01 April 1999

PRIME MINISTER Blair, home secretary Straw, and trade secretary Byers attended a high-powered break-fast meeting last month with twenty UK business leaders to discuss the thorny question of legislative safeguards for e-commerce. Following the meeting, the government announced it had dropped its insistence on mandatory encryption of software, designed to scramble data sent over telephone lines. The voluntary scheme would have licensed companies that design and sell encryption software, the keys to which would be sold to business users by so-called ‘trusted third parties’ such as the Post Office and the clearing banks. It would have given Internet transactions the same status in UK law as those governed by hard copy contracts - but the captains of industry were less than enthusiastic, arguing that the scheme would cost too much, slow the introduction of e-commerce, and lead to problems of security and breach of customer confidentiality. Senior executives conceded, however, that encryption of some kind is essential to safeguard e-commerce - especially the introduction of digital signatures. The Government plans to publish its e-commerce bill this Spring, having taken account of business views.