to a consumer in another and the sending of this industrial design through the internet enables the buyer to print this designer’s product using a 3D printer. This assignment of the designer’s usage right of a product through the internet avoids the circulation of goods and services across borders. In this sense, this operation does not fit into the traditional tax modalities provided in international agreements and national legislation, not generating tax to be paid in any of the countries involved in the transaction, something that gives origin to a challenge to be addressed by States.

The World Trade Organisation (WTO), the largest international multilateral trade organisation, has not yet managed to generate an agreement that regulates digital trade among its Member States. The European Union, on the other hand, has shown significant evolution in the matter. The bi-regional agreement between the EU and the Southern Common Market (Mercosur) includes a regulatory framework on electronic commerce in the chapter on Trade in Services and Establishment. The aforementioned agreement is comprehensive, deep, state-of-the-art (deep integration) and extensive, bringing chapters with topics that have not been regulated yet by the WTO, such as the one referring to digital trade.

The EU has sought, throughconstant negotiations, trade agreements to overcome barriers, creating better opportunities and an environment for business and trade. The deep integration agreements, sponsored by the EU along with third States, in addition to reproducing WTO rules, regulate standards with the purpose of spreading European principles and values, such as social rights, sustainable trade and environment, human rights and democracy, among others. Besides the EU-Mercosur agreement, the EU-Colombia-Peru-Ecuador, EU-Canada and EU-Japan agreements are other examples worth mentioning.

Besides the tax issue faced by States, the courts in several countries have been settling disputes and receiving new demands involving the digital environment, such as: intellectual property, competition law, consumer law, liability of intermediary hosting and storage services, illegal content published by third parties on digital platforms and social networks, collection and processing of personal data, among others.

In light of the above, this paper analyzes the legal challenges raised by the digital economy, the emergence of local and international regulations, also the challenges and prospects for the EU-Mercosur Agreement in the scope of electronic commerce.

The rules, directives and regulations that regulate the digital environment in the European community have been examined, being also developed a comparative analysis of the articles of these legislations with the text of the clauses of the bi-regional Agreement and the Mercosur Agreement on Electronic Commerce.

It should be noted that the absence of rules for the new digital business models and the new technologies that keep coming up has brought several problems and conflicts in contemporary societies and democracies.

This book seeks to find answers to the questions regarding the need of legal security and regulation of electronic commerce and digital services, specifically in the European Union and Mercosur, addressing the influence of the European Union in regional trade agreements, in the legislation of Mercosur countries, and the prospects, in the scope of digital commerce, of the Association Agreement European Union- Mercosur.

Furthermore, a comparative analysis of the clauses of the agreements on electronic commerce and the regulations in the European Union and Mercosur has been also carried out.

The importance of the analysis of the digital environment both in relation to local laws and international rules and treaties can be attributed to the absence of borders in the virtual environment and the extraterritoriality of digital services.

This work is divided into three chapters, being the first one entitled “Legal security, concepts and taxation of electronic commerce in international organisations and an analysis of the rules and jurisprudence of the digital environment in the European Union”. Chapter 1 presents a preliminary approach on the theme, defining and demonstrating the main evolving aspects of the electronic commerce concept in international organisations and the discussion on taxation and legal certainty, dealing, throughout the chapter, with the normative framework, regulations, directives, jurisprudence and international agreements of the European Union involving the virtual environment.

The second chapter studies the European Union-Mercosur Association Agreement, describing a general overview of its chapters and analyzing all clauses related to electronic commerce.

Finally, the third chapter addresses the influence of the European Union legislation on the digital environment, both in the Mercosur rules and in the laws of the Mercosur countries. In addition, there is an analysis focused on the need of regulatory harmonisation in Mercosur for the effectiveness of the Association Agreement; the regulations of the Digital Law in Argentina, Brazil, Paraguay and Uruguay; also Brazilian jurisprudence and decisions on the matter. This last chapter concludes with the study of the articles of the Mercosur Agreement on Electronic Commerce.

1 Fraud, jail spying: how Wirecard went from ‘new PayPal’ to bankruptcy. German payment system company acknowledged fraud of 1.9 billion euros. Estadão. The New York Times News Service. 26 Jun. 2020. Available on: < https://einvestidor.estadao.com.br/mercado/fraude-wirecard/>. Accessed on: 14 May 2021. STORBECK, Olaf. Wirecard: the frantic final months of a fraudulent operation. Financial Times. 25 Aug. 2020. Available on: <https://www.ft.com/content/6a660a5f-4e8c-41d5-b129-ad5bf9782256>. Accessed on: 14 May 2021.

1 LEGAL SECURITY, CONCEPTS AND TAXATION OF ELECTRONIC COMMERCE IN INTERNATIONAL ORGANISATIONS AND AN ANALYSIS OF THE RULES AND JURISPRUDENCE ON THE DIGITAL ENVIRONMENT IN THE EUROPEAN UNION

Chapter 1 begins by addressing the challenges of legal security and taxation in the virtual environment and the lack of consensus as to the concept of electronic commerce at international trade organisations. Then, in the context of the European Union, a detailed analysis of the main rules and laws that regulate the digital environment has been carried out, including the extensive jurisprudence of the EU Court of Justice and national court decisions of some of its member countries. The chapter concludes with a comparative analysis of the international trade agreements of deep integration between the European Union and third countries, outside the European community. Moreover, a panorama of the influence of the normative framework of the European Union has been outlined, not only in the international agreements of deep integration, but also in the internal legislation of various countries that do not belong to the EU.

1.1. THE CHALLENGE OF LEGAL SECURITY AND TAXATION IN GLOBAL ELECTRONIC COMMERCE AND THE CONCEPTS OF DIGITAL COMMERCE IN THE WTO, UN, OECD, EU AND RTA

1.1.1. THE CHALLENGE OF LEGAL SECURITY AND TAXATION IN THE ELECTRONIC COMMERCE

The enormous growth of transactions in the virtual environment and the accelerated emergence of new technologies, such as the internet of things, 5G network, 3D printer, cloud computing, artificial intelligence, non-fungible token (NFT), among others, bring constant challenges for States’ legislations and the international community.

With the advent of new technological commercial activities and new forms of human interactions and relationships in the virtual environment, there is a risingconstant need to create and update means and rules that ensure legal security, such as the conclusion of virtual contracts, digital signature and protection of personal data. Thus, the electronic commerce is promoting a migration of processes to a digital economy based on functionalities and services.

In this scenario, the evolution and updating of Law occurs in accordance with the Three-Dimensional Theory, whereby first comes the fact, next being it valued by society, soon afterwards arising the rule that regulates it. As described by Reale (2002, Kindle Sites 1279-1294):

An in-depth analysis of the various meanings of the word Law has shown that they correspond to three basic aspects, discernible at any and every moment of legal life: a normative aspect (Law as an order and its respective science); a factual aspect (Law as a fact, or in its social and historical effectiveness) and an axiological aspect (Law as a value of Justice). In recent decades the problem of the three-dimensionality of Law has been the object of systematic studies, culminating in a theory to which I believe I have given a new feature, above all by demonstrating that: a) wherever there is a legal phenomenon, there is always and necessarily an underlying fact (a fact which might be economic, geographic, demographic, technical etc); a value, which confersa certain significance to that fact, inclining or determining the action of men in the sense of attaining or preserving a certain aim or objective; and, finally, a rule or norm, which represents the relationship or measure integrating one of those elements to the other, the fact to the value; b) such elements or factors (fact, value and rule) are not separate from each other, but coexist in a concrete unit; c) moreover, these elements or factors not only require each other, but act as links in a process (we have already seen that Law is a cultural-historical reality) in such a way that the life of Law results from the dynamic and dialectical interaction of the three elements that integrate it.

Completing this understanding, Magalhaes (2017, p. 23) asserts that:

The dynamic process of Law reveals that the legal precepts are applied through time to situations and facts not always coincident, but in line with the understandingprevailing at a particular time or by a particular dominant group. The legal norm is not stratified and immutable, even when it corresponds to a recognised legal principle. Its adaptation to a given concrete situation is made by means of the dynamic process, in which, although serving as a parameter for decision-making in the interest of the community, it takes into account other factors and values applicable to the reality being examined. A quick review of the evolution of some norms of International Law, consecrated for a long period to regulate certain legal relations, shows the political tensions and conflicting economic interests that motivated substantial transformations in the legal order, at the end of a long process, not always peaceful. These tensions are part of the global process of international law formation and its continuous evolution.

Another challenge faced by countries is the taxation of electronic commerce. The provision of services and the supply of intangible goods by means of digital transfer and transactions through computer and telecommunication tools, which do not require the physical presence of the seller or the buyer, neither recognize the borders of States, make the old rules of competence and territoriality of international tax law inapplicable and incompatible.

Therefore, in electronic commerce, a company present in one country may supply goods and services to a consumer in another country, with the IT support located in a third country. This allows multinationals to practice abusive tax planning and base erosion, using countries with low or non-existent taxation to artificially allocate profits.

In this sense, Bianco and Silva (2018, p. 30) conclude that “the intangibles and the electronic commerce require an appropriate and differentiated treatment, not being enough the use of old concepts to try to define and frame them.”

Along those same lines, Silva, Almeida and Martins (2017, p. 68) point out that:

[...] there is no doubt that Law as a human science has to keep adapting to the evolution of human relations, and in this evolution there are the consumer relations through electronic commerce. In recent decades we have witnessed the development of telecommunication means as ways to enable communication and, consequently, legal relations. The globalisation of interpersonal relationships has brought communication networks and systems closer via internet, facilitating consumer relations that at times seemed unimaginable. At this point, the Telecommunications Law allied with the Tax Law has been trying to condense and cover technologies such as streaming and cloud computing, in the pre-existing regulations.

For all the above reasons, the old legal concepts of commerce cannot discipline the mobility of services and products of the digital economy, since the transit of these goods occurs through telecommunications and computational means, neither requiring the physical presence of sellers and buyers nor the traditional logistics structure.

The electronic commerce also enables companies to allocate their profits neither in countries that are not part of the production of the activities and resources nor in source countries. There are cases of multinationals that, through financial engineering and international tax planning, using their head offices, subsidiaries and affiliates, manage to avoid paying taxes in any jurisdiction. Besidesbase erosion, this practice leads to unfair competition, as competing companies that pay taxes correctly are at a disadvantage in the marketplace.

1.1.2. WTO, UN, OECD, EU AND RTA: CONCEPT AND TAXATION ON ELECTRONIC COMMERCE

Although the issue of electronic commerce is on the agenda of negotiations at the WTO, the United Nations (UN), and the Organisation for Economic Co-operation and Development (OECD), it is mainly within the European Union and the Regional Trade Agreements that the standardisation and regulation of electronic commerce and data protection have been taking place.

Trade, in the traditional legal concept, is a set of business acts that consists of habitual exchanges of tangible products or values, through buying and selling, between producers and consumers, with the purpose of obtaining profit, facilitating the circulation of industrial and natural products. In the legal conception of trade, Silva, Almeida and Martins (2017, p. 15) describe that “the main elements that make up trade are (i) exchange between parties - generally producer and consumer; (ii) profit purpose; and (iii) regularity and continuity of the business”.

Moreover, the WTO defines e-commerce as “the ‘production, distribution, marketing, sale or delivery of goods and services by electronic means.’ An electronic commerce transaction can be between companies, families, individuals, governments and other public or private organisations”2.

In the WTO, the paralysis generated by anti-globalisation movements, nationalism and isolationism of some countries, mainly of the United States (USA) in recent years, has interrupted the progress, updating and drafting of agreements on current matters. Furthermore, there has not been aconsensus on the subject of electronic commerce. In1998, the WTO, in order to create multilateral rules in digital trade, adopted the Declaration on Global Electronic Commerce3, establishing a work program.

In 2017, “70 WTO members adopted, at the Buenos Aires Ministerial Conference, the Joint Ministerial Statement on Electronic Commerce”4. Despite the efforts, within the WTO, there has not been a consensus on rules that follow the current evolution of the digital economy. At the UN, discussions around digital trade take place in Working Group IV (Electronic Commerce) of the United Nations Commission on International Trade Law (UNCITRAL), as explained by Caparroz (2021, p. 307).

The OECD has made progress on the matter concerning taxation, for it has elaborated the Model Convention, to avoid double taxation, and the BEPS project, to combat base erosion. Electronic commerce is described by the OECD as “transactions conducted digitally for goods and services that can be delivered digitally or physically, and that involve consumers, firms and governments5”. Orders for services and products are carried out on digital media. However, delivery and payment are not necessarily made via the web.

Since the 19th century, treaties have been drawn up in order to avoid double taxation. It is understood that double taxation, i.e. taxation in the country of origin and destination, is harmful to trade. The developed countries set up the concept of residence and source. However, these concepts have become outdated and ineffective with the digital economy.

The residence is considered the State where the capital costs to promote the economic-commercial activity is developed and occurs, while the source country is where this activity is provided to the final consumer or buyer.

The understanding set up by developed countries is that income would be taxed in the country of residence, since that is where the costs and efforts of production are incurred. The exception would be when the companies of the country of residence have a branch, head office or subsidiary in the State of source of goods or services.

In this sense, the caption of Article 7 of the 2000/2005 OECD Model Convention6 reads as follows:

The profits of a company of a contracting State must only be taxed in that State, unless the company carries on its activity in the other contracting State by means of a permanent establishment situated therein. If the company practices its activity in that way, its profits may be taxed in the other State, but only as far as they are attributable to that permanent establishment.

These concepts of State of residence and State of source have become outdated in the digital commerce, for the digital economy created a disregard of country borders, in view of the fact that intangible activities and products are developed and provided on the internet.

Quite often the allocation of capital and profit of technology companies, as well as the provision of the service or good itself, happens in third countries that are not part of the commercial relationship. This transaction is provided through computers and servers locatedin there.

In face of the ineffectiveness of the 2000/2005 Model Convention vis-à-vis new technology multinationals and other international companies, the OECD developed the BEPS (Base Erosion and Profit Shifting) project. This project consists of developing actions and practices to combat tax erosion. Base Erosion and Profit Shifting refers to “tax planning strategies used by multinational enterprises that exploit gaps and mismatches in tax rules to avoid paying tax”7. According to the OECD, developing countries suffer most from tax avoidance because they have a higher dependency on corporate income tax8.

One of the motivations for the OECD to develop the BEPS project in 2013 was the 2008 crisis, as Silva, Almeida and Martins (2017, p. 67) comment on:

With the advent of the international crisis, worsened in 2008, several countries began to face problems of fiscal balance. Because of this, and in an environment of search for higher tax collection, the OECD mobilized to propose solutions to the loss of revenue, which started the BEPS project.

Santos reinforces this understanding (2018, p. 883), expressing as follows:

[...] the very trigger of the BEPS Project was the indignation of public opinion about the low income tax rates supported by US multinationals in the middle of an economic crisis scenario, such as Apple, Google, GE, Starbucks, among others. In addition, it is known that several multinationals from European countries bear a higher effective income tax rate than similar US multinationals, regardless of the partial territoriality system in force in European Union countries, through the exemption regimes for dividends from abroad. [emphasis added]

Along the same line, Silveira (2018, p. 922-923) explains that:

In January 2013, the then British Prime Minister, David Cameron, stated that large multinational companies were acting in an “unscrupulous” manner in the UK. This statement was made in reaction to a November 2012 report commissioned by the British Parliament, which accused companies such as Amazon, Google and Starbucks of producing significant profits in the country without the corresponding tax collection. The crossfire against large multinationals intensified years before a leak of information, known as the Panama Papers (2016), revealed that David Cameron’s own family had set up a fund in the Bahamas, which made it possible not to collect taxes in the UK. Political grievances aside, the enormous contradiction to which the British politician was exposed is the result of an old discussion: the legitimacy of tax planning structures. Although the debate is not recent, the issue has taken shape due to a specific political and economic context: with the 2008 financial crisis, the world faced a period of fiscal austerity and public spending cuts. At the same time, the information age brought to the public’s attention the enormous incompatibility between the profits produced by large multinationals and the amount of taxes collected in the countries where they operate.

The constitution of the OECD Plan has 15 actions to be adopted by 141 countries of the International Organisation and the G20 countries, including three of the Mercosur members: Argentina, Brazil and Uruguay.

One of the initiatives found in the action plan of the BEPS program in the OECD is Action 1: “Addressing the tax challenges of thedigital economy, with the production of a detailed report identifying the problems created with the digital economy and possible actions to address them”9.

The description of Action 1 of the Action Plan against BEPS expresses the aim to “identify the main difficulties that the digital economy poses for the application of existing international tax rules and develop detailed options to address these difficulties, taking a holistic approach”10. Regarding the expected results, the Plan proposes “a report identifying issues raised by the digital economy and possible actions to address them”.

The 2008 crisis also brought the need of greater regulation in the financial market of the European Union, as discussed by João Nuno Calvão da Silva (2017, p. 396 - 398):

Since the summer of 2007, a serious crisis, first financial, and then also economic and social, has marked the Western panorama, highlighting, in Europe, a banking sector in serious difficulties, discredited before the public, especially the depositors, and a sharp fall in stock markets. In reaction to the crisis, the Union moved towards the construction of a new regulatory framework essentially aimed at correcting and avoiding some of the shortcomings that had led to instability and lack of confidence in the financial world, which, it can be said, did not collapse with more bang and social pain only due to public interventions in Europe and the US. In fact, despite the losses of shareholders, bondholders, depositors and other creditors with the negative results and the insolvency of banks, it was mainly public money, in the United States, and in several European countries, that rescued banks to avoid financial collapse (Stato salvatore) and ensure stability and confidence in a sector which is vital to the economy and society. In the words of Vital Moreira, “the financial crisis, which emerged in the United States in 2008, and then spread to Europe and other continents, made the debate on the importance of the regulatory State even more topical, raising, in particular, the problem of the deficit of effective regulation of financial markets and the need of it to be made at a level other than national, starting at the European level right away. In other words, if public legislation has never lost its relevance, not even in the most liberalizing and deregulatory phase of the end of the last century, the current crisis has made its essential role in the stability and efficiency of the markets and the protection of the collective interest that these do not ensure by themselves.” [emphasis added]

In the area of tax evasion, the European Union has specific rules regarding tax erosion and profit shifting in its Treaty on the Functioning of the European Union (TFEU). Thus, the advantage selectively granted by national public authorities to companies, which may affect trade between the State Parties, distorting competition, is prohibited by the TFEU. Such practice is known as State Aid and is provided for in Articles 107, 108 and 109 of the Treaty11. However, Article 107 itself sets out the aid that may be considered compatible with the internal market and EU’s rules, provided that it is based on reasons of general economic development or compatible policy objectives.

The caption of Article 107 states that:

Article 107.0 (ex Article 87.0 TEC) 1. Save as otherwise provided in the Treaties, any aid granted by a Member State or through State resources in any form whatsoever which distorts or threatens to distort competition by favouring certain undertakings or the production of certain goods shall, in so far as it affects trade between Member States, be incompatible with the internal market.

Two cases involving two large US multinationals have been considered as irregular state aid. In 2014, the European Commission, the executive body of the European Union, initiated an investigation into the operations of two companies incorporated in Luxembourg which belong to Amazon.com, Inc. (American parent company and parent company of the Amazon group): Amazon Europe Holding Technologies and Amazon EU.

Amazon EU counted on 500 employees to operationalise and carry out business activities. They also conducted the entire sales process of the European websites, such as selecting, selling and delivering products. Moreover, theyobtained inputs and dealt with suppliers and customers. Amazon structured its transactions in Europe so that all consumers who purchased its products on any of its websites in the European Union would buy contractually from the company located in Luxembourg. That was, thus, the place where Amazon EU recorded all sales and related revenues and profits of the Amazon group in Europe.

Amazon Europe Holding Technologies is considered a limited partnership that had no employees, headquarters, offices or business activity. However, the holding company acted as an intermediary between the US parent company and Amazon EU. The holding company in Europe held intellectual property rights through a cost-sharing agreement with the US headquarters. Therefore, it held an exclusive license to grant use of these intellectual property rights to the Amazon EU operating company.

Through this tax and corporate engineering, the Amazon group was able to obtain a tax benefit in Luxembourg, for the corporate form of Amazon Europe Holding Technologies was a limited partnership. Under Luxembourg tax law, the Amazon EU operating company was subject to corporation tax, while the profits recorded in the limited partnership were subject to taxation at the partner level, but the partners were located in the US.

In order to fund expenses for the development of intellectual property rights, such as research and development incurred in the US, Amazon EU made annual payments to the parent company in the US.

Through this operation, authorized by a Luxembourg tax ruling, three quarters of Amazon’s profits in Europe were unlawfully attributed to Amazon Europe Holding Technologies, i.e. the Amazon group missed out on paying 90% of the tax due because the holding company was a ‘front’, once it did not actually incur the cost and work of producing the intellectual property in the US or did not actually carry out commercial activities in Europe, limited simply to assign the intellectual property rights to the Amazon EU operating company.

In this sense, the European Commission decided that the payment scheme between the two companies of the same Amazon group, as well asthe Luxembourg tax ruling,was illegal and did not correspond to the economic reality, distorting competition related to other companies on the market, as seen in the following ruling12:

State aid: Commission finds Luxembourg gave illegal tax benefits to Amazon worth around €250 million

Brussels, 4 October 2017

Commissioner Margrethe Vestager, in charge of competition policy, said “Luxembourg gave illegal tax benefits to Amazon. As a result, almost three quarters of Amazon’s profits were not taxed. In other words, Amazon was allowed to pay four times less tax than other local companies subject to the same national tax rules. This is illegal under EU State aid rules. Member States cannot give selective tax benefits to multinational groups that are not available to others.” Following an in-depth investigation launched in October 2014, the Commission has concluded that a tax ruling issued by Luxembourg in 2003, and prolonged in 2011, lowered the tax paid by Amazon in Luxembourg without any valid justification.The tax ruling enabled Amazon to shift the vast majority of its profits from an Amazon group company that is subject to tax in Luxembourg (Amazon EU) to a company which is not subject to tax (Amazon Europe Holding Technologies). In particular, the tax ruling endorsed the payment of a royalty from Amazon EU to Amazon Europe Holding Technologies, which significantly reduced Amazon EU’s taxable profits. The Commission’s investigation showed that the level of the royalty payments, endorsed by the tax ruling, was inflated and did not reflect economic reality. On this basis, the Commission concluded that the tax ruling granted a selective economic advantage to Amazon by allowing the group to pay less tax than other companies subject to the same national tax rules. In fact, the ruling enabled Amazon to avoid taxation on three quarters of the profits it made from all Amazon sales in the EU.

Another case framed by the European Commission as illegal State aid was the one involving Apple and Ireland. Thus, in 2016, the Commission decided13 that Ireland granted undue tax advantages through two tax rulings issued in favor of Apple, for they artificially and substantially reduced the tax paid by it in Ireland between 1991 and 2014, causing illegal aid and advantage of approximatelyEUR 13 billion. Also according to the decision, the undue advantage is: “unlawful under EU State aid rules as it allowed Apple to pay substantially less tax than other companies.”

In short, the difference of understanding and concept on electronic commerce in international organisations, as well as the lack of consensus, hinders the development of international standards and regulations on the subject. The OECD has managed to advance on some points related to base erosion, in terms of proposals for action, studies, models and definitions. However, it is within the scope of the European Union and Regional Trade Agreements that the matter has evolved. It should be noted that digital trade has already been growing in recent years, but it was with the beginning of the covid-19 pandemic and the restrictions and social isolation caused by the health crisis that, from the beginning of 2020, digital trade has reached record growth, anticipating trends of five to ten years. This reinforces the importance and the need of regulatory update in the sector.

1.2. ANALYSIS ON THE PROTECTION OF PERSONAL DATA AND ELECTRONIC COMMERCE IN THE EUROPEAN UNION

With the advance of computer technology in developed countries, the State of Hesse in Germany created the first data protection law in the world in 1970. The Hessian Data Protection Act (Hessisches Datenschutzgesetz) was intended to control databases and their processing by public administration and large companies.

Another landmark in data protection was the German Supreme Court’s 1983 decision. It considered part of the federal legislation unconstitutional in order to carry out demographic censuses, which included 160 personal questions and possible fine for any citizen who refused to answer them. The so-called Census Judgment vetoed the collection of personal information in this census, such as political ideologies, religious beliefs and professional life, and established that individuals possess informational self-determination, i.e. it granted the individual the power to decide about the collection, use and disclosure of their personal data.

According to Vainzof (2019, p. 34), this judgment “established a true Magna Carta in terms of personal data protection, for the first time recognizing it as a fundamental right, declaring that the citizen has the right to ‘informational self-determination’”.

It should be noted that the historical context was that of the Cold War, a period when the East Germany was ruled by an authoritarian government, with the regime’s secret police and intelligence services monitoring and collecting information from its nationals. The decision was taken by the Supreme Court of the Federal Republic of Germany (West Germany) as a way to guarantee the democratic regime and the protection of the individual before the West German State in the face of this census.

In 1973, Sweden created a national legislation for database, and, in 1975, the United States followed the same trend. Later, France, Denmark, Luxembourg, among other European countries, enacted their norms in relation to the theme. However, the first legislations were generic and difficult to apply in practice. Following the normative evolution, in the second half of the 70s the second generation laws involving the theme appear, with the inclusion of the right to data privacy in the Constitutions of Portugal, Spain and Austria.

In this context, data protection has become a fundamental right in the European Union, enshrined in different regulatory texts. The Treaty of Lisbon, in force since 2009, which changed the previous treaties and the structure of the European Union, presented data protection, already included in the previous Treaty of the European Union (TCE). Currently, in the European Union, besides present in the Treaty of Lisbon, the right of all persons to the protection of their personal data is provided in Article 8 of the Charter of Fundamental Rights of the EU and in Article 16 of the Treaty on the Functioning of the European Union. Article 8 of the Charter also provides that:

[...]

2. Such data must be processed fairly for specified purposes and on the basis of the consent of the person concerned or some other legitimate basis laid down by law. Everyone has the right of access to data which has been collected concerning him or her, and the right to have it rectified.

With the adoption of the Lisbon Treaty, the Charter of Fundamental Rights of the European Union was incorporated into the Treaty, ex vi, in article 6, which implies that it has the same legal value as the EU Treaties (Primary or Original Law), as stated by Coelho in his book Mecanismos de Proteção aos Direitos Fundamentais na União Europeia (Mechanisms for the Protection of Fundamental Rights in the European Union).

The regulations that make up the legal framework of the European Union are divided into two hierarchical categories: Primary Law and Secondary Law. Primary Law is considered to be original law. Deriving from the Member States, it comprises the Treaties instituting and revising the EU. It also includes the EU’s international treaties of primary law. As argued by Jónatas E. M. Machado (2018, p. 208), “Currently, the consolidated versions of the TEU and the TFEU are in force, which, along with the Charter of Fundamental Rights, form part of the Treaties governing the EU. They are the basis of the EU’s original law.” Secondary or derivative law, on the other hand, is mainly composed of regulations, directives, decisions, recommendations and opinions, all listed in Article 288 of the TFEU. Machado (2018, p. 217) also describes that “EU secondary law is made up of the rules created by the institutions established by primary law, in accordance with their respective material and formal parameters”, thus, “their validity depends on compliance with those parameters.”

In relation to regulations and directives, Article 288 TFEU provides as follows:

A regulation shall have general application. It shall be binding in its entirety and directly applicable in all Member States.A directive shall be binding, as to the result to be achieved, upon each Member State to which it is addressed, but shall leave to the national authorities the choice of form and methods.

Directive 95/46 governed data protection in the EU from 1995 to 2018. This directive was the first standard that expressly implemented and regulated data protection, being repealed and replaced by the General Data Protection Regulation (GDPR). The GDPR regulates and establishes the rules concerning the protection and processing of personal data of individuals, i.e. of natural persons, and the free movement of such data, as stated in Article 1 of the Regulation. In this sense, the GDPR provides elements for the fundamental right to data protection present in the EU Charter of Fundamental Rights and the TFEU.

In 2018, the GDPR came into force in the European Union. According to the European Commission, besides being a precipitous provision to strengthen the fundamental rights of individuals in the digital environment, this regulation also aims to “facilitate business by clarifying rules for companies and public bodies in the digital single market”. The Commission also argues that the definition and choice of a single legislative act aims to “do away with the current fragmentation in different national systems and unnecessary administrative burdens.”14

Therefore, the application of the GDPR is uniform across all EU Member States, beingconsidered more advantageous and more effective than the old EU’s data protection legislation. The previous model was based on the Directive 95/46, which required, for purposes of application, the internalisation with editing of internal laws so that it would have validity in each Member State, which brought difficulties and disparities in the execution of this legislation. This provides greater legal security for investments and for the market, since it makes available clear and well-defined rules, gathered in a single regulation.

The Regulation was structured to guarantee the protection of citizens’ data without hindering the technological advances and the new business models of the digital economy. It should be noted that these new digital business formats use personal data as a way to generate value for all types of companies and commercial activities. Through the capture and processing of personal data, profiling and monitoring of the behavior of the holders of such data, through analysis and being able to predict preferences, digital companies are able to monetize and profit from such information.

Recitals 6 and 7 of the GDPR15 describe the importance and necessity of personal data protection in the current context of technological advances, information processing and global information flow:

Whereas:

[...]

(6) Rapid technological developments and globalisation have brought new challenges for the protection of personal data. The scale of the collection and sharing of personal data has increased significantly. Technology allows both private companies and public authorities to make use of personal data on an unprecedented scale in order to pursue their activities. Natural persons increasingly make personal information available publicly and globally. Technology has transformed both the economy and social life, and should further facilitate the free flow of personal data within the Union and the transfer to third countries and international organisations, while ensuring a high level of the protection of personal data.

(7) Those developments require a strong and more coherent data protection framework in the Union, backed by strong enforcement, given the importance of creating the trust that will allow the digital economy to develop across the internal market. Natural persons should have control of their own personal data. Legal and practical certainty for natural persons, economic operators and public authorities should be enhanced.

Recitals 9 and 10 justify the transition from Directive 95/56/EC to the GDPR, describing that, although the objectives and principles in the previous regulation remain valid, there was a need to structure the rules on the protection and processing of data of natural persons with the binding effect of a regulation as a response to the EU public opinion that there are risks and insecurity in electronic activities. This required standardisation for the entire Union. Thus, the trading blocupdated and unified the personal data protection rules through a Regulation in order to ensure uniform protection for citizens of the European community, harmonize devices, avoid obstacles to economic activity and distortion of competition, also allowing the free movement of data between Member States.

In this perspective, Wasastjerna (2020, p. 40) states that:

Personal data as currency. Since the European Commission’s well-known decision in 2017 in Google Search (Shopping) where Google was found guilty of abusing its dominance as a search engine, and slapped with a record fine of EUR 2.42 billion, it is no longer unrealistic to say that individuals pay for supposedly free online services by giving away their personal data. According to the OECD, the expression online ‘free’ service is generally considered misleading for consumers. The online services delivered, in fact, ... involve non-pecuniary costs (for consumers) in the form of providing personal data, paying attention to ads, or the opportunity costs of reading privacy policies? With the transition to the data economy, consumer data has become a new tradeable good. Companies are adopting business models with personal data as a key resource or input and implementing strategies to acquire data advantage over rivals. Put differently, Tim Wu maintains that human attention is the resource, as an increasingly large sector of the economy, including technology companies such as Google and Facebook, along with parts of traditional media, actually depend on so-called attention markets for their revenue.

Thus, it is worth highlighting that social networks, such as the traditional media, need to attract the attention of consumers and viewers attention to subjects and programs. This is a paradigm shift, as well as a transition of communication and advertising media. Regarding the traditional media, taking as an example a television programming that is attractive to the public, it is observed the capture of viewers and advertisements during the broadcast break, being one of the main forms of income for the channel.

In social networks, a similar logic of attracting viewers and users occurs. However, new forms and means of engagement, as well as sponsorship, treatmentand collection of personal data, generated due to the discussion of certain themes, allow platforms to monetize, direct consumption and produce trendsin all aspects of society and social relations. They are yet to be regulated in most countries or international organisations, unlike traditional media, which have defined standards. Furthermore, the market power of technology multinationals in this new data economy is infinitely greater than that of traditional media and companies.

In social networks, engagement occurs through digital influencers who expose and disseminate a certain subject, as well as through artificial intelligence and the algorithms of the platforms of these big techs. Therefore, it is possible to include advertising of products and companies through paid advertising, sponsorship and boosting of publications on networks. The more users are connected to social networks, engaged in something, the more these networks make money from advertising, data monetisation, analysis of user profiles and behavior mapping. There is also the commercialisation of personal data to third parties. Social media companies and other big tech platforms have created a new business model. The issue raised in the European Union is not about the the prohibition of such business models, butregulation in order to create rules clearly and in a way to bring balance to these new relationships between companies and consumers, as well as between companies and competitors, the latter having the purpose of bringing balance to the market.

Thus, as Wasastjerna describes, a growing field of economy uses personal data and human attention as a strategy to gain advantage over competitors, i.e., it is a new model of attention market that provides large revenues for companies. Large multinational technology companies, e.g. Google and Amazon, and not only social networks, e.g. Facebook, use these new means of data monetisation to extend their dominant market power over their opponents.

From this perspective, in addition to questions about people’s autonomy, dignity and privacy, covered by the European Union’s data protection regulation, the growing market for the exploitation, collection, and processing of personal information for commercial use also raises questions concerning competition law and policy. Personal information has become a valuable item, a commodity. Recent high-profile cases involving technology giants in the European Union have drawn public attention about the activity control over large data sets and the implications for privacy and competition law.

Recently, Amazon received the largest fine ever under the GDPR. The National Commission for Data Protection of Luxembourg - CNPD, where the company is based in the EU, imposed a fine of USD 886.55 million on 15 July 2021, relating to advertising practices.16 Considering that an appeal is still pending, in accordance with local law, the CNPD cannotdisclose further details about the decision yet. The fine came to light “given the fact that on July 29, 2021 Amazon published its quarterly results and publicly disclosed that the company was imposed a fine from the Luxembourg regulator on data protection because of infringements”17 of the GDPR.

In this context, the monetisation of personal data has become common today. Michael O’Doherty (2020, p. 200 - 201) refers to this context from the ratification of the EU Charter on Fundamental Rights in 2000 to the present day, describing the changing perception and understanding of data protection and monetisation of personal information over the years in the EU, as well as the technological evolution of business models in the collection and processing of this information by platform enterprises of social media and search engine providers: