Mobile Commerce: Making It Work for Canadians

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Mobile Commerce: Making It Work for Canadians Mobile Commerce: Making it Work for Canadians Prepared by: Public Interest Advocacy Centre By Esteban Uribe Public Interest Advocacy Centre 1204 – ONE Nicholas St. Ottawa, Ontario K1N 7B7 April 3, 2007 1 Copyright 2007 PIAC Contents may not be commercially reproduced. Any other reproduction with acknowledgment is encouraged. The Public Interest Advocacy Centre (PIAC) Suite 1204 ONE Nicholas Street Ottawa, ON K1N 7B7 Canadian Cataloguing and Publication Data Uribe, Esteban Mobile Commerce: Making it work for Canadians ISBN 1-895060-81-8 2 Mobile Commerce: Making it Work for Canadians TABLE OF CONTENTS TABLE OF CONTENTS................................................................................................................ 3 EXECUTIVE SUMMARY ............................................................................................................ 5 INTRODUCTION .......................................................................................................................... 7 M-COMMERCE: THE GROWING MOBILE NATURE OF E-COMMERCE ........................... 9 International Law Applicable to M-Commerce.......................................................................... 9 CONSUMER PROTECTION IN A USER CENTERED M-COMMERCE WORLD................ 11 OECD Guidelines for Consumer Protection in the Context of E-Commerce .......................... 13 Mobile Commerce: At the Core of ICT Infrastructure and Access.......................................... 13 M-PAYMENTS: THE USE OF MOBILE PHONES AS WALLETS......................................... 15 TECHNOLOGICAL FRAGMENTATION: A COSTLY BARRIER TO M-COMMERCE ...... 16 OVERVIEW OF M-COMMERCE ENABLING TECHNOLOGIES ......................................... 17 Cellular Technologies ............................................................................................................... 17 Access technologies.............................................................................................................. 17 Second (2G) and “Second and a Half” (2.5G) Generation Mobile................................... 18 2G and 2.5G standards..................................................................................................... 18 Third Generation Mobile or 3G ........................................................................................ 19 “Proximity” wireless technologies and applications enabling m-commerce........................ 20 RFID (Radio Frequency Identification)............................................................................ 20 NFC (Near Field Communications).................................................................................. 21 LBS (Location Based Services)........................................................................................ 21 Consumer Concerns Over RFID Technologies ................................................................ 22 Non-radio m-commerce enabling technologies.................................................................... 23 SMS................................................................................................................................... 23 Consumer Concerns on SMS............................................................................................ 25 2D Barcodes...................................................................................................................... 25 Mobile software applications for Internet access.................................................................. 26 Wireless Application Protocol (WAP).............................................................................. 26 Binary Runtime Environment for Wireless (BREW) ....................................................... 27 Java Micro Edition (J2ME)............................................................................................... 27 NTT DoCoMo’s i-mode ................................................................................................... 28 M-COMMERCE IN THE WORLD ............................................................................................. 28 Japan ......................................................................................................................................... 28 Europe....................................................................................................................................... 29 United States ............................................................................................................................. 30 Africa ........................................................................................................................................ 31 M-COMMERCE IN CANADA ................................................................................................... 32 Size of the Canadian M-Commerce Market ............................................................................. 33 POLLARA’S SURVEY ON THE CANADIAN MOBILE INTERNET..................................... 34 Limited Mobile Internet Content Offered in Canada................................................................ 34 Technology and Pricing: Barriers to Current Users.................................................................. 34 Users’ Information Security and Privacy: Government and Industry Must Act ...................... 34 Mobile Internet Users’ Stance on Spam ................................................................................... 35 Canadian Mobile Internet Users and Network Neutrality ........................................................ 35 Public Interest Advocacy Centre 3 Mobile Commerce: Making it Work for Canadians BARRIERS TO M-COMMERCE IN CANADA......................................................................... 35 Pricing....................................................................................................................................... 35 Mobile users’ dissatisfaction with pricing ............................................................................ 36 Wireless Pricing Relative to OECD Economies....................................................................... 38 3G network coverage ............................................................................................................ 39 Net neutrality and the mobile Internet .................................................................................. 39 The Canadian “semi-walled garden” approach..................................................................... 40 ISSUES RAISED BY M-COMMERCE AFFECTING CONSUMERS...................................... 41 Consumers’ Privacy and Personal Information Protection....................................................... 41 Risks of privacy violations by private actors........................................................................ 41 Privacy complaints lodged with the Privacy Commissioner under PIPEDA ....................... 43 Risk of privacy violations by state action............................................................................. 44 Security of M-Commerce Transactions.................................................................................... 45 Viruses attack on mobile phones and PDAs......................................................................... 45 Identity theft.......................................................................................................................... 45 M-commerce fraudulent activities on the rise: TACD ......................................................... 46 Recent events of data security breaches and identity theft in Canada:................................. 47 Security complaints lodged with the Privacy Commissioner under PIPEDA ...................... 48 Industry still not up to the security threat: The Deloite & Touche survey ........................... 49 What consumers can do ........................................................................................................ 49 Mobile Spam – SMiShing......................................................................................................... 50 Mobile Spam in the World........................................................................................................51 CONTRACTUAL ISSUES .......................................................................................................... 53 Carriers’ Terms of Service........................................................................................................ 53 M-Commerce Terms of Service................................................................................................ 55 Unfair or Inefficient Contracts: The Behavioural Economics Perspective............................... 55 COMMUNICATIONS WITH MINORS AND ILLEGAL CONTENT ...................................... 56 Content and Industry’s Self-Regulation in Canada .................................................................. 57 The European Co-Regulation Approach................................................................................... 58 CONCLUSION............................................................................................................................. 58 RECOMMENDATIONS.............................................................................................................. 60 Public Interest Advocacy Centre 4 Mobile Commerce: Making it Work for Canadians EXECUTIVE SUMMARY This report focuses on use of mobile phones for Internet commercial transactions and point of sale (POS)
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