Select Committee on European Union Minutes of Evidence


Memorandum by Dr Michael I Shamos

(1)  WHAT NEEDS TO BE DONE TO CREATE CONFIDENCE AND TO STIMULATE E-COMMERCE?

  The major legislative initiatives that are recognized as having stimulated the growth of e-commerce in the U.S. are:

    (i)  the deregulation of the telecommunications industry, which allowed free market forces to deploy capital into the infrastructure of fiber optic/long distance service, switching services, and network development.

    (ii)  Internet Tax Freedom Act (1998), which provides a moratorium from 1 October 1998-30 September 2001 on:

      —  New taxes on Internet access

      —  Multiple or discriminatory taxes on e-commerce

      —  Exception for material "harmful to minors"

    (iii)  the AntiCybersquatting Consumer Protection Act, 15 U.S.C. $1125(d) (29 November 1999), which:

      —  Prohibits bad faith intent to profit from cybersquatting on Internet domain names

          Creates in rem jurisdiction, allowing action against a foreign cybersquatter or a cybersquatter who has provided fictitious contact information to be brought where the registrar of the registry is located

    (v)  The Computer Fraud and Abuse Act (1986), which:

      —  Prohibits certain acts affecting interstate commerce. 18 U.S.C. §1030, such as:

      —  Accessing a protected computer without authorization to obtain anything of value

      —  Accessing or knowingly transmitting code that intentionally or recklessly causes damage

      —  Intentional trafficking in passwords

      —  Extortion by threat to a computer

    (vi)  The Electronic Communications Privacy Act

      —  18 U.S.C. §1367, 2232, 2510, 2701, 3117, 3121

      —  To make unlawful the interception of computer information or communications

      —  Defines "oral communication" as

    "any oral communication uttered by a person exhibiting an expectation that such communication is not subject to interception under circumstances justifying such expectation"

      —  The law prohibits:

    interception of wire, oral, or electronic communication

    use or disclosure of intercepted communication

    (vii)  The Digital Millennium Copyright Act (1998)

      —  Provides for:

    Technological protection

    Illegality of devices to circumvent copyright protection

      —  And limits liability of Internet Service Providers for copyright infringement in their business role:

    Transitory communications

    System caching

      —  Storage at the direction of users

      —  Information location tools (search engines, hyperlinks)

  The major initiative from the United Nations that has occurred:

    —  UNCITRAL Model Law of Electronic Commerce

    —  (United Nations Commission on International Trade Law, adopted 1998) which allows:

      —  Contract formation by "data messages"

      —  "Data messages" as enforceable, admissible evidence

      —  Digital signatures to be recognised.

(2)  DOES THE EUROPEAN COMMISSION'S DRAFT ACTION PLAN "EEUROPE: AN INFORMATION SOCIETY FOR ALL" OFFER A REALISTIC MEANS OF PROMOTING E-COMMERCE IN THE EU?

    (viii)  We do not have knowledge of this Plan, and thus cannot comment.

(3)  WILL CODES OF CONDUCT AND CO-REGULATION PROVIDE SUFFICIENT PROTECTION? IS THERE A CASE FOR INTERVENTION BY NATIONAL GOVERNMENTS AND THE EU?

    (ix)  The above evidence from the US Congress legislative actions suggests that some regulation is needed. A single EU initiative is suggested, rather than several different National initiatives.

(4)  DO THE INSTITUTIONS OF NATIONAL GOVERNMENTS, ON THE ONE HAND, AND THE EUROPEAN COMMISSION, THE COUNCIL OF MINISTERS AND THE EUROPEAN PARLIAMENT, ON THE OTHER, FUNCTION WITH SUFFICIENT FLEXIBLITY AND COHERENCE TO PROMOTE THE EU'S OBJECTIVES IN THE FIELD OF E-COMMERCE?

    (x)  We do not have knowledge of their actions, and thus cannot comment.

(5)  SHOULD EXISTING EU INSTITUTIONS' INTERNAL STRUCTURES BE CHANGED, OR NEW ONES CREATED, TO IMPROVE POLICY DEVELOPMENT AND CO-ORDINATION?

    (xi)  A single initiative modelled after the US actions would put the EU e-commerce on par with the US market.

(6)  HOW CAN STRUCTURAL CHANGE BE BROUGHT ABOUT FAST ENOUGH TO ACCOMMODATE TO THE GROWTH OF E-COMMERCE?

    (xii)  We do not have knowledge of the structures, and thus cannot comment.

March 2000


 
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