Legislating Market Winners: Digital Signature Laws and the Electronic Commerce Marketplace

The author argues that certain enacted digital signature laws are premised upon false assumptions, and inappropriately enshrine a business model which would not naturally evolve in the marketplace. In attempting to solve an unsolvable liability allocation problem, such legislation harms consumers and the future evolution of electronic commerce. This article points out that alternative business models can solve the liability allocation problem. Despite obvious flaws, legislation of this kind continues to be proposed, partly because the infrastructure created by these laws coincides with the needs of key escrow proponents.

Ultimately the article argues that digital signature laws, which impose a particular view of electronic commerce, should be abandoned, in favor of laws, which remove specific, well-defined barriers to electronic commerce, and which allow the electronic commerce marketplace to evolve unfettered.