STANDARDIZING GOVERNMENT STANDARD-SETTING POLICY FOR ELECTRONIC COMMERCE

Mark A Lemley, Professor of Law, University of Texas School of Law; Of Counsel, Fish & Richardson, P.C.

1/01/2005
(Original Publish Date: 1999)

The U.S. government's policy towards open standards in electronic commerce is inconsistent. On the one hand, the Magaziner Report endorses the idea of interoperable standards and open standard-setting processes for electronic commerce. It also suggests that governments should not be involved in setting technical standards. On the other hand, the Report also endorses government intervention in the standard-setting process in the case of encryption. Further, it recommends expanding intellectual property rights, without acknowledging the difficulties this can cause for open standards. Professor Lemley's article draws attention to this inconsistency, and suggests ways that the government could help promote open standards if it truly wished to do so. The Framework for Global Electronic Commerce ("Magaziner Report" or "Report") contains strong language concerning the proper development of technological standards for electronic commerce. 1 Consistent with its general anti-government tenor, the Report takes a strong position against government standard-setting in its section on Technical Standards.2 Somewhat more surprisingly, the Report also takes the position that technical standards should be open and promote interoperability,3 and strongly suggests that the standards be set by industry groups rather than individual companies.4 Unfortunately, an examination of government policy towards electronic commerce reveals that the government's actual approach to standard-setting is internally inconsistent. Further, the broad general endorsement of open standards in the Report leaves a number of important issues unaddressed, including the role of intellectual property and antitrust law in standard setting. How these questions are dealt with in practice will have a significant impact on the way in which electronic commerce develops.