THE WHITE HOUSE

Office of the Vice President

EXECUTIVE MEMORANDUM TO EXPAND AND IMPROVE ELECTRONIC COMMERCE

Vice President Gore today announced a new initiative to identify laws and regulations that impose barriers to the growth of electronic commerce and recommend ways to revise them.

Removing Barriers to Electronic Commerce

Under this new initiative, embodied in a memorandum to Federal agencies issued today by President Clinton, a working group will invite public comment on Federal, State and local laws and regulations that may obstruct or hinder electronic commerce. Federal agencies and representatives of State and local governments will also be invited to identify barriers and propose solutions. The working group will recommend revisions that will facilitate electronic commerce while also ensuring that consumers and the public have a level of protection in electronic commerce that is equivalent to that which they now enjoy in the offline world.

• Many of the laws now on the books were written before the start of online commerce. By requiring in person transactions or paper documents, or by imposing licensing requirements or specific technical standards, these laws may have the unintended consequence of preventing some categories of transactions from taking place online. For example, laws requiring long-term retention of paper records require costly storage and make searching difficult - barriers that could be overcome by appropriate electronic record retention requirements.
• In conducting the review, the working group created under this directive may find that some land or paper based rules continue to make sense. For example, an online safety warning for employees working with hazardous machinery is not as effective as a safety message that is physically posted near the dangerous equipment.
• The working group also shall invite representatives of State and local government to identify barriers to electronic commerce at the State and local level, to discuss how State and local governments are revising their laws and regulations to facilitate electronic commerce while protecting the public interest, and to discuss the potential for uniform approaches to these issues.

E-Shopping

This new e-commerce initiative comes on the heels of the biggest holiday shopping day of the year. This holiday season, shoppers will spend as much as $9.5 billion purchasing gifts and products on-line [Harris Interactive], and as many as 1.3 billion people will visit on-line shopping sites. [Industry Standard] The percentage of the online population planning to purchase at least one product over the Internet has increased from 8 percent last year to 32 percent this year. [Harris Interactive] And, e-commerce sales during the holidays are expected to double, and possibly triple, between 1998 and 1999. [Industry Standard] Overall, e-commerce could exceed $1.4 trillion by the year 2003. [Forrester Research]

A Strong Record of Promoting Electronic Commerce and Protecting Consumers

Vice President Gore has worked hard to promote electronic commerce and build consumer confidence in the online marketplace. Together with the President, he has supported private sector leadership and industry self-regulation whenever possible, but have fought for new laws in some areas such as children's privacy. In the upcoming weeks, the Vice President will unveil a report detailing the Administration's progress in promoting e-commerce, and new steps to help unleash its full potential.

Administration accomplishments include:

• Encouraging the private sector to protect individual privacy through self-regulation, third-party audits and enforcement mechanisms. In just over a year, the number of commercial Web sites with privacy policies has jumped from 15% to 66%.
• Fighting for the Children's Online Privacy Protection Act, which requires commercial Web sites to get a parent's permission before collecting personal information.
• Ensuring effective consumer protection online through industry self-regulation, and the prosecution of fraudulent practices under existing consumer protection laws.
• Working to close the "digital divide" by tripling support for Community Technology Centers in low-income and rural neighborhoods, and ensuring that all students have access to educational technology. The number of classrooms connected to the Internet has increased from 4 percent in 1994 to 51 percent in 1998.

E-Commerce -- More Important Than Ever

New technologies are forever changing the way we live, the way we learn and the way we work. Today more Americans make computers than make cars. More Americans build semiconductors than construction machinery. More Americans spend their days processing data than refining petroleum. In fact, a full third of GDP growth in the past year came from information technology industries.

At the heart of this economic transformation is the Internet. When the President first asked the Vice President to oversee the administration's efforts in communications and technology, the Internet was only a tool for a few researchers and scientists. Now more than 100 million people around the world use the Internet to stay in touch with distant friends and family, research important topics, follow the news, or explore new places.

However, the Internet's most lasting impact may just be beginning to unfold. The information superhighway promises to utterly transform commercial transactions -- how we buy and sell the goods and services that make up our lives. Already, thousands of new businesses are setting up shop on the Internet. Soon, you'll be able to buy almost anything online. You'll be able to find the best price in the world almost instantly from your home computer. And you'll be able to do it in a virtual shopping mall that is open all day, all night, all across the world.

In this emerging digital marketplace, nearly anyone with a good idea and little software can set up shop, and become the corner store for an entire planet. That promises to unleash a revolution in entrepreneurship and innovation -- a cascade of new products and services that today we can scarcely imagine. Many now estimate that by the beginning of the new century, electronic commerce will grow to account for hundreds of billions of dollars a year in sales. And there is no end in site -- traffic on the Internet is now doubling every 100 days.

That is why we must remain vigilant in our efforts to remove barriers that can stifle the growth of the Internet and of electronic commerce, while doing more to ensure that consumers have confidence in this new medium. This new initiative seeks to do just that. Taken together with the administration's other efforts, we are opening up a new era of economic possibility and progress by helping to ensure that commerce goes digital, that business goes global, and that innovation goes wild.

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