In your letter of 18 March you asked me to explain the extent of any overlap between our proposed legislation on electronic commerce and the EU proposal for a Directive on Certain Legal Aspects of Electronic Commerce in the Internal Market. The Government has published the draft Bill today, so I can now give you the definitive answer promised in my letter to you of 1 April.

  The UK Electronic Communications Bill and the EU Directive are both aimed at promoting the development of electronic commerce, within the United Kingdom and within the EU internal market respectively. However there is no specific overlap, on detail, between the Bill the current draft of the Directive. As you know, the Government has set out the ambitious goal of developing the UK as the world's best environment for electronic trading by 2002. I regard e-commerce as an essentially global phenomenon and in drafting our domestic Bill, I can assure you that we have taken account of the Directive and other international developments. In the remainder of this letter I should like to clarify a number of areas where you might have expected to see more of an overlap.

  Article 7 of the draft Directive is intended to regulate unsolicited commercial communications by e-mail—usually known as "spam". In consulting on the Electronic Communications Bill, we asked whether respondents thought the solutions being developed by industry to combat spam were likely to be effective, or whether the Government should take further steps to regulate the use of spam. The majority of respondents argued that the Government should take a "watching brief" for the moment, which is what we have decided to do. The Government is supporting the work of the Direct Marketing Association (DMA) with its US counterpart to develop a world-wide e-mail preference scheme. The DTI will also be consulting on the implementation of the EU Distance Selling Directive (97/7/EC) which contains provisions enabling consumers to register their objection to receiving unsolicited e-mails sent for the purposes of distance selling, and to have their objections respected.

  Article 9 of the draft Directive deals with the treatment of electronic contracts, in particular the present draft says that "Member States shall ensure that their legislation allows contracts to be concluded electronically". The UK fully supports the intention behind this. However, the Government believes that it does not need to introduce specific legislation in this area. Our system of common law does not impose general requirements for contracts to be in writing (or indeed in any other form). Our law is already sufficiently flexible to allow contracts to be concluded electronically; indeed more and more people are making use of this flexibility. The Bill should accelerate this process as clause 7 specifically provides for the legal admissibility of electronic signatures. We have asked for article 9 of the Directive to be redrafted to read "Member States shall ensure that contracts may be concluded by electronic means" to recognise the position in common law, but also to ensure that those member states with civil law systems are obliged to amend their legislation to allow electronic contracting.

  For completeness, I should add that there are some specific requirements in our law for contracts to be in writing. A noteworthy example is section 53 of the Law Property Act 1925 (c.20), which provides that contracts for sale of land should be in writing, signed by the person conveying the land. The Electronic Communications Bill provides for a general power (clause 8) which would allow existing statutory requirements to be extended to electronic communications. The Government intends to use this power, on a case-by-case basis after due consideration, to update the law to allow the use of electronic communications more generally except in those few instances where it would be inappropriate to do so.

  On a related topic, I should add that we have also taken steps to ensure that the draft Bill is consistent with, where appropriate, the current articles of the draft Electronic Signatures Directive, which I know you have also been studying. Although the Directive is still to be finally agreed (it will return to the European Parliament later in the year for a second reading) we have ensured that the current measures it contains concerning the legal recognition of electronic signatures and the accreditation of Certification Service providers are implemented in the draft Bill.

  I hope you find this letter helpful, and I am sure you will not hesitate to contact me if you have further questions about either the draft Bill or the Directive. I am copying this letter to the Chairman and Clerk of both the European Scrutiny Committee and the Trade and Industry Committee in the House of Commons.

23 July 1999