01 June 1999

Following a damning report from the Commons Trade & Industry Select Committee, the Government has backed down from legislation requiring UK internet traders to lodge with a third party the encryption keys used to protect data confidentiality in internet transactions. The so-called 'trusted third parties' [the Post Office, for example] would have held keys to the encryption codes in escrow, so that these were accessible on demand to the police and intelligence services. Similar moves have already been howled down in the USA and France as useless and impractical. Said select committee chairman Martin O'Neill [Labour, Ochil]: 'The Government must have a much more permissive approach if it wants to encourage the growth of e-commerce.' Recourse to compulsion would, opined the Committee, be 'a damaging and embarrassing failure', and the plan to licence trusted third parties 'was not fit to be written into law'. The DTI confirmed it has abandoned the compulsory approach but would still like to see a voluntary registration scheme. The committee opposed this too!