The role of the coronavirus crisis in e-Commerce, potentially boosting automation and digitalisation processes

Written on 21 Apr 2020

Whilst the harsh measures adopted to face the health crisis at the beginning of this year 2020 may have a negative impact on the economy, e-Commerce is expected to play a massive role as a key sector during this COVID-19 outbreak. Thus, we consider that this crisis may be a good opportunity to invest in the development of optimised e-Commerce networks.

This health crisis caused by the SARS-CoV-2 virus has forced the adoption of extraordinary measures in many countries around the globe. In Spain, we have been under a state of alarm since the publication of Royal Decree 463/2020, of 14 March, declaring the state of alarm for the management of the health crisis situation caused by COVID-19, which enables the Government to adopt measures that may undermine the rights of the citizens for the benefit of public health. One of the measures adopted in this Royal Decree, as in many other countries, is the suspension of commercial activity in the majority of brick-and-mortar stores (subject to the exceptions set forth in the Royal Decree), paralysing a large part of the Spanish economy for as long as the state of alarm remains in place.

Notwithstanding the above, Royal Decree 463/2020 expressly permits e-Commerce activities, as carrying out these activities would not usually entail a risk to public health (unless there is a delivery involved) and, among other things, they would be considered essential in order for the most vulnerable groups to stock up any necessary products, minimising risks of contagion in doing so. In this sense, e-Commerce may be considered a vital factor for keeping a significant part of retailers' business network afloat. Moreover, the situation caused by this health crisis may strengthen the hypothesis that business digitalisation is no longer an option, but a requirement for being able to compete on equal terms in the economy of the 21st century. While this was already a trend in the world economy, it should be noted that a fast adaptation might be extremely important for many businesses.

Although activities relating to the e-Commerce sector would not usually entail a significant risk to health, the provision of services under models that envisage a hybrid e-Commerce network, which involve packages being picked up by the customer or being sent by deliverers, it might be subject to some limitations set forth to slow down the progression of coronavirus (as far as handing over the relevant package is concerned). In this sense, the Ministry of Industry, Commerce, and Tourism has published some Guidelines with Recommendations on the Development of Distance Commercial Activities and the Supply for Rural Areas without Commercial Establishments. Although the recommendations included therein would not be binding, these would serve to comply with the recommendations and obligations of health authorities (which are mandatory pursuant to Royal Decree 463/2020).

As a direct consequence of the necessity of deliveries compatible with social distancing measures, the use of drones might emerge as a good alternative for those cases in which the nature of the package allows it. In relation to the implementation of models consisting of drone deployment, it would be important to take into account the provisions of the Commission Implementing Regulation (EU) 2019/947 of 24 May 2019 on the rules and procedures for the operation of unmanned aircraft, which shall be applicable from 1 of July 2020. Yet, the provisions set forth in Royal Decree 1036/2017, of 15 December, regulating the civil use of unmanned aircraft shall be applicable during the transition periods provided under Regulation 2019/947 and in those operational situations that would not otherwise be covered therein.

Another type of worldwide projects that would have been developing before the crisis are Smart Cities. These might help to minimise the risk of spreading the virus with the incorporation of autonomous and intelligent transport systems. Nonetheless, it should be noted that any progress made in this field should not be yielded against the privacy of individuals. Thus, the principles enshrined in the GDPR should be born in mind at any time, with special consideration to the principle of data minimisation and accountability. Also, the obligations on cybersecurity and network security set forth in Royal Decree 12/2018, of 7 September, on network security and information systems are equally important.

Another consequence from the adoption of the measures under Royal Decree 463/2020 is the fact that delivery times relating to the relevant packages have been increased. The Guidelines of the Ministry of Industry, Commerce, and Tourism note that the entrepreneur has the obligation to inform the consumer of this fact, providing the relevant notice on its website so that customers may manage their expectations accordingly. Furthermore, it is important to bear in mind when delivering products to customers that one of the most relevant consumer-related measures adopted by Royal Decree Law 8/2020, of 17 March, on extraordinary urgent measures to deal with the economic and social impact of COVID-19, is the interruption of the term for exercising the right of withdrawal until the state of alarm is lifted.

The Guidelines also include recommendations such as encouraging and enabling online payment. This recommendation is in line with multiple statements made by the European Banking Authority (EBA) pursuant to the situation caused by COVID-19. In this regard, it should be noted that the statement issued by the EBA on 31 of March has exempted competent national authorities from the obligation to report on their readiness to meet the strong customer authentication (SCA) –a tool whose implementation enables the strengthening of user security and the reduction of the risk of fraud in electronic transactions– requirements for e-Commerce card-based transactions.

For cases where online payment is not enabled, the Guidelines of the Ministry of Industry, Commerce, and Tourism recommend that the customer makes the relevant payment by card or mobile phone. In this sense, the EBA has recommended that payment service providers support consumers in making their payments without physical contact, by making use of the existing exemption from SCA available for contactless payments at the point of sale under Article 11 of Delegated Regulation (EU) 2018/389 supplementing the so-called PSD2.

Hence, we remain uncertain of the particular impact that the coronavirus may have on e-Commerce platforms once the state of alarm is lifted, taking into consideration the measures adopted to reduce the risk of contagion in the development of e-Commerce activities and the expected growth in the sector.