Classroom Companion: Business

Definition 17.2 Service-Level Agreement
A service-level agreement (SLA) is a contract that exists between a consumer and a 
provider of a digital service; see 
.
Fig. 
17.3
. The SLA describes certain contractual 
terms related to the delivered service, e.g., price, delivery precision, and responsibility.
17.3 · E-Commerce Markets

---

248
17
supplier and a consumer as e-commerce, there must be some sort of financial activ-
ity between them. The exchange of goods and services without any financial activ-
ity is not regarded as e-commerce even though the trade is done in a digital market. 
One example is the use of Facebook. The use of Facebook is free of charge for the 
user, and, therefore, there is no financial activity between the user and Facebook. 
The access to and use of Facebook is not e-commerce. On the other hand, Facebook 
sells advertisement space to retailers and other companies as a part of their busi-
ness model. This is, indeed, e-commerce in which Facebook is the supplier.
Definition 17.3 E-Commerce
E-commerce is the online trading of tangible goods and digital goods and services 
with some sort of financial activity.
One particular form of e-commerce is mobile commerce, or m-commerce, where all 
interactions between retailer and customer (viewing, ordering, shopping, and pay-
ment) take place via smartphone applications. The term was coined by Kevin 
Duffey in 1997. He defined m-commerce as “the delivery of electronic commerce 
capabilities directly into the consumer’s hand, anywhere, via wireless technology” 
(Global Mobile Commerce Forum, 
1997
). The use of smartphones for shopping 
and payment services is now taking over most of the e-commerce market because 
Online trading
Digital goods
and services
Tangible goods and
non-digital services
Internet
Transport
Consumer
. Fig. 17.4 E-commerce trading. (Authors’ own figure)