The House narrowly defeated a controversial measure last night that would grant contracts signed on a computer the same legal status as the ink-on-paper variety.
The sponsor of the Electronic Signatures in Global and National Commerce Act, Rep. Thomas J. Bliley Jr. (R-Va.), exhorted colleagues yesterday from the floor of the House to vote for the bill, which he called "one of the most important high-technology votes that this Congress will undertake."
Bliley needed two-thirds of House members present to pass the bill under the arcane requirements of suspension of the rules. The vote was 234 in favor and 122 opposed, just shy of the two-thirds mark.
Those opposing the bill--including the Clinton administration--said that it goes beyond the laudable goal of encouraging electronic commerce and undercuts state and federal consumer protection laws, creating a lower standard of protection in the online world than in the real world.
"Individuals should have no fewer consumer protections in the online world than they do in other forms of commerce," the White House said in a statement. "That disparity could undermine consumer confidence in electronic commerce and impede the growth of this important new medium of trade."
Bliley called allegations that the bill would harm consumers "absolutely false" and said that the proposal had been extensively reworked in response to concerns voiced by consumer groups and Democrats. Those changes include requirements that important notices such as mortgage foreclosures and utility service cutoff notices be delivered on paper.
The administration statement acknowledged that the bill had undergone "some improvements" but concluded that the bill "still goes well beyond what is necessary to facilitate electronic commerce, and unnecessarily deprives consumers of important protections."
A consumer advocate who has fought the bill, Margot Saunders of the National Consumer Law Center said that House staffers had still produced a bill that would allow unscrupulous businesses to trick consumers into "clicking away their rights" to get important legal notices such as cancellation of health insurance or the power to cancel financing deals within three days. "I'm not at all satisfied with the crumbs that they are throwing us," she said.
A similar measure is nearing action in the Senate.
"We're disappointed," said Chris Larsen, chief executive of the online lending company E-Loan, "and just surprised that the administration took such a strong position" opposing the bill. Larsen, who lobbied Congress last week on the bill and met with administration officials, said that he believed the White House simply wanted to wait until next year to take on the issue again without the haste of the current effort.