The European Commission believes it is close to securing a global agreement providing data security over the Internet - but the US government may refuse to sign up to it.
The EC expects to produce a policy paper on the issue by 26 February and is confident of wide international support. But the US has its own programme, which the EC has criticised sharply since Christmas for its slowness.
The Commission debated the complex issues of data privacy, encryption - the coding of sensitive material during electronic transactions - and state regulation of online commerce, at the RSA data security conference in San Francisco last week.
Signalling its growing frustration with US foot-dragging on computer security regulation, Detief Eckhert, an EC official, said: ?Communications is global and we need worldwide agreements. Why not try to get together for a little consistency??
The danger of a trade clash between US and Germany over different approaches to encryption was also raised. ?We don?t plan to restrict the use of US products in Germany but they may not be in accordance with global law,? said another Commission official.
An important part of any agreement will be the availability and use of special keys to decode encrypted business transactions, or to protect sensitive information like pin numbers and credit card details. This will be particularly vital if online banking is to gain mass appeal.
Currently, two UK banks run online banking services, while four more are carrying out tests. Research published last week by Datamonitor predicts that by 2001, 9.1 million Europeans will use online banking.
Security worries have plagued online banking and not enough is being done by government to combat this, according to Sarah Bales, senior policy adviser to the business chief's association, the CBI. ?People need to know that electronic business transactions have the same integrity as paper ones,? she argued. ?Our research has found that the interests of the private sector are not being met.?
She added that the UK government is still working out its position on data regulation and encryption.
In response to this, a DTI spokesperson said the department expects to deliver a paper outlining the government?s stance within the next two months.
John Moroney, an analyst at Ovum, believes the European Commission faces a formidable challenge in aiming to bring order to the decentralised Internet. ?The US government is paranoid about terrorism and doesn?t want any encryption keys to fall into the hands of terrorists, while certain users of the Internet are paranoid about censorship,? he said.
Moroney insisted that the Commission will also have to ensure that Internet service providers stick to a code of conduct and classified material, allowing illegal material like pornography to be tracked down. ?They?re not even scratching the service yet,? he said.
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