House OKs cyber rules

Delegates approve code to protect buyers of software

Consumerists object

Bobo says flimsy law might make Md. laughingstock

March 29, 2000|By Timothy B. Wheeler | Timothy B. Wheeler,SUN STAFF

Pioneering legislation that would govern sales and licensing of computer software cleared the House of Delegates yesterday amid debate about whether it goes far enough to protect Maryland consumers.

By a vote of 83 to 50, delegates approved the Uniform Computer Information Transaction Act, a complex, 82-page bill that would set the legal rules governing software purchases, in stores and over the Internet.

Proponents want the legislation to serve as the cyber version of the Uniform Commercial Code, which for the past 50 years has governed business transactions.

Del. Kumar P. Barve, a Montgomery County Democrat who spearheaded the effort to pass the bill, said it has been substantially amended to protect Maryland consumers from defective software and from one-sided license agreements.

"We are now giving our consumers more rights than anyone else in the nation," Barve said.

But critics argued that consumer protections added to the bill fall short, and they complained that lawmakers were being rushed to approve a complicated bill that most had had less than 24 hours to absorb.

"We could inadvertently make ourselves possibly the laughingstock of e-commerce society across the nation," warned Del. Elizabeth Bobo, a Howard County Democrat.

The measure is the cornerstone of a package of high-technology bills pushed by Gov. Parris N. Glendening and legislative leaders, who contend that Maryland can become the next Silicon Valley if it is among the first in the nation to adopt a legal framework for computer commerce.

Supporters of the bill include Microsoft Corp., America Online Inc. and major software makers, as well as a variety of other industries.

But the bill has drawn criticism from consumer advocates, librarians and small software designers and computer engineers, who fear it could put them at a disadvantage in disputes with giants like Microsoft.

Originally introduced as a model statute for adoption by all 50 states, the bill was heavily amended by the House Economic Matters Committee before adoption. The bill now attempts to protect consumers while also supporting the intellectual property rights of software makers, supporters say.

As it is now, most software is sold with complex license agreements that deny any liability for the program's failure to work, or for any harm it might do the user's computer. Merely by opening the "shrink-wrap" package or clicking on a screen full of fine print, consumers allegedly are agreeing to be bound by terms set by the manufacturers.

Under the bill, Maryland consumers would be entitled to get their money back if computer software does not work as advertised.

The bill also would prohibit software companies from using a form of electronic repossession known as "self-help" on Maryland consumers. Some companies now claim the right to disable a user's computer via the Internet when they get into a dispute.

Those and other amendments failed to mollify critics of the bill, who have branded it a "sweetheart deal" for big players like Microsoft and AOL.

"It's a better bill than it was originally," said Steven Sakamoto-Wengel, an assistant Maryland attorney general in the consumer protection division. "But we don't think it goes far enough."

One major weakness, he said, is the bill's failure to specify that Maryland consumers are entitled to sue software makers in this state's courts if they can't resolve a dispute. The House measure would allow companies to demand that lawsuits be tried in their home state, where the laws may be less consumer-friendly than in Maryland.

"The bill doesn't guarantee that Maryland consumers will be protected by Maryland law, and will have access to Maryland courts," the assistant attorney general said.

Librarians also expressed fear that the bill would restrict the ability of library patrons, students and teachers to freely copy and exchange electronic information, as they have been largely permitted to do with paper documents for the past 200 years.

House members did exempt the banking and insurance industry from the measure, and included special provisions for the movie industry.

The bill, known as UCITA, now goes to the Senate, where it faces a time squeeze with only 1 1/2 weeks to go in the 90-day legislative session. A work group of the Senate Finance Committee has yet to finish its review of the measure.

"We want to put out a bill we can be proud of," said Sen. Leonard H. Teitelbaum, a Montgomery County Democrat who is overseeing that body's review of the bill.

If enough senators are not comfortable with its complexities, however, he said he would argue for delaying the measure for a year. House leaders say they remain hopeful there is time to pass the measure, making Maryland the first in the nation to enact such legislation.

Virginia has enacted the model law with little modification, but delayed its start until July 2001 so its legislators could study changing it.

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