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E-commerce and belief-based business

Muhammad Abdul Mazid | November 09, 2019 00:00:00


E-commerce is no more a new fundamental business paradigm that nay go against the traditional business paradigm. It has emerged from convergence of several major information technologies and business practices.

The world business and commerce industry has been transformed into e-commerce since December 21, 1994, when the University of Illinois at Urbana-Champaign and Netscape Communications Corporation, in a joint press release, announced that they had reached an agreement that left Netscape free to market its products independent of the university, its collaborator. Less than six (06) months later, Netscape announced its first IPO ((initial public offering/ 5 million shares at $28 per share). From that moment, the way of trade, its communication and business changed, as the impact of the Internet on the business landscape could not be avoided by any cooperation, executives or governments.

The Organisation for Economic Cooperation and Development (OECD), thereafter, defined e-commerce as: "Business occurring over networks which use non-proprietary protocols that are established through an open standard setting process such as the Internet ... the term 'business' broadly means all activity that generates value both within a firm (internally) and with suppliers and customers (externally). In this sense, it would include internal networks (e.g., intranets) as well as networks that extend to a limited number of participants (e.g., extranets). Some of this activity may result in a monetary transaction and some will not".

The growth of e-commerce in the past few years has generated considerable diversity and complexity in its structure and applications. E-commerce refers to the use of information and communication technologies to network economic activities and processes, in order to reduce information-related to transaction costs to gain a strategic, information advantage.

From Islamic point of view, e-commerce has a similar definition akin to conventional commerce, but some rules and obligations must be aligned with Islamic principles and permissible by Islam. Holy Quran, in verse 10 of Suratul Jumah, states: ''And when the prayer is finished, then you disperse through the land, and seek the Bounty of God, and remember God much, that you will prosper''.

This verse clearly suggests that Allah allows His 'servants' to do any activities on earth as long as it does not contradict with Islamic principles.

In Islam, spiritual actions are not isolated from material (ritual and ordinary) ones, for all actions performed in obedience to the command of God are considered acts of virtue and half of religious duties including ecommerce.

In matters of rights of the seller (producer) and the buyer (consumer), which have been ascribed as cardinal point to be taken care of, classical Islamic jurist Ibn Nujaiym defined rights as ''the entitlement of a person to a thing and an exclusive assignment''. That is the basic ingredient of general concept of rights for the rights bearer.

Modern scholars have made advancement in several definitions for the concept of rights in various perspectives. Some of these definitions view rights from the perspective of Islamic laws, while others tend to emphasise the concept of interest.

To avoid engaging in technicalities, researchers have made a conclusion to define rights as ''an exclusive appropriation or power over something, or demand addressed to another party, which the Islamic laws [sic] has validated in order to realise a certain benefit''.

In e-commerce, examples of rights include right to privacy, consumer data protection, right to be secure in dealing with transactions, right to know details of the product, the producer's right to get information from the customer, and right to get payment, whenever the products are delivered.

In this context, one should take into consideration the principles that govern Islamic business ethics. As FR Faridi says, there are nine specific principles. Details of the first four that cover conduct of e-commerce are given below:

1. ADHERENCE TO CONTRACT: Islam has attached extraordinary importance to fulfillment of contracts and promises. A Muslim trader should be truthful, keep up his/her trusts, promises and contracts. In Islam, all the business contracts and dealings should be put in place in black and white manner as the Quran says: "O you believers! Fulfill your contracts." (Surah Mayida, verse 1)

2. FALSE ADVERTISING & MISREPRESENTATION: One of the most common unethical practices in modern business is deceiving customers by launching misleading advertisements and publicity campaigns. Islam strongly condemns all these practices and urges its followers to avoid them. The Quran states: ''And do not withhold from people the things that are their due and commit not evil in land with interest to spread disorder'' (Surah Hud; verse 85).

3. ACCURATE MEASUREMENT & WEIGHTS: Defrauding in weight is a very old type of exploitation. It was due to such fraud that the people of Shuaib were annihilated, according to the divine book. On ethical responsibility of business regarding weight and measurement, the Quran emphasises: ''Give full measure when you measure and weight with a balance that is straight...'' (Surah AlIsra; verse 35).

4. INTEREST AND UNLAWFUL TRADE: Islam declares the interest (Riba) as one of the root causes of some economic evils. Islam offers an interest-free business system based on its principles. There are quite a number of Quranic verses that confirm prohibition of Riba.

The rest are: (5) Hoarding and profiteering; (6) Destruction of surplus produce; (7) Fair recruitment practices; (8) Fair treatment of workers; And (9) Protection of environment.

Dr Muhammad Abdul Mazid is a former Secretary to the government and chairman at the

National Board of Revenue (NBR)

mazid.muhammad@gmail.com


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