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Congress eyes international e-commerce barriers


By Patrick Thibodeau

WASHINGTON, D.C. (IDG) -- A congressional subcommittee exploring barriers to digital commerce Tuesday received a laundry list of problems from some of its witnesses, ranging from the cost of Internet access in some countries to increased risk of litigation for U.S. companies engaged in e-commerce.

The promise of e-commerce is "contingent on coordinated and affirmative action on the part of the administration, Congress and industry making sure that forces of global protectionism and fragmentation don't take hold of digital trade," said Clifford Stearns, chairman of the subcommittee on Commerce, Trade and Consumer Protection. INFOCENTER
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But what may be the most pressing issue for the committee, and one that took up much of the hearing, is the impact of the ongoing Hague Convention negotiations over establishing a set of international rules for enforcing foreign judgments.

As it stands now, judgments by courts in other countries are recognized and enforced in the U.S. under state law, "but most of our trading partners do not usually grant the same treatment to U.S. judgments," said Jeffrey Kovar, a legal adviser at the U.S. State Department. "A successful convention would level the international playing field for American litigants and fill a major gap in the legal infrastructure of the global marketplace."

But Barbara S. Wellbery, who represented the U.S. in negotiations with the European Commission on safe harbor issues and is now an attorney in Washington, warned that the Hague Convention could have dangerous consequences for the IT industry by potentially making Internet service providers and Web site operators vulnerable to lawsuits.

The Hague Convention would protect content providers on free speech issues, but there are other issues, such as copyright infringement and privacy, where protections are less clear, said Wellbery.

The U.S., for example, has a law that limits a service provider's liability if it carries copyright-infringing material. But under the Hague Convention, the Internet service provider could potentially be sued by someone in another country that doesn't limit liability. "And for the most part, U.S. courts would have to enforce those judgments," she said.

"The result could be that the Internet is reduced to the lowest common denominator where Web sites avoid any but the safest content for fear of offending someone and being hauled into court," said Wellbery.

George Vradenburg, an executive vice president at AOL Time Warner Inc., said the cost of telecommunications is among the problems he sees internationally, particularly in countries that levy access charges by the minute. That kind of pricing model has the effect of limiting a family's use of the Internet to avoid large bills.

Other issues that came up at the hearing included calls for lowering tariffs, effective intellectual property rights protection and a tax policy that doesn't impede growth.



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