The Senate

S. 761, the “Millennium Digital Commerce Act“, is the Senate vehicle for electronic signature legislation. The sponsor of S. 761 is Sen. Abraham (R-MI) who, along with Sens. Leahy (D-VT) and Wyden (D-OR) is spearheading the effort to move digital signature legislation in the Senate. (For Sen. Abraham’s statement of introduction, please click here.) The Senate committee on Commerce held a hearing on S. 761 in May of 1999 at which several industry witnesses testified, one of whom was Harris N. Miller, President of the Information Technology Association of America (ITAA). Mr. Miller testified strongly in support of the Millennium Digital Commerce Act saying that digital signatures will encourage e-commerce by creating a “consistent legal framework” across America. (Please go to http://www.itaa.org/govt/cong/c19990527.htm for the text of Mr. Miller’s testimony.)

S. 761 was reported out of the Senate committee on Commerce in July, 1999 and was placed on the Senate Legislative Calendar. While digital signature legislation was holding court over in the House, Sens. Abraham, Leahy and Wyden were instrumental in crafting the Democratic alternative to H.R. 1714. The current Senate version of digital signature legislation reflects the language of the Democratic substitute that was defeated in the House. (The text of the Democratic substitute can be found in the Congressional Record of November 9, 1999 on pages H11749 – H11750. The bill is on hold right now, but is assured an easy passage once it goes to the floor.

Sen. Abraham’s statement of introduction to S. 761

Mr. Miller’s testimony in support of the Millennium Digital Commerce Act

Full legislative history of the electronic signature Directive and summary of all action

The European Union

Across the pond, the European Union has also been developing an electronic signature Directive that will affect the 15 member states of the European Union. The draft Directive was published in the Official Journal of the European Union in October 1998 (Commission Document COM (98) 0297). The aim of the Directive is to establish uniformity in electronic signature laws among the European Union member states and to delineate the role of the service providers and the certification service providers (csp’s). Originally, the members were split over the issue of whether the legislation should be technology neutral or tied to a specific type of technology (mandatory).

The draft Directive received preliminary approval in January 1999 from the European Parliament Deputies at its first reading. The Telecommunications Council agreed to the draft in April 1999, at which point it was technology neutral. In June of 1999, the European Council of Ministers unanimously adopted a “common position” on the Directive. The draft was then sent to the European Parliament for a second reading.

In October the European Parliament Deputies approved the Directive with amendments intended to clarify its scope. (For a summary of the Parliament’s amendments, please go to http://www.europarl.eu.int/dg3/sdp/pointses/en/p991025s.htm#3 .) The Council of Ministers may accept the Parliament’s modifications and sign it into law. The member states would then undertake to conform national policy to the new Directive. However, if the Council of Ministers rejects the amendments, the Ministers and the Parliament must conference (or enter into “conciliation”). The general consensus is that the Directive will be adopted with amendments and will be effective by the year 2000. (For a full legislative history of the electronic signature Directive and summary of all actions, please go to: http://wwwdb.europarl.eu.int/oeil/oeil_ViewDNL.ProcedureView?lang=2&procid=1725 .)

The United States Response

The final form of the Directive has not been well received by the Administration. In testimony before the Senate committee on Commerce, Andrew Pincus, the General Counsel of the Department of Commerce, stated that the Directive is not “technology neutral” as it calls for specific technical standards for digital signatures. (The full text of his testimony can be accessed at http://www.ogc.doc.gov/ogc/legreg/testimon/106f/pincus1028.htm.) Although the Administration has expressed its displeasure with the Directive, it is unlikely that will sway the European Union from their technology specific stance.

As 1999 winds to a close, chances are that there will be electronic signature laws in place here and abroad for the new millennium. Although the U.S. and European approaches differ and may cause some friction, the common goal is to foster and encourage the growth of electronic commerce in a new global economy.