Group rewrites some state rules for Internet commerce

Tuesday, August 6th 2002, 12:00 am
By: News On 6

WASHINGTON (AP) _ An organization of states' lawyers has approved changes to a package of rules governing Internet commerce, including new limits on the ability of technology companies to remotely disable their software on a consumer's computer.

The changes to the Uniform Computer Information Transactions Act, known as Ucita, would take effect on a state-by-state basis as state legislatures pass the proposed rules into law. They enforce the licensing agreements that take effect when a consumer clicks the ``accept'' button when installing new software.

The changes, approved last week and announced Monday, explicitly permit customers to criticize software companies without the risk that companies could revoke the license to operate their products. The changes also allow consumers to conduct ``reverse engineering,'' to study how the software is made to ensure that it works with other technology.

To date, only Virginia and Maryland have approved packages of laws patterned after Ucita, which has been heavily criticized by manufacturers, private lawyers' groups, including the American Bar Association, and consumers groups.

The amended rules were approved by the National Conference of Commissioners on Uniform State Laws, a Chicago-based group of more than 300 lawyers, judges and law professors appointed by the states to propose uniform state laws.

Even supporters of the new rules acknowledged that the existing Virginia and Maryland laws could complicate the situation, since those laws won't be amended automatically to reflect the new changes.

John McCabe, the general counsel for the conference of commissioners, acknowledged that technology companies can declare that the more-restrictive Virginia or Maryland provisions apply to their software, whether or not the company or its customers were in those states.

``Our law pretty much allows free choice,'' McCabe said.

Lawmakers in other states have been waiting for the current fight over these latest rule changes before deciding whether to pass the provisions into law. The nation's technology industry, including Microsoft Corp. and AOL Time Warner Inc., has lobbied for approval of the rules.

Some opponents said the new changes don't go far enough. The head of one group, Americans for Fair Electronic Commerce Transactions, said even the amended rules would allow technology companies to disable software on a customer's computer for ``perceived misuse'' of a product, if the company gives ``reasonable notice.''

Microsoft, for example, has announced that a forthcoming update for its flagship Windows XP operating system will not load on some illegal copies and will block these customers from downloading future security and reliability updates from its Web site. The company previously used another software update to sabotage its Office business software electronically on computers it believed were running illegal copies.

The narrow change announced prohibits companies from disabling software only when customers terminate a license agreement, said Miriam Nisbet, the president of the Ucita opposition group.

``That's a technical but important difference,'' Nisbet said. ``We would say that shouldn't give you a whole lot of comfort.''