Defining E-Commerce Terms

One of the primary reasons cited why people find the Electronic Commerce Act (ECA or R.A. No. 8792), its Implementing Rules and Regulations (IRR), and the new Rules on Electronic Evidence (REE) difficult to understand is that these documents use many terms that are very "technical". These terms include computers, information and communications system, electronic documents, electronic signatures, digital signatures and ephemeral electronic evidence. They are, however, not necessarily defined the same way as they are defined in technical dictionaries. Thus, a computer does not always mean a real-life computer, an electronic document is not always electronic, and an electronic or digital signature does not mean it is the electronic or digitized version of ones manual signature.


Definitions

A. Computers

The ECA, its IRR and the REE defines the term "computer" similarly as "any device or apparatus singly or interconnected which, by electronic, electro-mechanical, optical and/or magnetic impulse, or other means with the same function, can receive, record, transmit, store, process, correlate, analyze, project, retrieve and/or produce information, data, text, graphics, figures, voice, video, symbols or other modes of expression or perform any one or more of these functions." (R.A. No. 8792 Section 5(b), IRR Section 6(c), and REE, Rule 2, Section 1(d)).

Why is this term (computer) important in the ECA, its IRR and the REE? The terms "receive, record, transmit, store, process, correlate, analyze, project, retrieve and/or produce" in the definition may be equated to the terms "generated, sent, received or stored" used in the definition of the term "electronic data message". Similarly, the terms "information, data, text, graphics, figures, voice, video, symbols or other modes of expression" may be summarized by the term "information" which appears also in the definition of the terms "electronic data message".

Essentially, therefore, "computers" are the "electronic, optical or similar devices" which generates, sends or stores information referred to as "electronic data messages". It is this term, "electronic data messages", used interchangeably with the term "electronic documents", which is central to the said documents.

B. Information and Communication System

Once "computers" are inter-linked with other devices to form a system, such system is referred to as an "information and communication system". It is defined as "a system for generating, sending, receiving, storing or otherwise processing electronic data messages or electronic documents and includes the computer system or other similar device by or in which data is recorded or stored and any procedure related to the recording or storage of electronic data message and/or electronic document." (R.A. No. 8792 Section 5(d), IRR Section 6(f), and REE, Rule 2, Section 1(l)).

Just like an individual "computer", an "information and communication system" is designed to generate, send, receive, store or process "information, data, text, graphics, figures, voice, video, symbols or other modes of expression", or simply "information". Such "information" are electronic data messages or electronic documents which the REE now allows to be admitted as evidence. Examples of "information and communication system" are local area networks, wide area networks, the Internet, as well as wireless networks like GSM.

It is important to understand "information and communication system" because hacking or unauthorized access into such systems is punishable under Section 33(a) of the ECA. In addition, the integrity of an information and communications system is also one of the factors enumerated in the REE to be considered in assessing the evidentiary weight of an electronic data message or electronic document.

C. Electronic Document or Electronic Data Message

This brings us to the terms "electronic document" and "electronic data message". An electronic document is defined as an "information or the representation of information, data, figures, symbols or other modes of written expression, described or however represented, by which a right is established or an obligation is extinguished, or by which a fact may be proved and affirmed, which is received, recorded, transmitted, stored, processed, retrieved or produced electronically." (R.A. No. 8792 Section 5(f), REE, Rule 2, Section 6(h), first sentence)

According to the REE, "it includes digitally signed documents and any print-out or output, readable by sight or other means, which accurately reflects the electronic data message or electronic document." (REE, Rule 2, Section 1(h), second sentence)

The term "electronic data message" is defined as an "information generated, sent, received or stored by electronic, optical or similar means (R.A. No. 8792 Section 5(c)) but not limited to, electronic data interchange (EDI), electronic mail, telegram, telex or telecopy." (IRR Section 6(e), first sentence)

As earlier noted and as indicated in the IRR and REE, the terms "electronic document" and "electronic data message" are used interchangeably. (IRR Section 6(e), second sentence, REE, Rule 2, Section 1(h), last sentence) The working group of the Bicameral Conference Committee came up with this interpretation because the Senate version of the Act used the term "electronic data message" while the House of Representatives version used the term "electronic document". In consolidating the two versions, it was agreed that all reference to "electronic data messages" should be understood as referring also to "electronic documents" and vice-versa.

The effect of the interchanging of the two terms is to allow the use of the less restrictive definition of "electronic data message" as also the definition of the term "electronic document". This is so even though the definition of an "electronic document" seem to be more restrictive. In addition to the basic definition of "electronic data message", the definition requires that the information, or the representation of information, data, figures, symbols or other modes of written expression, establishes a right or extinguishes an obligation, or proves or affirms a fact.

Take note that, as defined, an electronic data message or an electronic document does not need to be in electronic form. Any information generated, sent, received or stored by electronic, optical or similar devices, even though they are not in electronic form, are considered electronic documents.

D. Electronic Signature

An electronic signature is defined in the ECA, its IRR and the REE as "any distinctive mark, characteristic and/or sound in electronic form, representing the identity of a person and attached to or logically associated with the electronic data message or any methodology or procedures employed or adopted by a person and executed or adopted by such person with the intention of authenticating or approving and electronic document." (R.A. No. 8792 Section 5(e), IRR Section 6(g), and REE, Rule 2, Section 1(j), first sentence). For purposes of the REE, the term includes digital signatures. (REE, Rule 2, Section 1(j), second sentence)

The UNCITRAL Model Law on Electronic Commerce, the international origin of the ECA, did not define the term "electronic signature". This is because an electronic signature is simply an electronic data message or document which serves the purpose of a real life signature. In real life, a signature serves the purpose of identifying the author of a document and showing his assent or approval of the contents of such document. For an electronic data message or electronic document to be considered an electronic signature, therefore, it must serve these purposes. Under the ECA, it will be considered the functional equivalent of a real life signature if it complies with the following requirements:
a. A method is used to identify the party sought to be bound and to indicate said party's access to the electronic document necessary for his consent or approval through the electronic signature;
b. Said method is reliable and appropriate for the purpose for which the electronic document was generated or communicated, in the light of all circumstances, including any relevant agreement;
c. It is necessary for the party sought to be bound, in order to proceed further with the transaction, to have executed or provided the electronic signature; and
d. The other party is authorized and enabled to verify the electronic signature and to make the decision to proceed with the transaction authenticated by the same.

Based on these, a digitized copy of one's real life signature cannot be considered an electronic signature because the method of attaching the said digitized copy is generally not reliable to show that the one who attached the file is the same person who is sought to be bound.

Based on this also, an e-mail address may or may not qualify as an electronic signature. If, in relation to the purpose of the e-mail, the address is reliable and appropriate to identify the source of the e-mail as the party sought to be bound, the e-mail was necessary to proceed with the transaction, and the other party can verify the authenticity the source, then it qualifies as an electronic signature.

Finally, a digital signature definitely qualifies as an electronic signature by express provision in the IRR of the ECA and the REE, particularly, because of its nature.

E. Digital Signature

It is only the REE which provided a definition for the term "digital signature". It is defined as "an electronic signature consisting of a transformation of an electronic document or an electronic data message using an asymmetric or public cryptosystem such that a person having the initial untransformed electronic document and the signer's public key can accurately determine: (i) whether the transformation was created using the private key that corresponds to the signer's public key; and (ii) whether the initial electronic document had been altered after the transformation was made." (REE, Rule 2, Section 1(e))

As stated above, the REE defined the term as a signature which consists of the transformation of encryption of an electronic document through an asymmetric or public cryptosystem. This transformation is done through a private key and the authenticity and the non-alteration of a transformed document may be verified by the corresponding public key. These keys, the private and public keys, are assigned by a third party known as the certification authority. The terms, the asymmetric cryptosystem, the private and public keys, and the certification authority are also defined in the REE.

Understanding digital signatures is important in understanding the REE because it is the first mode of authenticating electronic documents. In fact, as I would later point out, it is the only mode expressly identified by the new Rules.

F. Ephemeral Electronic Communication

Finally, ephemeral electronic communications are "telephone conversations, text messages, chatroom sessions, streaming audio, streaming video, and other electronic forms of communication the evidence of which is not recorded or retained." (REE, Rule 2, Section 1(k)) Once recorded or retained, the record becomes an electronic document and is treated accordingly.

(Copyright 2003. Gilbert E. Lumantao. All rights reserved. No part of this article may be reproduced in any manner whatsoever without written permission except in the case of brief quotations embodied in critical articles and reviews.)