Office of the General Counsel; Laws or Regulations Posing Barriers to Electronic Commerce

AGENCY:

Department of Commerce.

ACTION:

Notice: Request for public comment on laws or regulations posing barriers to electronic commerce.

SUMMARY:

The Department of Commerce, on behalf of the Subgroup on Legal Barriers to Electronic Commerce (“Legal Barriers Subgroup”) of the U.S. Government Working Group on Electronic Commerce, requests public comments and suggestions concerning policies, laws or regulations that need to be adapted in order to eliminate barriers to and promote electronic commerce, electronic services, and electronic transactions.

DATES:

Comments are requested by March 17, 2000.

ADDRESSES:

Comments may be submitted via the Web at http://www.ecommerce. gov/ebarriers/respond. Alternatively, electronic submissions may be sent as documents attached to E-mail messages addressed to ebarriers@ita.doc.gov. Submissions made as E-mail attachments or submitted on floppy disks should be in WordPerfect, Microsoft Word or ASCII format. Diskettes should be labeled with the name of the party and the name and version of the word processing program used to create the document. Paper submissions may be mailed to the Subgroup on Legal Barriers to Electronic Commerce, U.S. Department of Commerce, 14th Street and Constitution Avenue, N.W., Room 2815, Washington D.C. 20230. If possible, paper submissions should include floppy disks in WordPerfect, Microsoft Word or ASCII format. Except for floppy disks with paper submissions, duplicate copies should not be submitted.

FOR FURTHER INFORMATION CONTACT:

Kenneth Clark, phone: 202-482-3843; E-mail kclark@doc.gov.

SUPPLEMENTARY INFORMATION:

Background

On November 29, 1999, President Clinton issued a Presidential Memorandum to the Heads of Executive Branch Departments and Agencies entitled “Facilitating the Growth of Electronic Commerce.” The President noted that the rapid growth of the Internet and its increasing use throughout the world for electronic commerce holds great promise for American consumers and for the Nation. Consumers will have significantly greater choice and convenience and will benefit from enhanced competition for their business. To realize this promise, the President said, it is essential that government facilitate “not only retail activity, which has increased substantially, but also the movement to the online environment of other categories of transactions.”

The President noted that laws and regulations developed before the advent of electronic commerce may significantly impede consumers and businesses in conducting various kinds of transactions electronically. These impediments can involve requirements that particular types of transactions be conducted on paper or in person, or that records be maintained or provided in written form. They may also include regulatory, statutory or licensing requirements, or technical standards and other policies, that hinder electronic commerce or otherwise require business or transactions to be conducted in a way that discriminates against the online environment.

Such requirements and policies must therefore be reviewed and, where appropriate, adapted to the new electronic environment. But the President noted that in making these adaptations, it is essential to ensure that electronic commerce is as safe for consumers as traditional forms of commerce.

To implement these objectives, the President mandated that the United States Government Working Group on Electronic Commerce: (1) Identify laws and regulations that impose barriers to the growth of electronic commerce, and (2) recommend how these laws and regulations should be revised to facilitate the development of electronic commerce, while ensuring that protection of the public interest (including consumer protection) is equivalent to that provided with respect to offline commerce. The President mandated that the Commerce Department lead a subgroup to implement this work, and the Subgroup on Legal Barriers to Electronic Commerce has been formed to carry out those responsibilities.

The President directed the Subgroup to invite the public to participate in this effort by identifying laws or regulations that may obstruct, hinder or discriminate against electronic commerce, including those that should be modified on a priority basis. The Subgroup was also charged with inviting public comment on how such laws and regulations could be adapted to the electronic environment while ensuring that public interest protections will be equivalent to those now provided in offline commerce. This Notice and Request for Comment implements those directives.

Scope of This Request

Areas of Focus for the Working Group

Electronic Transactions

These include business-to-business and consumer-to-business transfer of information, money, or other resources. (Note that transactions between government agencies and the public are excluded from this review because they are being addressed as to federal agencies pursuant to the Government Paperwork Elimination Act.)

Merchandise Sales

The Legal Barriers Subgroup is interested in all types of policy, legal and regulatory impediments to electronic commerce and invites comment on any that may be identified. Conducting business in the sale of goods on the Internet may involve a wide range of issues besides the actual transaction, from incorporation and notice requirements to warranty or liability policies. Respondents are invited to comment on such issues and to identify policies, laws or regulations that may impede the offering of goods for sale electronically. Comments are also requested concerning how such barriers could be removed while ensuring that equivalent consumer protections to those guaranteed in traditional commerce will apply to the sale of goods online.

Offering Services

Comment is also invited concerning the provision of professional or other services by electronic means. Such services differ from industry to industry, but may be dependent on certain statutory or regulatory frameworks. Respondents are invited to comment on whether these frameworks discriminate against the provision of services by electronic means or make electronic provision of services more difficult. Respondents are also invited to discuss how best to adapt these frameworks appropriately to the online environment.

Multiple Party Regulation

The Committee is especially interested in comments on regulations governing the relationship or exchange of information between different categories of private parties (e.g., between banks and students or insurance companies and doctors). Respondents are invited to comment on regulatory provisions that address communication between parties, whether these provisions impede electronic commerce due to requirements for written documentation or other actions that create a disincentive to electronic information transfer, and how such impediments could be removed while still protecting the public interest.

Independent Agencies Included Within the Scope of the Inquiry

This request invites comments concerning laws or regulations administered by any federal agency, as the President's Memorandum invites participation in the Working Group by independent agencies concerned with its work. Any comments concerning laws or regulations administered by independent agencies will be forwarded to those agencies for their consideration.

Areas of Law and Regulation Excluded

This request for comment focuses on domestic laws or regulations that may adversely affect electronic commerce (although the potential effects of such laws or regulations on cross-border commerce are relevant to this inquiry and may be included in any response). However, the Legal Barriers Subgroup will refrain from reviewing laws and regulations in areas where comprehensive activities are already underway to remove regulatory or legal barriers to electronic commerce. Areas excluded from this inquiry include the following:

(1) Treaties, international laws, conventions or agreements, or the laws of countries other than the United States.

(2) Tax laws or regulations.

(3) The following consumer protection regulations, which are subject to current rulemaking proceedings of the Board of Governors of the Federal Reserve: Regulation B, relating to the Equal Credit Opportunity Act; Regulation E, relating to the Electronic Fund Transfer Act; Regulation M, relating to the Consumer Leasing Act; Regulation Z, relating to the Truth in Lending Act; and Regulation DD, relating to the Truth in Savings Act.

(4) Issues being addressed pursuant to the Government Paperwork Elimination Act, which mandates steps to be taken by the Federal Government to remove barriers to electronic communications with and within the Federal government.

Note concerning State or local laws and regulations: Barriers to electronic commerce may arise simply from a lack of uniformity in policies, laws, standards or codes among different jurisdictions. Although we do not request comments about individual state or local laws or regulations, respondents may wish to identify general areas in which barriers to electronic commerce result from State or local policies, laws, or practices; or from differing State and federal policies, laws, licensing requirements, standards or other practices. Respondents also may wish to comment on whether increased coordination is needed between the Federal and State governments to avoid unnecessary impediments to electronic commerce.

Basic Questions for Public Comment

Comments on any issue within the scope of this inquiry are welcome. However, responses to the following specific questions would be most helpful to the Working Group.

1. Does any federal agency-administered law or regulation impose an impediment to the conduct by electronic means of commercial transactions between you or your firm, company or organization and any other non-government party or parties? (Be as specific as possible in citing or otherwise identifying the law or regulation.)

2. If so:

(a) What is the degree of the impediment? (For example, does it completely bar the transaction from occurring electronically, or does it make the transaction more difficult, expensive, or time-consuming without barring it altogether?)

(b) What is the nature of the impediment? (For example, is it a recordkeeping requirement, a “written notice” requirement, or some other type of requirement?)

(c) Can you provide information as to the costs that are associated with or result from the legal or regulatory impediment?

(d) What do you understand to be the reason for imposing the requirement that causes the impediment?

(e) Can you suggest alternative ways, other than through the requirement that causes the impediment, by which the agency could achieve the goal of the requirement? (Most helpful would be examples that work in other contexts.)

(f) Can you suggest ways in which the requirement can be modified to remove or reduce the impediment while continuing to provide consumer protections for electronic transactions that are equivalent to those that exist for offline transactions.

Additional Issues or Questions for Public Comment

3. Do federal laws or regulations in any particular field or area generally impose significant impediments to the conduct of commercial transactions by electronic means? If so, please indicate how they result in such impediments and provide any suggestions you may have to remove or reduce the impediments, while achieving the purposes of the laws or regulations and maintaining equivalent consumer protections.

4. Are there particular federal laws or regulations that should be modified on a priority basis because they currently inhibit electronic commerce that is otherwise ready to take place? In responding to this and other questions, you are urged to take into account cross-border transactions that are now likely to occur electronically.

5. Are there federal laws or regulations that should be clarified to facilitate electronic commerce by preserving important public interests in the area of online commerce such as consumer protection, civil rights or law enforcement?

6. Are there federal laws or regulations that constitute disproportionate or particular barriers to electronic commerce for small businesses? If so, are there changes or solutions you can suggest that would enable small businesses to engage more easily in electronic commerce?

7. To the extent that the adaption of laws or regulations to the electronic environment requires electronic notices or disclosures, can you offer specific suggestions as to formatting or other requirements for such notices or disclosures to ensure that they are conspicuous and will be received and understood?

8. From the standpoint of consumers, are there federal laws or regulations that have already been adapted to the electronic environment in a manner that has resulted in a lessening of consumer protections—including protections against fraud, or against over-reaching by unscrupulous or exploitative entities? If so, what is the degree of the harm involved, or the amount of cost imposed?

9. Are there federal laws or regulations that have already been adapted to the electronic environment in a manner that has resulted in a lessening of other public-interest protections, such as those involving health, safety or the environment?

10. Have you encountered areas in which barriers to electronic commerce result from: (a) Particular subject areas or types of State laws; (b) a lack of uniformity, or conflicts, among State laws; or (c) differing or conflicting State and federal laws?

11. Have you encountered impediments to electronic commerce that stem from licensing requirements, technical standards, codes, or other policies? If yes, what are they and how could they be removed?

12. Have you encountered impediments to electronic commerce that stem from a lack of uniformity in such requirements, standards, codes, or other policies among State or local governments or between them and the Federal Government?

Specificity of Responses and Comments

Comments and responses to the questions posed in this notice will be most helpful if they are specific in (1) identifying federal laws or regulations imposing impediments to electronic commerce, and (2) estimating costs associated with these impediments through reduced sales or business efficiency. The Working Group would appreciate receiving suggestions for modifying the law, regulation or policy to reduce or remove the impediments, or alternative ways (other than through the provision at issue) by which the agency could achieve the goal of the provision while maintaining consumer and public protections equivalent to those provided for transactions taking place by non-electronic means. Questions 1 and 2, above, provide an example of the degree of detail in responses that would be most helpful.

Publication

Comments will be published online at http://www.ecommerce.gov/ebarriers/review. Respondents should not submit materials that they do not desire to be made public.

Authority: Presidential Memorandum, “Facilitating the Growth of Electronic Commerce,” dated November 29, 1999.