New E-Commerce Rules Pushed

Feb. 14, 2000

Microsoft Corp. and other large software manufacturers are turning up the heat on state lawmakers, seeking passage of legislation that would impose new rules on e-commerce, stripping away several basic consumer protections.

The Virginia House of Delegates votes today on the Uniform Computer Information Transaction Act (UCITA), which has the enthusiastic backing of Gov. James Gilmore, a Republican who also chairs a federal commission on e-commerce. Maryland and Illinois are also actively considering the measure. It's expected to be introduced in California and several other states with heavy concentrations of high-tech industries later this year.

Among its other provisions, the bill would allow software companies to reach into consumers' computers via the Internet and "repossess" software or other electronic data if the purchaser falls behind in paying, installs the program on additional computers or otherwise violates the license terms.

Basically, the law mirrors the fine print in the software agreements that are typically buried somewhere in the shrink wrap or that the consumer sees only fleetingly before pressing the "I agree" button when downloading software.

Opponents say the measure is unnecessary and argue that existing contract and copyright laws provide adequate protection both for corporations and consumers. Two dozen state attorneys general have signed a letter expressing "serious concern" about the measure.

Lobbyists for Microsoft, AOL and other e-commerce firms have descended on state lawmakers to rally support for the measure. Lawmakers in California, Virginia and other states where e-commerce is creating thousands of jobs and millions of dollars in tax revenue aren't likely to turn a deaf ear to the industry lobbyists, observers noted.

Sun Microsystems is one of the few large e-commerce companies opposing the measure. It says existing laws are adequate.

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