WASHINGTON, DC, September 21, 1999 --  

When the Clinton Administration announced last week that it will end the export ban on powerful encryption software, technology leaders and freedom advocates rejoiced.¹ The past few weeks have seen several U.S. government actions that promote the free and unregulated growth of the Internet. Besides the extraordinary turnaround on encryption, a federal judge allowed back online a Web Site that published secret Ford Motor business strategies ², and U.S. Congressmen declared that they had no intention of taxing the Internet.³ Government, it seems, is resigning its control over the fastest growing communications and commerce medium in the world.

At least this is what the United States government is doing. Meanwhile, across the Atlantic Ocean, European Union legislators are doing exactly the opposite. The most recent threat to the Internet is a draft law that would give EU courts jurisdiction over foreign companies who do electronic commerce in Europe.⁴ Since all commercial web sites are automatically visible throughout the world, this law would immediately place all electronic commerce sites under the burdensome regulatory control of the EU.

This isn't the first time European governments have sought to impede the growth of the Internet. Last year, European bureaucrats imposed regulations dictating privacy measures that companies must take when collecting data from EU residents. A few years earlier, the government of Germany fought to prevent America Online from disseminating ideas that the German government deemed objectionable.

In each of these cases, European governments have sought to force their will upon an American-invented medium that has broken from the shackles of its government-inspired birth to become an amazingly free and amazingly dynamic. That European bureaucrats don't like this freedom is no surprise. Fifteen years ago, the French government tried to put computer networks under its control before the Web was even born. The result of this effort, the struggling Minitel system, is still actively promoted by the French government, and still fully under governmental control.

In contrast, the Internet has been relatively free of such controls, and has therefore been allowed to blossom into a freewheeling resource of information, and a burgeoning consumer market. And despite what all the European meddling might suggest, this has happened almost entirely within the United States. Europe has had relatively little to do with the revolutionary developments that have happened since the inception of the Web. European Internet hosting and usage is far below that of the United States. The United States hosts over five times as many Internet domains as does Europe,⁵ and almost three-quarters of all electronic commerce on the Web takes place inside the United States.⁶ Clearly, Europe is far behind the United States in web usage, despite a much larger population.

The main reason American Internet retailers have not seized on their advantage to target European consumers is the high cost of creating web sites to cater to numerous local languages. If this hindrance were exacerbated by burdensome regulations, it is likely that U.S. companies would not bother to do electronic business with Europeans at all. They might set up their sites to refuse to take orders from customers in the EU. This worries trade interests, like the U.S. Commerce Department, since this would give an inherent advantage to European-based Internet businesses, and may allow them to catch up with the American lead.

These slight European advantages are more than outweighed, however, by the disadvantages that producers and consumers would suffer from being cut off by U.S.-based electronic commerce. Europe is already far behind the United States in embracing Internet technologies. Further bureaucratic tampering by meddlesome EU governments will only serve to widen the gap.

1. The Washington Post, U.S. to End Curb On Export of Secrecy Software, September 17, 1999
2. The Associated Press, Judge allows some of Ford enthusiast's material back online, August 30, 1999
3. The Washington Post, GOP Cool to Internet Taxes, September 15, 1999
4. Reuters, U.S.: EU law could chill e-commerce, September 15, 1999
5. domainstats.com, Tuesday September 8, 1999 http://www.domainstats.com/
6. International Data Corporation, Non-U.S. Internet Commerce to Account for Almost Half of Worldwide Spending by 2003, IDC Reports, August 25, 1999