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Roger Clarke's 'Issues in EC and EPublishing'

Key Issues in Electronic Commerce and Electronic Publishing

Roger Clarke

Principal, Xamax Consultancy Pty Ltd, Canberra

Visiting Fellow, Department of Computer Science, Australian National University

Version of 22 November 1998

© Xamax Consultancy Pty Ltd, 1998

The first version of this paper is to be presented at Information Online and On Disc 99, Sydney, 19 - 21 January 1999

This document is at


An overview of electronic commerce is provided. Electronic publishing is examined as a particular form of electronic commerce. In comparison with the explosion of energy that characterised the arrival of electronic communities, electronic commerce and publishing are merely struggling towards their expected, very bright future. This paper identifies the most important of the issues that confront the application of the Internet for professional and commercial purposes.


1. Introduction

Electronic commerce has been adopted much more slowly than had been originally hoped. For-fee electronic publishing is also expanding less quickly than might have been expected. The paper examines the reasons underlying these disappointments. In addition to economic factors, it also identifies issues that are of public policy importance. It builds on a large body of work previously published in electronic form.

The paper commences with a brief overview of electronic commerce. Electronic publishing is then defined as a particular form of electronic commerce. The key issues in each area are examined. Suggestions are made as to how the impediments to electronic commerce and electronic publishing need to be addressed.

2. Electronic Commerce

Since its emergence in the early 1990s (see Clarke 1993a), the term 'electronic commerce' has become public property, and every consultant and academic has their own definition. It is most usefully defined quite broadly, as follows:

electronic commerce is the conduct of business with the assistance of telecommunications, and of telecommunications-based tools

The term's origins are in the area of the procurement of goods and services. It is being increasingly used to refer also to business processes that have nothing to do with procurement, such as electronic services delivery by government agencies, registration and licensing, student enrolment, and court administration. The scope of electronic commerce can therefore be treated as being as narrow as `electronic trading', or as broad as `electronic business'. An introduction is provided at Clarke (1997-h).

The most common application, referred to by this author as 'deliberative purchasing', can be modelled as a 6-phase process, comprising:

Electronic commerce can support all aspects of trade in physical goods except the actual delivery. Digital goods, on the other hand, can even be delivered electronically.

3. Electronic Publishing

3.1 As a Form of Electronic Commerce

The 'deliberative purchasing' model of electronic commerce represents a conventional 'industrial revolution' / 'rationalist management' view: resources are allocated efficiently through the use of a structured process of sequential steps.

This perspective was applied to electronic publishing in Clarke (1997g), which perceives electronic publishing to be a defined sub-set of electronic commerce:

electronic publishing is electronic commerce in digital goods and services that are intended for consumption by the human senses

It encompasses a wide range of formats, including:

The following are examples of the kinds of digital goods and services that are encompassed by that definition:

Software publishing requires essentially the same infrastructure as electronic publishing. Moreover, software is increasingly an intrinsic component of electronic publications, particularly in the form of Javascript and Java applets.

The following sub-sections draw on Clarke (1997g) to provide a brief overview of the transitions through which the publishing industry is passing.

3.2 From Conventional Publishing ...

A very substantial industry emerged from the innovations of Gutenberg and Caxton. It evidences many of the hallmarks of the industrial age, such as specialisation of labour and enterprise, and economies of scale. It has naturally resisted, and then sought to accommodate, the various forms of information technology.

The following graphic strips it to its bare essentials, and presents it in a form that enables subsequent phases to be distinguished.

Exhibit 3.2: Conventional Publishing, 1450-1995

3.3 ... via Desk-Top Publishing ...

During the mid-1980s, it became feasible to prepare quite sophisticated layouts, using a PC of the kinds affordable not only by small businesses, but also by individuals. This substantially increased the speed of production, enabled higher quality presentation, and began to undermine the justification of large publishing houses' dominance of the publishing process.

Exhibit 3.3: Desk-Top Publishing, 1985-20..

3.4 ... and Electronic Publishing ...

Desk-top publishing essentially electronised aspects of the production process for conventionally printed materials. During the early-to-mid-1990s, it became increasingly feasible to publish materials using media other than sacrificial arborea (aka dead trees). CD-ROMs were an early mover, but various forms of Internet-reticulated soft-copy emerged, and the explosion of the World Wide Web, commencing in 1993, quickly settled the argument about the medium of choice.

Exhibit 3.4: Electronic Publishing, 1990-20..

3.5 ... and Cross-Media Publishing ...

During the latter part of the 1990s, maturation has been taking place at both ends of the production chain. At the content-originator's end, there is a drift away from specialised software in which to prepare electronic publications, as mainstream 'word processing' packages are migrated towards 'document processing' tools. Meanwhile, the infrastructure is being developed to enable storage in one, master-format (most convincingly XML), with delivery to the consumer in any of multiple formats (e.g. HTML, Word, PDF, Postscript, XML).

Exhibit 3.5: Cross-Media Publishing, 1998-20..

3.6 ... to Interactive 'Publishing'

The conventional models described above provide a valuable basis for analysis. But they represent recent and current conventionalism, and miss the revolutionary impacts of the channels and media on which electronic publishing is built. This section draws on Clarke (1997g), in particular what was described in that paper as 'Stage 4'.

Each model described so far has involved a production-line or industry value-chain, with a series of providers passing materials to an ultimate consumer of content. Publishing has assumed a mass medium, broadcast, one-way.

Technologies that are already available embody the capability for recipients to interact with the content, variously by changing it in place, or by spawning new versions of it. This results in the critical differences that:

The process can therefore become one of re-cycling; of component-based, ongoing re-creation or cumulative creativity; and of intentional collage rather than (nominally) original creation. As a result, the model changes from a sequence to a cluster, 'like bees around a honey pot'.

Exhibit 3.6: Interactive 'Publishing', 2000-2100

This emergent model has enormous implications, and throws into serious doubt the survival of the term 'publishing' in anything like its contemporary meaning. The long-term directions are well worth considering, but not in this paper.

3.7 Impacts on the Publishing Industry

* Theory

The publishing industry is not yet dramatically different from that of a decade earlier, and it appears likely to stagger into the early twenty-first century in something like its present form. Its structure, however, has been, is being, and will continue to be pummelled by the forces of change.

The strategic impact of information technologies on the publishing industry can be usefully analysed with the assistance of a taxonomy originally developed in Clarke (1992):

The less dramatic changes are already evident, through multiple instances of function re-allocation and changes in intermediation. Some industry players, particularly new entrants, and the more nimble of the established enterprises, have harnessed technology to their corporate strategy. Meanwhile, the spectre of complete industry restructuring hovers over the established powers of the industry.

* Practice: A Case Study

Seeing the way in which these impacts are occurring can be much easier in a specific industry segment rather than in the publishing industry as a whole.

In the music industry, for example, the sound format MPEG Layer-3 (MP3) is causing pandemonium. It enables the straightforward publication and use of CD-quality music, such that individuals can pass around or trade recordings, instead of having to pay for a recording produced by the music industry publishing value-chain.

As a correspondent to the link list put it, "the mp3 tech & culture is now a viable alternative for artists to contractual enslavement to a major record company. Also, it's now possible for anyone to publish their music on the net. The majors no longer decide who has their music released or what individual artists release. This is great for the music culture, but disastrous for the music industry" (, posting of 2 November 1998).

4. Key Issues

The preceding sections have laid the foundation for a catalogue of issues impacting on participants in electronic commerce and electronic publishing.

Electronic commerce in general represents a major change in the patterns of behaviour of corporations and government agencies, small business enterprises, and consumers. Its growth, however, has been disappointingly slow, at least in comparison with the usual metrics for Internet-related growth. The reasons are discussed in the next two sub-sections. The third sub-section then considers additional issues that relate specifically to electronic publishing.

4.1 Issues in Electronic Commerce - Business-With-Business

There are some significant differences in the factors impeding adoption of electronic commerce by businesses and by consumers.

The reasons for slow adoption in respect of commerce between business enterprises are discussed in Clarke (1997j). The sequence of the following categories and items is not intended to imply prioritisation, because the importance of the factors varies considerably between organisations.

Exhibit 4.1: Impediments to Business-With-Business EC

Small business enterprises (SMEs), which are commonly defined as those having fewer than 100 employees if in manufacturing, or 20 if in services, and micro-enterprises (c. 1-3 people), may also exhibit adoption behaviour more akin to consumers than to medium-sized and large enterprises. Hence the concerns identified in the following sub-section also tend to be of at least some relevance to the large numbers of relatively smaller businesses.

4.2 Issues in Electronic Commerce - Business-With-Consumer

(a) Willingness To Pay

Electronic commerce is presaged on the assumption that the participants will pay for what they buy. But there has been a marked reluctance among net-users to actually part with their money, particularly for digital goods and services. As a result, much of the current business on the Internet is funded using business models other than user-pays, primarily advertising and sponsorship.

The origins of netizens' apparent unwillingness to pay lie in the community-service ethos that pervaded the original, researcher-dominated Internet (c. 1976-1990), and the early period of popularisation and absorption of the bulletin-board and newsgroup users (c. 1990-1994). A later section addresses the question of how deeply engrained this unwillingness is, and whether and how it can be overcome.

(b) Trust

Consumers are seriously concerned about a number of dimensions of trust. These concerns are discussed in a succession of papers indexed on my site, and can be analysed into the following categories:

This cluster of public confidence issues also besets electronic services delivery by governments. Until and unless they are effectively addressed, sponsors of electronic commerce and electronic services delivery schemes will continue to be disappointed by low adoption rates.

(c) The Privacy of Personal Data

Many people are concerned about the trails that they leave behind them in cyberspace (Clarke 1996d), and by the use of models of their behaviour using the techniques of the digital persona (Clarke 1994b), of data matching Clarke 1994e) and of profiling (Clarke 1993b).

Privacy in general is addressed in (Clarke 1997-h), and Internet privacy is dealt with at considerable length in the following documents:

(d) Identification, Anonymity and Pseudonymity

The Internet has stimulated enthusiasm, and at times euphoria, for freedom in cyberspace, typified by John Perry Barlow's conception of it as the 'electronic frontier'. The kinds of freedoms that netizens assert are discussed in Clarke (1997i) and include:

One of the ways that has been suggested whereby trust can be engendered is through the use of digital signatures by each party to a transaction. Conventional digital signature technology involves compulsory and authenticated identification of the parties to an electronic transaction. Why this is actually quite forbidding, and at least as much of a threat as it is a promise, is discussed in Clarke (1997k). In Clarke (1998d), it is argued that blind pursuit of authenticated identity as a basis for trust in cyberspace transactions will actually worsen the problem, rather than solving it.

Anonymity has been the norm in many transactions in the past, and, even in the context of Internet, remains entirely feasible in many electronic transactions. Rather than converting hitherto anonymous transactions into identified ones, alternative approaches need to be applied, which are less threatening to consumers, in particular:

(e) Consumer Protections

It is argued in Clarke (1996f) that technology-based consumer transactions are, in many cases, not subject to the same kinds of protections as are applicable to transactions using established points-of-sale, and door-to-door, mail and telephone telling. The specifics of public interests in electronic commerce in financial services are examined at Clarke(1997b).

There are significant challenges confronting the establishment of an effective regulatory framework for Internet activities. Information about attempts to regulate pornographic materials is in Clarke (1996-a), and a study of the feasibility of regulating Internet gambling is at Clarke et al. (1998c). Difficulties encountered in investigating criminal activity on the Internet are assessed at Clarke et al. (1998b).

The central problem is that laws (with few exceptions and some minor qualifications) are limited to geographical jurisdictions. It is now feasible for trans-jurisdictionality, extra-jurisdictionality and supra-jurisdictionality to be indulged in by many more organisations and individuals than was ever feasible before the advent of the Internet generally, and electronic commerce in particular. This is considered at Clarke (1997b) and in Clarke (1997e). Indeed, it has been argued that the Internet's architecture is a more effective basis for the regulation of net-behaviour than is traditional law (Greenleaf 1998).

The media has given considerable publicity to the risks of conducting cyberspace transactions, and there is considerable evidence that consumer participation is being subdued by the uncertainties involved.

4.3 Issues in Electronic Publishing

Electronic publishing inherits the difficulties that are common to all applications of electronic commerce. To those are added a range of additional concerns that arise from the central role of information not just in the economy, but also in the processes of society as a whole. Beyond mere electronic publishing, the current and near-future phases of cross-media publishing and interactive 'publishing' raise yet more issues.

(a) The Risk of Appropriation of Works

Traditional publishing houses are very wary about the security of their intellectual property (IP). The costs of replication are negligible, and little or no trail is left by an infringer. Hence they fear that reticulation of 'bootleg' copies by third parties will deny them revenue that they, particularly as IP-owners in their own right, but also as agents for IP-owners, believe they would otherwise achieve. In this climate of nervousness, authors are advised to be very wary about losing control over their property.

On the other hand, some authors have found electronic publication on the Internet to be a valuable means of achieving the kind of fame needed to drive sales of conventional books. An example that is especially appealing (because it is self-referential) is Howard Rheingold's 'The Virtual Community' (1993). Whether the Internet offers the prospect to create enough sales of enough books to support conventional publishers as well as authors is an open question. Many people have expressed doubt as to whether many writers can establish themselves as brandnames in the electronic marketplace, most recently Kleiner (1998).

An alternative economics was suggested in (Clarke (1994a), and is evident in some aspects of day-to-day operations of the Internet. Some authors are successful in making portions of works, and even entire works, available gratis over the Internet; yet still achieving a sufficient revenue-flow from related or adjacent activities, including advertising and sponsorships, as well as the more mainstream opportunities of speaking tours and consultancies.

In fact, this 'new' economics of publishing is not really very new. Only a miniscule proportion of authors earn enough from authorship to survive, let alone prosper. Vast publishing empires, indeed whole value chains of intermediaries, are supported by the revenues of multiple authors, but few of the originators get rich. In short, most authors have long been depending on multiple sources of revenue, and will have less difficulty weaning themselves off book royalties than the hubs and spokes of publishing chains will have finding alternative sources of revenue to support their operations.

Publishers may find it an increasingly difficult battle to sustain their hold on authors, on copyright transfer as a condition of publication, and on journal editors and their referees and advisory boards. It may transpire that the impediments to electronic publishing are much less the risks to authors than the threats to powerful organisations in the publishing value-chain.

(b) Content Discovery

Discovering what information exists, and where it is to be found has always been a challenge. Techniques have been developed and articulated, and an infrastructure and professions have grown up around them, which enable skilled researchers to navigate around physical collections, and around the catalogues that document them.

The difficulty that electronic publishing creates is that the cost-threshhold of performing the functions of publishing is being dramatically lowered, and the publication process as a whole is being democratised, without the opportunity for replacements to emerge for the infrastructure of libraries and catalogues, and for the professions of librarianship, cataloguing and archival.

Based, as electronic publishing is, on automated tools, the hope appears to be that some combination of the following will cope with the quickly widening chasm:

(c) Content Quality and Availability

The publishing industry value chain incorporates a series of filters, which have acted as assurers of format quality, presentation quality, and (with qualifications) content quality. Self-publishing and other forms of disintermediation tend to remove those filters.

On the other hand, at least in the more academic market segments, the primary quality contribution of the publishing industry value-chain has been in format and presentation. Content quality assurance has been largely performed outside the paid sector, and there is no reason to expect that peer-review and honorary editorship will be undermined by the disappearance of, or substantial change in the operations of, journal and text-book publishers.

A further difficulty arises from the malleability of content in electronic form. It is not only subject to appropriation by others; but the 'original' is also modifiable by whoever possesses or has direct access to it. Sustaining the long-standing and useful concepts of editions and versions will be difficult.

In addition to the question of quality of content, there is concern about the ongoing availability of resources. The functions of resource duplication, resource retention, and resource archival have been performed through the production of many copies, the storage of a proportion of them in private and public collections, and compulsory deposit in National and State Libraries. Serious difficulties exist in ensuring that electronically publisher works are subject to comparable protections.

(d) Enforcing Limitations on Usage

The freedoms of people to originate, to publish, to experience and to copy works of various kinds are subject to a variety of legal limitations. Electronic publishing has changed the patterns of all of these activities. In doing so, it has drawn into question not only the enforceability of existing laws, but also the appropriateness of those laws in the new context. Considerable confusion and inconsistency is evident in the reactions of governments (Hughes 1997).

The following sub-sections provide brief treatments of several of these legal limitations. Further information is to be found in (Standen et al. (1997).

* Copyright

As is made clear in Dempsey (1996), works expressed in electronic form are by and large subject to much the same constraints as are works in conventional forms.

On the other hand, even the photocopying machine created some significant new capabilities, resulted in breaches of copyright, and led to a new balance being found. It is only reasonable to expect that the Internet and services such as the World Wide Web will have an even more profound effect.

Publishers have been more exposed than authors to the risk of actions for infringement of copyright, because they generally have significantly greater assets. As a result, they have tended to impose much higher standards of care than self-publishing authors. It is therefore unsurprising that disintermediation is resulting in a higher incidence of electronic publications breaching copyright in prior works. The inverse of this problem is that many originators are unaware of the measures that they need to take in order to protect their own copyright.

* Confidentiality and Trade Secrets

The law of confidence imposes responsibilities on a recipient of information, if it was communicated with an expectation that care would be taken with it. It applies especially to particular relationships (such as doctor-patient and priest-confessant), but also more generally. Internet technologies make it very simple to accidentally breach confidence. Although the body of law originally developed in the context of personal relationships, disclosure of 'commercial in confidence' information can be much more expensive for the person or organisation that makes the mistake.

The law of trade secrets also imposes responsibilities on individuals and organisations that are in possession of valuable information. In both cases, the patterns of electronic publishing increase the likelihood of breaches.

* Negligence, Negligent Misstatement, and Misleading or Deceptive Conduct

Negligence is the failure to fulfil a duty of care to some natural or legal person (Clarke 1996g). Trade practices law may impose strict liability for misleading or deceptive conduct (Clarke 1996g). Once again, self-publication tends to lack the filtering measures needed to protect against these risks.

* Contempt of Court

Contempt is conduct likely to prejudice a fair criminal or civil trial. In this case as well, author-published electronic works are more likely to fall foul of the law than are professionally published works. Several celebrated instances have occurred, often involving trans-jurisdictional questions. See Platford (1996).

* Defamation

Defamation is a statement that purports to be a fact about a natural person, which is published, and which affects that person's reputation. In general, the law relating to defamation applies as much to electronic publications as it does to works in any other form (Clarke 1996g). Author-conducted electronic publishing commonly evidences a lack of appreciation of defamation law, and can appear downright cavalier in comparison with the work of the professional publishing industry. A more substantial analysis is provided in Platford (1996).

Apart from the harm that can be done to reputations, the risk exists that individuals and organisations that are readily located in geographical (and hence jurisdictional) space may be subject to a spate of civil actions (both warranted and fashion-driven). Moreover, litigants may indulge in 'jurisdiction-shopping', i.e. the selection of the jurisdiction whose laws offer the greatest scope for them to win their case). This could have a consequential chilling effect on electronic publishing generally.

* Censorship Laws

Content may be subject to censorship on many different grounds. In some countries, substantial constraints are imposed on freedom of speech in relation to political, religious, or racial topics. Many countries ban instruction in, and incitement to, violence. In virtually all jurisdictions, bans apply to sexually explicit material of various kinds, although the threshholds vary enormously. For an outline of Australian censorship law, see CAUDIT (1997). A more careful, lawyerly analysis is at Scott (1997).

Electronically published materials are made available in one jurisdiction, but in such a manner that they are very widely accessible. This creates great difficulties for countries with relatively restrictive censorship laws, whose populace can readily gain access to banned materials. Regimes like those of the People's Republic of China, Vietnam and Burma may succeed in their efforts to hamper access; whereas societies that are socially restrictive but economically open, such as Singapore, face much greater challenges. The trans-jurisdictional nature of the Internet makes the Internet an attractive publication mechanism for authors and publishers who are actively seeking to overcome censorship laws.

On the one hand, the risk exists of cultural interference and the breakdown of cultural integrity. On the other hand, there is a fear that individuals and organisations may be pursued and suppressed because their publications are perceived to offend the interests of a jurisdiction remote from the place of publication.

Moreover, the governments even of countries with strong democratic traditions are being tempted into excessive statutory reactions. The U.S. Supreme Court denied the constitutional validity of the Communications Decency Act CDA 1995; and it appears likely that the Child Online Protection Act 1998 (aka CDA II) may suffer a similar fate.

* Netethiquette

Finally, although it is of far less economic significance than the weighty responsibilities imposed by the laws mentioned in the previous sub-sections, considerable risk also exists of inappropriate electronic publishing behaviour harming individuals. A compendium of arguably dysfunctional net-behaviour is at Clarke (1995b).

(e) Equity of Access

Considerable risk exists that access to the information infrastructure, and hence to electronic publications, will not be available on an equitable basis. Access may be constrained because of:

Linked to the question of equitability of access is the question of service pricing. Telstra is, as always, seeking to avoid upgrading of Universal Service Obligations, and to impose high costs on its emergent competitors. In doing so, it has the support of the Australian Communications Authority. Realistic pricing of ISDN, cable and other high-bandwidth connections still appears to be a long way off in Australia, to the serious detriment of the country's performance as a leading information economy and information society.

The question of access to the information infrastructure is discussed in Clarke (1994c).

(f) Taking the 'Public' Out of 'Publication'

From the public policy perspective, perhaps the most frightening of all of the issues is the possibility that large corporations may be successful in their endeavours to compromise the accessibility of information in favour of the maintenance of monopoly spaces, and the creation of new ones.

These endeavours are proceeding on two fronts. One is the exploitation of cryptographic technology to protect content. Key players include Xerox, IBM (with its Cryptolope product) and InterTrust (with its DigiBox technology). In parallel with that strand, the law is being enlisted to protect corporations' interests. On 28 October 1998, the U.S. Digital Millennium Copyright Act was signed into law, with the purpose of rendering illegal the act of breaking through encryption technologies that protect intellectual property. "What we are worried about here is that we have for the first time a prohibition on simply accessing information," said Adam Eisgrau of the American Library Association. "In the past, the law has punished you on how you used that information".

The effect could be the decline of publication in the sense of implicit licensing under copyright, and the substitution of contracts between publisher and reader. This would inevitably be subject to highly restrictive terms, because the publisher is by definition a monopoly supplier. Such a development would represent a serious threat to the open information flows on which dynamic economies and democratic societies are based.

5. Electronic Communities

A significant proportion of the issues that have been identified in this paper reflect poor understanding by sponsors of electronic commerce and electronic publishers of the nature of people to whom they are trying to sell.

In a series of papers, I've argued not just that cyberculture needs to be understood, but that electronic community has primacy over electronic commerce. I don't mean that in any moral sense (although that's worth discussing in its own right), but rather as a matter of sheer practicality. Clarke (1998f) draws the argument together.

Electronic commerce and electronic publishing will not overcome their slow adoption rates until and unless the design of schemes reflects a deep appreciation of cyberculture. At the end of 1998, there is still disappointingly little evidence of maturation among entrepreneurs.

6. Conclusions

Electronic commerce and electronic publishing are revolutionary. They consequently bring raise a wide range of important issues, which this paper has set out to identify, describe and categorise.

Some of these issues are primarily relevant during the present lull while electronic commerce awaits breakthrough and becomes a mainstream way of doing business. Others among these issues will become much more relevant once that breakthrough has occurred.

One huge risk that we all have to manage is that 'big business' will be successful in buying the support of governments, and will thereby subvert the architecture of the Internet sufficiently to deny its inherent democratic shape, or sideline it sufficiently that broadcast-mode cable-TV models can regain the ascendancy. This is a risk to information society, in that it would deny the democratising tendencies of participative communications. It is also a huge risk to the information economy, because it would preclude the joint creativity on which performance in the twenty-first century world will depend.


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Rheingold H. (1993) 'The Virtual Community: Homesteading on the Electronic Frontier' Addison-Wesley, Reading MA, 1993

Saffo P. (1998) 'Disinteremediation: Longer, Not Shorter, Value Chains Are Coming', Institute for the Future, Menlo Park CA, undated version at

Scott B. (1997) 'Censoring the Internet - The Application of Existing Censorship Legislation to the Internet', Gilbert & Tobin, at

Standen D., Hughes T., Pollard S. & Scott B. (1997) 'Internet Compliance Manual', Gilbert & Tobin, at

Thornberry K. (1998) 'Web search engines get personal: `Start pages' deliver info to Internet users', Business Courier, at

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The content and infrastructure for these community service pages are provided by Roger Clarke through his consultancy company, Xamax.

From the site's beginnings in August 1994 until February 2009, the infrastructure was provided by the Australian National University. During that time, the site accumulated close to 30 million hits. It passed 65 million in early 2021.

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