The Prime Minister recently stated that "revenue from e-commerce is expected to top £10 billion in the UK next year, a threefold increase on this year". However, concerns remain about the security of e-commerce transactions. One of the expressed aims of the Bill is to "create a legal framework so that people can be sure about the origin and integrity of communications", thereby securing transactions and ensuring the e-commerce boom continues unhampered.

New network

On October 28, Patricia Hewitt, the e-commerce Minister, announced a new on-line network of ministers responsible for e-commerce across 15 Government departments. Plans were also announced to provide faster and more convenient access to information services, including the internet, without having to plug into an established computer network.

Promoting e-commerce
The draft Bill was designed to promote e-commerce by clarifying the status of electronic "signatures" – the electronic equivalent of a manual signature – and by removing legal barriers so the option of communicating electronically can be offered instead of the use of paper. It was also intended to build confidence in the provision of "cryptography" services.

Cryptography is the science of codes and can be used as the basis of an electronic signature, or to keep electronic data confidential.

Encryption is the process of turning normal text into a series of letters and/or numbers which can only be decoded by someone who has the correct password or key.

Encryption is used to prevent others from reading confidential commercial data. Cryptography Service Providers will offer services such as electronic signatures and encryption. Once registered, (registration is done on a voluntary basis), a cryptography service provider will be awarded a "kite mark", indicating that they are licensed.

Electronic signatures
An electronic signature can be used to give the recipient confirmation that a communication comes from the purported sender and that it has not been tampered with.

The Bill does not go so far as to introduce a rebuttable presumption that an electronic signature was what it claimed to be – among other reasons – because the burden of proof could be shifted, e.g. to consumers to prove that they had not signed a document.

Under the Bill (Clause 7), all types of electronic signatures will be admissible in court. However, it will be left to the courts to determine whether an electronic signature has been correctly used and what weight should be attributed to it.

Part III of the Bill as originally drafted could have required disclosure of "keys" necessary to make lawfully obtained information intelligible – such as a "decryption" key – by giving a notice of disclosure. Failure to comply was to be punishable with a fine and/or two years' imprisonment.

This section of the Bill has been jettisoned, after concerns were raised that it contravened the European Convention on Human Rights.

That measure will now be placed in Home Office legislation – the Regulation of Investigatory Powers Bill – though it remains to be seen whether the provisions are to be watered down.

E-commerce fact-file
- A recent report predicts that 65% of all European businesses, representing 5.4 million individual businesses, will have internet access by 2004
- By 2002, conducting business on-line will save companies around the world an estimated US$1.25 trillion. The saving in 1998 was US$17.6 billion
- Around 100 million people worldwide currently use the internet. Estimates suggest that by the end of this year this could rise to a quarter of a billion users
- There are 10,116,882 commercial "domain names" registered worldwide
- Domain registrations increased 118% from 1997-1999
- 7.3 billion transactional e-mails are sent each day in the US alone
- A recent survey of 700 UK businesses which have internet access found that one-third (36 per cent) now have their own web site
- More than half of companies – 58 per cent – which do not currently have a web site believe that they will set one up within the next 12 months
- More than one in three companies – 35 per cent – say having a web site has increased revenue, and 22% say that it has reduced costs
- Two-thirds (67%) of respondents believe that a perceived lack of security is holding back the expansion of internet commerce.

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