Speech by Secretary of Commerce William Daley. Re: Global E-Commerce. Date: September 13, 1999. Source: Department of Commerce.

Remarks by Secretary of Commerce William M. Daley
Global Business Dialogue On E-Commerce
September 13, 1999
Paris, France
[As Prepared For Delivery]

I am delighted to be here today. These meetings I truly believe mark the coming of age of this industry. They are a kind of a celebration of the life of a young industry -- a child prodigy -- that grew up faster than any in history. So I feel like I am at the first meeting of the international chamber of e-commerce.

When President Clinton and Vice President Gore began drafting their let-industry-lead policy for the Internet back in 1996 -- which was the first of its kind by any country -- few people could have imagined how rapidly e-commerce would grow.

Since then, the percentage of retailers with Websites has more than tripled to 40 percent of the industry. Two years ago, E-commerce was hardly a decimal point in world economic statistics. But a few years from now it will be a trillion dollar business.

When I first became Commerce Secretary two-and-a-half years ago, I would occasionally read something about e-commerce in the business pages. Today it is the talk of the business world, and frequently gets front page play in the A-section.

And we're not just talking about new businesses, the Amazon .coms of the world. We're talking about a revolution in all business models. Change and become an e-business, or die -- that is the new reality.

We did a study at the Commerce Department that shows information technologies account for a third of U.S. economic growth.

Alan Greenspan notes that IT has begun to fundamentally alter not only the way business is done, but how economic value is created. As a result, American workers, he says, are more productive and enjoy a higher standard of living. At the Commerce Department, we now look at computer software as an investment, instead of treating it as a corporate expense.

All this means that if we can bring the world a little closer together by linking it to the Internet, we can spread the economic benefits that it can create around to people in other nations.

Just as e-commerce challenges traditional business practices, so too does it challenge traditional ways of governing. The e-commerce paradigm demanded that we in government take a new policy approach: let the private sector lead. And government will provide the legal framework so e-commerce can grow.

This is reflected in President Clinton's and Vice President Gore's Internet framework. We may not have known how fast e-commerce would grow, but we knew that the best way for it to flourish was to let business lead.

Obviously, that is why this gathering is so important to us. You have done well by issuing broad statements on many of the major issues that must be dealt with. But I view this as a good beginning, not the end, not by a long shot. I hope you will follow up with very specific and concrete work.

Frankly, you also must include other constituencies. What about consumer groups, privacy advocates, and law enforcement officials? They need to sit at the table, also.

My point is, if you want government out of the picture and self-regulation to work, you must hear all the voices. The fact of the matter is, if you don't hear them, or ignore their legitimate interests, I guarantee they will be knocking on my door, calling for regulation.

Privacy is a case in point. It is among the biggest issues we face, and I am proud that our industry came up with self regulatory standards that provide real protection for people's privacy. This is very significant so consumers will have confidence when shopping on the Internet.

We asked our businesses to step up to the plate, and they are responding.

A number of new groups are forming -- like the OnLine Privacy Alliance, TRUSTe, and BBB OnLine. They have signed up many companies or associations. They have adopted strong privacy protection principles, and are committed to enforcing them through independent audits and consumer recourse.

We're seeing real leadership by individual companies, such as IBM which won't advertise on any Website that doesn't post a clear privacy policy statement. Others have taken steps, including Microsoft, Intel, and Disney.

But it's not enough for 10 or 20 or 50 of the largest companies to sign up. I am working to broaden the base so that every company -- from a one-person, dot.com, to a Fortune 500 -- is on board.

And we need to globalize the system. I hope one day soon we see websites all over the world offer buyers and sellers strong privacy protection.

One more thought. As you find solutions that work globally, I don't believe they have to be global solutions. What I mean is we have to recognize there are differences in legal traditions and cultural patterns between America, Europe, and Japan. When we come up with consumer protections, they don't have to be exactly the same. But they must work in every single jurisdiction in the world.

As you know, we have virtually 100 percent agreement with the Europeans on privacy protection issues. To be honest, it took a whole lot longer than I would have liked. But we've reconciled our differences.

And now, the question is: how do we implement and enforce our agreement? We have a ways to go. And I want to be sure American companies won't be put at a disadvantage, versus their European competitors.

On this, I think the GBDe is on the right track by calling for transparent practices. But I think industry needs to commit to enforcing privacy protections based on fair information practice principles and with means for consumer redress.

If we do all this successfully, it can be used as a model for self-regulation in other markets around the world.

There are two other key areas where we need to see progress, also. First is consumer protection, and second, is taxes and tariffs.

Consumer protection involves many elements. Consumer recourse: How do I get my money back if my order is wrong or damaged? Liability: Who is responsible when something does go wrong? Where does a consumer go? Security: Is my credit card number and other personal data protected when I place an order over the Internet? Authentication: How do we make electronic signatures carry the same legal effect as handwritten ones?

All this boils down to consumer confidence. If e-businesses cannot come up with the right answers, I am confident that consumers will shop at the mall and not on the Net. And that, would be a sorry day.

Industry needs to develop effective consumer protection practices, and set a floor, or minimum standards.

In the end, a quality seal could be pasted on Websites that are safe for consumers to use. Something equivalent to the good-housekeeping seal of approval we have back in America.

I was very happy to see, just a few weeks ago, a number of U.S. companies -- many represented here today -- formed the E-Commerce and Consumer Protection Group. It will work to create a predictable and stable legal framework for doing business on the Internet. Their focus is global, so I hope more international companies join.

And I urge everyone here to look beyond legal or policy solutions. Use your high-tech abilities to come up with solutions, such as instant confirmation of purchases on the Net.

Finally, let me turn to tariffs. On this America's policy is very clear: we want a duty-free cyberspace.

I can report today that at the WTO meetings in Seattle this fall, we will seek an extension of the current moratorium on tariffs. And we will seek a permanent ban at the earliest possible date. Ambassador Aaron will elaborate on this later.

I hope we're not alone on this. I don't know where Europe stands. But I can't seriously believe that they wouldn't support us, unless they have tactical reasons not to. So, I urge our friends here in Europe, in Japan, and everywhere around the world to make a decision, and stand tall with us in Seattle.

I know I have only touched a few of the key issues. There are many more that must be resolved. Tomorrow, for example, I will be in Geneva to formally ratify American participation under the new World Intellectual Property Organization copyright treaty. This is a major step in protection of intellectual property rights on the Net. And this is a positive contribution by government.

Let me end on this. Today as we celebrate this new industry, and all its hope and promise, let us not forget there is a digital divide. In America, we are working to narrow that gap between those who have access to technology, and those who don't.

But this is not just a domestic problem within countries. There is a digital divide among nations, also. So I hope as we move forward, that business and government work together to close the gap among nations so e-commerce can realize its fullest potential.

Thank you very much.