FRAUD IN ELECTRONIC COMMERCE UNDER THE DIGITALISATION OF ECONOMIC RELATIONS: CRIMINAL LAW CHALLENGES AND ECONOMIC IMPLICATIONS FOR DIGITAL MARKETS

Abstract

The rapid digitalisation of economic relations and the growth of e-commerce have fundamentally changed business models, financial transactions and consumer behaviour. However, alongside these positive developments, digital markets have also become increasingly vulnerable to sophisticated fraud exploiting information technologies, online payment systems, virtual assets and cross-border electronic communications. Consequently, fraud in electronic commerce has evolved from being merely a criminal law issue to becoming a significant factor affecting the economic security, investment attractiveness and sustainable development of digital markets. The purpose of this study is twofold: first, to identify the main issues surrounding the criminal law qualification of fraud in electronic commerce in the context of digital transformation; and second, to evaluate the economic implications of these issues for the development of the digital market. The study takes a multidisciplinary approach, combining doctrinal legal analysis with the principles of law and economics. A comparative analysis of legal, formal-legal, institutional and case law is employed to examine Ukrainian criminal legislation, judicial practice and contemporary scientific approaches to cyber fraud. The research also considers the economic consequences of legal uncertainty for electronic commerce, such as increased transaction costs, reduced consumer confidence, higher compliance expenditure and obstacles to the development of the digital market. The findings show that the lack of a comprehensive legal definition of cyber fraud, inconsistent judicial interpretations and outdated legislative terminology make it much more difficult to qualify fraudulent conduct in electronic commerce as a criminal offence. Particular difficulties arise in distinguishing between fraud and civil law disputes, unauthorised electronic transactions, theft involving payment instruments and offences relating to virtual assets. The research also shows that legal uncertainty has a negative impact on the functioning of digital markets, increasing business risks, discouraging investment and undermining public trust in online commercial transactions. The study concludes that improving criminal legislation should be regarded not only as a means of strengthening the criminal justice system, but also as an important tool for promoting economic security and fostering the growth of a sustainable digital market. Legislative modernisation, harmonisation of judicial practice, clearer qualification criteria, and improved international co-operation in digital evidence collection would contribute to reducing transaction costs, strengthening legal certainty, and increasing the competitiveness of the digital economy.