Parliament gives controversial e-commerce law the OK

South Africa

Despite resistance by the official opposition, South Africa's Parliament has approved a law designed to expand access to the Internet. Critics say it could force the network to shut down in the country. The new Electronic Communications and Transactions Act, which is expected to be signed into law by the president very soon, regulates all electronic transactions and communications, and provides for the administration of the '.za' domain to be taken over by a government body without seeking the approval of the Internet Corporation for Assigned Names and Numbers (ICANN).

The degree of government intervention in the running of the country-code top-level domain as provided for in the act is highly controversial. Opponents argue there is too much, violating international conventions on domain name management, and ICANN's rules in particular.

The act provides that the domain authority must be a company created by statute, with the state as the only shareholder. The communications minister will then appoint a board of directors from persons nominated by businesses, the internet community and the government. Opponents of the act argue that the domain authority cannot operate without ICANN's approval, and because of the level of government involvement, it may not be approved.

As a result of this controversy, the public's attention has been diverted away from the other chapters in the act. These include the following:

  • Detailed obligations to protect consumers who transact electronically are provided for. They require that businesses provide certain specified information (eg, terms and conditions), and allow for a cooling-off period that entitles consumers to return products for a refund without having to give a reason.

  • The communications minister is authorized to declare certain classes of information to be 'critical databases', and to require their registration. The minister may prescribe minimum standards for the management and control of such databases, and limit disclosure of the information.

  • The act provides that hacking and computer-related extortion and fraud are criminal offences. The new position of 'cyber inspector' is created. These individuals shall have extensive search and seizure powers, including the authority to monitor websites and electronic communications.

  • All cryptography providers are required to register with the Department of Communications. A voluntary registration system for authentication service providers is also provided for.

  • Contracts formed online have the same legal validity as paper-based contracts.

Pamela Stein, Cheadle Thompson & Haysom, Johannesburg

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