Over the past two decades, various individuals and organisations have offered differing solutions for governing the main actors of the digital economy — each shaped by their own approach, judgement, or interests.
These were proposed within an ecosystem that, welcomed by investors and the educated public, grew larger by the day — yet for several clear reasons its growth always lagged behind the problems forming around it.
A. The absence of clear, comprehensive law
The executive bylaw of the Note to Article 87 of the Guild System Act is the main legal definition of internet businesses; regrettably, with a rudimentary and non-technical view, it treats them as a guild unit and overlooks their obvious distinctions. Newer versions from the Ministry handed much of the regulation to traditional unions now also issuing electronic permits.
The newer versions of this bylaw issued by the Ministry of Industry, Mine and Trade (the eighth version) contain considerably more problems.
The most significant flaw in this bylaw is its delegation of much of the regulation of businesses to traditional unions, which must now also issue electronic permits.
B. The state’s bundled view
The state wrongly imagines the business ecosystem as a single (political, economic, cultural) bundle. Restrictions have always been imposed negatively, while efforts to provide alternatives proved weak — pushing informal traders toward platforms that recognise private dealing, which has become a large opaque pole and a venue for crime.
Yet restrictions have consistently been imposed on the formal ecosystem through prohibitions, while the relevant agencies’ efforts to offer alternatives have had little or no effect.
This harms internet businesses by forcing them to implement difficult and costly protocols—censorship, identity verification, legal documentation confirming the legitimacy of goods, anti-money-laundering and anti-smuggling rules, and similar requirements—which increase operating costs.
This approach and the resulting legislation have led internet traders to use platforms that recognise the private nature of transactions. In other words, buyers and sellers consider the risk of trusting each other lower than the risk of trusting the rules. This relatively large, opaque group has now become a major centre of activity, and a place where various crimes occur.
C. Forcing the ecosystem into the guild template
To temporarily treat problems, bodies were founded whose function in this particular kind of business had never been tested. Three reference organisations appeared, in order:
- The Computer Guild Organisation
- The Employers’ Guild Association of virtual businesses
- The National Union of virtual businesses
The establishment of other organisations, particularly associations under the Chamber of Commerce, is commendable. Yet the stark reality today is that none of these bodies has been able to play an effective and lasting role in solving problems or helping shape legislation.
Reflecting on the names “Guild Association” and “Computer Guild Organisation” reveals the word “guild” at the centre of the legislator’s perspective. The union, too, is inherently a guild institution, established under the Chamber of Guilds and fully responsible for implementing its rules.
None of these bodies played an effective, lasting role in solving problems or helping legislation. The (4 + 1) years of the National Union evidence the structural inability of this traditional system, whose executive core is briefly:
- Five (or seven) elected board members meeting weekly
- Five three-person commissions: training, complaints, inspection, dispute resolution, technical
- Commissions meet at least monthly, deciding by majority
- In traditional unions the head holds most power and makes most decisions
Clearly, financial and executive management of an ecosystem this large cannot be handled by such a structure. After more than ten years, treating these businesses as a “guild” has caused irreparable harm. By the spirit of the law (notably the Article 44 Act of 2021), guild businesses initially need only a union permit, whereas non-guild businesses must obtain legal permits beforehand — yet internet businesses are still forced through a guild process designed for shops.
Examining the definitions of guild and non-guild businesses and the spirit of the law—particularly the Act on the Implementation of the General Policies of Article 44, approved on 15 Bahman 1399—suggests that guild businesses initially need only a union permit, while non-guild businesses must obtain statutory permits before operating, as in healthcare, legal practice and tourism.
For internet businesses, the first step is obtaining the trust mark from the Ministry of Industry, Mine and Trade, apparently only to establish identity and eligibility. The second is obtaining a business licence from the National Union, under requirements originally designed for shops and stores. It is unclear why no steps have yet been taken to recognise these businesses as non-guild activities.
Had it been accepted practice for practitioners to propose solutions and then discuss their implementation and improvement, we would now have a mature organisation worthy of our business, instead of clumsy interventions and hidden lobbying.
The solution: a new institution
In my view the only way out is to abandon the “guild” view and, in the long run, create a new body (proposed names: “Chamber of Digital Economy” or “Chamber of Internet Businesses”). Its undeniable features:
- Alignment of public and private stakeholders
- Private ownership and management (like the Chamber of Commerce)
- Funding by member businesses, for independent decisions
- Mandatory technical advisory input into legislation
- Valuing members by technological assets and digital knowledge
- Commitment to cover and support all lawful businesses
- Authoring a legal encyclopaedia of e-commerce
- Transparency and fairness in resource distribution
- Equal access to facilities across the country
- Support for all NGOs advancing internet business
These are only headings, each requiring hours of discussion with knowledgeable and experienced specialists. Yet it is fair to say that none of these values is a priority for the current guild institutions.
What you read is a summary of a fuller proposal, drawn from my time chairing the Employers’ Guild Association of internet businesses and serving on the board of the National Union.
I humbly welcome critique, suggestions, and any collaboration toward a more comprehensive model.
— Hamidreza Etedalmehr · 1401/2022