1 Chapter 32 e-business Copyright © Nelson Australia Pty Ltd 2003

2 Outline 1.Legislation 2.Regulating the methods of e-business 3.Regulating the practices of e-business

3 What is e-business? E-business is business conducted electronically, including: use of domain names electronic retention of documents sale of goods via the Internet formation of contracts by .

4 E-business in Australia By June 2000: 65% of Australian small businesses were online 37% of Australian households had Internet access.

Legislation

6 E-business is regulated by various pieces of legislation, many of which do not specifically apply to cyberspace Legislation which does directly relate to e- business includes: the Electronic Transactions Act 1999 (Cth) the Trade Practices Act 1974 (Cth) the Trade Marks Act 1995 (Cth)

Regulating the methods of e-business

8 Electronic Transactions Act The Electronic Transactions Act 1999 (Cth) is based on the United Nations Commission on International Trade Law (UNCITRAL) Model Law on Electronic Commerce. Versions of the Commonwealth Act have been introduced into each State and Territory.

9 Electronic Transactions Act The purpose of the Model Law is to offer national legislators a set of internationally acceptable rules designed to remove a number of legal obstacles to the use of electronic communications for the communication of legally significant information, creating a more secure environment for electronic commerce.

10 Electronic Transactions Act The Electronic Transactions Act 1999 (Cth) provides that: for the purposes of any Commonwealth law a transaction is not invalid just because it took place by ‘electronic means’ (s. 8(1)) a requirement for the provision of written documentation is satisfied by providing the information ‘by means of an electronic communication’ (s. 9(1))

11 Electronic Transactions Act a requirement that information be retained for a period of time is ‘taken to have been met if the person records the information in electronic form’ (s. 12(1)) any Commonwealth law requiring the signature of a person can be satisfied electronically so long as the method used to identify the person is ‘reliable as … appropriate for the purposes’ (s. 10(b)).

Regulating the practices of e-business

13 Domain names A domain name is an Internet protocol address. No two domain names are the same; each domain name is a unique identifier.

14 Registering domain names In Australia, registration of.com.au domain names is administered by Internet Names Worldwide. To register a.com.au domain name, an applicant must: be a commercial entity registered and trading in Australia not submit a name exactly the same as another.com.au domain name submit a name derived from, or characters contained within, the company or business name not submit a name that is an Australian place name, is a generic word, or is an offensive or obscene name.

15 Cyber-squatting ‘Cyber-squatting’ is the illegitimate registration of a domain name, e.g. with the intent of selling it to another. Some domain names may by their very registration: breach the Trade Marks Act, or represent passing off, or constitute some other form of misleading or deceptive conduct. CASE: Sporty’s Farm LLC v Sportsman’s Market Inc (2000) CASE: Marks & Spencer PLC v One in a Million Ltd (1998)

16 Dispute resolution In relation to generic top-level domain names (e.g..com), an applicant upon registration agrees to abide by the ICANN Uniform Domain Name Dispute Resolution Policy. CASE: Telstra Corporation Limited v Nuclear Marshmallows (2000)

17 Consumer protection The consumer protection provisions of the TPA will apply to e-activities. CASE: ACCC v Abel Rent-a-Car Pty Ltd (1999) However, a consumer who is misled in an Internet purchase by a corporation based in an overseas country will have greater difficulty seeking legal redress.

18 Forming online contracts Establishing the moment of formation of an online contract is important because: from that point the parties are contractually bound, and the moment of formation determines the place of formation, which in turn determines the relevant jurisdiction.

19 Forming online contracts The ETA deems: a message to be dispatched when it enters a single information system outside the control of the originator (s. 14(1)) a message to be received when the electronic message enters the designated information system (s. 14(3)) the place of receipt and dispatch to be the place where the dispatcher/recipient has its place of business (s. 14(5)).

20 Forming online contracts An interactive website will usually be considered an invitation to treat; the customer makes the offer and the vendor accepts or rejects the offer. The contract is formed upon communication of acceptance to the offeror, i.e. upon receipt of the vendor’s by the customer, and in the jurisdiction of the customer. Many online vendors include a jurisdiction clause in their terms and conditions specifying that the vendor’s country will have jurisdiction over any dispute.

21 Digital signatures The ETA provides that where a signature is required for the purposes of a law, this requirement is met where a method is used to identify the person and to indicate the person’s approval of the information communicated (s. 10(1)(a)). The method used must be as reliable as was appropriate for the purposes for which the information was communicated (s. 10 (1)(b)).

22 Jurisdictional issues Previously, Australian courts have been reluctant to enforce jurisdiction over matters where such an enforcement would amount to an imposition of Australian laws on every other country in the word. CASE: Macquarie Bank v Berg (1999) However, Australian courts appear to be becoming less reluctant. CASE: Gutnick v Dow Jones & Co Inc (2001)

23 Privacy issues Each of the following methods of online information collection and use gives rise to privacy concerns: cookies mailing lists and spamming collecting personal and sensitive information, e.g. for security purposes.