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Brussels, 1 August 2001

Commission clears global network for the authentication of electronic signatures and other e-commerce transactions

The European Commission has cleared agreements between a number of major European and non-European banks creating a global network ("Identrus") for the authentication of electronic signatures and other aspects related to financial and electronic commerce transactions. The agreements which were notified to the Commission for clearance in April 1999 enable participating financial institutions to operate as individual and competing certification authorities for the purposes of secure e-commerce transactions. The Commission's negative clearance decision illustrates the importance the Commission attaches to the development of competitive e-commerce-related markets. The European Union has already in its Directive on electronic signatures of 1999 recognised that global certification authority services over open networks are fundamental for the success of e-commerce in Europe.

Identrus is a company incorporated under US law set up as a joint venture originally between the 8 notifying parties ABN-AMRO, Bankers Trust, Bank of America, Barclays Bank, Bayerische Hypo- und Vereinsbank, Chase Manhattan Bank, Citibank and Deutsche Bank. Since the notification was filed, the number of Identrus equity owners has reached 21, and the small share of any equity owner guarantees that no single company will have control over Identrus.

Participation in the Identrus System will be open to qualified financial institutions around the world ("Participants"), provided they meet objective capital requirements as defined by the Basle Committee on Banking Regulations and Supervisory Practices and in compliance with certain financial rating requirements. Each Participant can offer its own independently created applications built upon the Identrus infrastructure, in competition with each of the other Participants. Also, each Participant is free to set the prices it charges to customers for authentication services. Such services include the authentication of the identity of transaction partners and electronic messages, as well as a contractual remedy against signature repudiation. End-users are free to choose any Participant, and are thus not bound to use their habitual banking institutions.

The Commission has concluded that the Identrus System will not lead to any appreciable restriction of competition. In particular, it entails no foreclosure risk, as it is open to all those meeting objective criteria. In addition, Identrus will face competitive checks from competing systems being developed by financial industry ventures, postal authorities and telecommunications carriers among others. Moreover, Participants in the Identrus System are free to join other such systems and there are no adverse effects on input markets. A notice published in the Official Journal on 11 August 2000 gave rise to comments from three third parties. After careful review, these comments have not affected the Commission's positive position outlined in the notice. The Commission's decision was adopted under Regulation 17/62 which applies Articles 81 and 82 of the EC Treaty.

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