Microsoft, Trade Organizations Call for Improvements to Laws Related to Growing E-Commerce in Latin America

Company Cites Need for Principles to Govern E-Commerce and Protect Intellectual Property

WASHINGTON, D.C. - Sept. 30, 1999 - Today at a conference spotlighting electronic commerce in Latin America, Microsoft Corp., along with leading Latin America lawmakers and representatives from trade organizations, will discuss the need for consistent regional principles to govern electronic commerce in Latin America. Latin America has one of the world's fastest-growing rates of Internet connectivity. According to International Data Corp., e-commerce spending in Latin America will reach $8 billion in U.S. dollars by 2003, up from $167 million in U.S. dollars in 1998.

One issue of concern is that current laws governing commercial transactions are not well-suited to regulate electronic transactions and thus hinder the development of electronic commerce. Many national laws were enacted before electronic commerce became a reality and have not yet adequately addressed the issues of what constitutes a "signature" in the electronic environment and how certain online contracts are formed.

This situation creates uncertainties that must be resolved before all parties to an electronic transaction can feel assured that the legal framework which governs traditional commercial transactions also applies to electronic agreements. Legislation is being proposed in some countries such as Brazil, Ecuador, Mexico and Peru, and a statute has already been passed in Colombia, but the challenge still facing Latin American nations is to achieve consistency across borders in the treatment of e-commerce, and to conform to traditional free-trade principles embodied in the General Agreements on Tariffs and Trade (GATT), the General Agreement on Trade in Services (GATS) and Trade-Related Intellectual Properties Rights (TRIPs).

"Today we will discuss how most of the current commercial laws in Latin America are not only inadequate to govern e-commerce, but that there is tremendous exposure to violations of intellectual property rights in the current Internet environment in Latin America," said Microsoft Corporate Attorney Horacio Gutierrez at the first hemispheric conference, Responding to the Legal Obstacles to Electronic Commerce in Latin America. "Of concern to the software industry in particular are the high rates of software piracy in Latin America and the ease with which direct purchases of illegal software can be carried out via the Internet." Approximately 62 percent of PC business software loaded onto computers in Latin America in 1998 was illegally copied, according to research conducted by International Planning & Research Corp. on behalf of the Business Software Alliance.

The conference, held today through Oct. 1 at the Organization of American States in Washington, D.C., is sponsored by the National Law Center of Inter-American Free Trade, the Organization for American States, the Business Software Alliance, Compaq Computer Corp., Oracle Corp., FDX Corp. and Microsoft. Panels include:

• Report on the E-Commerce Activities of the OAS, ICC, ABA and UNCITRAL
• Issues of Formalities: The Formation and Validity of Electronic Agreements
• Intellectual Property Issues in E-Commerce - Piracy in the Internet Age
• Certification, Authentication and Electronic Signatures
• Party Autonomy: Choice of Law, Jurisdiction and Model Agreements
• Financing Electronic Commerce: Security and Reliability
• Taxes, Tariffs and Other Regulatory Barriers to Electronic Commerce

"We want to ensure that e-commerce throughout Latin America is not stalled due to lack of consistent approaches to online trade," Gutierrez continued.

Attendees, including legal experts and industry representatives from the Americas, will suggest solutions that address e-commerce legal issues in Latin America and will draft a set of guiding principles that contracting parties may voluntarily adopt to govern electronic agreements. These guiding principles will be inspired by principles of free trade, freedom of contract, recognition of e-signatures, nondiscrimination of the electronic modalities, technology neutrality and cross-border consistency, all in an atmosphere of regulatory restraint.

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