Oz – Foundations of Electronic Commerce © 2002 Prentice Hall Legal Issues

Oz – Foundations of Electronic Commerce © 2002 Prentice Hall2 Learning Objectives Explain the current legal challenges facing parties engaged in e-commerce Contrast the two approaches to adjudicating e-commerce lawsuits Discuss the challenges of protecting intellectual property on the Internet

Oz – Foundations of Electronic Commerce © 2002 Prentice Hall3 Learning Objectives Form an opinion about legal restrictions on online commerce and expression Compare the legal approaches of different countries to privacy on the Web Explain how the Web may facilitate unfair trade practices

Oz – Foundations of Electronic Commerce © 2002 Prentice Hall The Internet: a lawless territory?

Oz – Foundations of Electronic Commerce © 2002 Prentice Hall5 Some of the legal issues that are handled differently in various countries Does an electronic transaction have to be signed on paper? May Internet auction participants place any item they wish for auction? Are pornographic sites legal?

Oz – Foundations of Electronic Commerce © 2002 Prentice Hall6 Where can I sue you? Two main approaches: Country of origin Country of origin principle all legal matters are confined to the jurisdiction of the country from which the site operates Country of destination Country of destination principle the laws of the country to which the site caters apply to any dealings with the site

Oz – Foundations of Electronic Commerce © 2002 Prentice Hall7 Do I have to sign it on paper? Electronic signatures: the pros Reduce paperwork, save trees, make some processes more effective Difficult to forge Electronic signatures: the cons Increase consumers’ burden of proof

Oz – Foundations of Electronic Commerce © 2002 Prentice Hall Protecting intellectual property on the Internet

Oz – Foundations of Electronic Commerce © 2002 Prentice Hall9 Typically, the law addresses several types of intellectual property: Trademarks Copyrights Patents Trade secrets

Oz – Foundations of Electronic Commerce © 2002 Prentice Hall10 What’s in a name? URLs as trademarks URLs as trademarks Domain names are treated as trade marks Only companies that have used a word as a trademark are allowed to use it as part of a domain name as well Cybersquatting Cybersquatting Registering domain names in order to sell them later for profit

Oz – Foundations of Electronic Commerce © 2002 Prentice Hall11 The weak link The weak link It is illegal to misrepresent the work of another site as if it were yours It is illegal to copy text, pictures, sound, or animation from another site watermarking watermarking

Oz – Foundations of Electronic Commerce © 2002 Prentice Hall12 Copyright and copywrong Copyright laws grant a person or organization the sole right of copying, using, and selling a work Ensure that the creators can financially benefit from the work Copyright vs. the right to free speech

Oz – Foundations of Electronic Commerce © 2002 Prentice Hall13 Patently wrong? A patent gives the inventor of a device or method the exclusive right to make, use, or sell it for 20 years Many problems exists with the awarding of business method patents

Oz – Foundations of Electronic Commerce © 2002 Prentice Hall Free speech

Oz – Foundations of Electronic Commerce © 2002 Prentice Hall15 You can’t say that on the Web! Telecommunications Act of 1996 Children’s Online Privacy Protection Act (1998) Technological difficulties involved in selective censorship

Oz – Foundations of Electronic Commerce © 2002 Prentice Hall16 Free speech jurisdiction Difficulties when one government attempts to encroach on another government’s jurisdiction Laws vary from country to country, while the Internet is shared by all nations

Oz – Foundations of Electronic Commerce © 2002 Prentice Hall17 Antispam legislation Spam = unsolicited mail, usually of commercial nature, broadcast to multiple recipients Electronic equivalent of junk mail Attempts to pass antispam laws in the US have failed so far Some ISPs refuse to sign contracts with companies that practice spam

Oz – Foundations of Electronic Commerce © 2002 Prentice Hall18 Legal restrictions on online commerce Online gambling Sales of controlled substances Whose auction is it anyway? Welcome to …. whose site?

Oz – Foundations of Electronic Commerce © 2002 Prentice Hall19 E-privacy legislation The EU has implemented restrictive privacy directives They prevent the transfer of personal data to countries that that do not impose rules that are at least as restrictive “safe harbor” US companies that want to do business with the EU must sign up for the “safe harbor” arrangement

Oz – Foundations of Electronic Commerce © 2002 Prentice Hall20 Canada: Personal Information Protection and Electronic Documents Act (2000) US: Children's Online Privacy Protection Act of 1998 Privacy of Consumer Financial Information Act

Oz – Foundations of Electronic Commerce © 2002 Prentice Hall21 Antitrust laws and the Internet Antitrust laws forbid two or more organizations to coordinate prices An exchange site can become a competitive market or an arena for price fixing Ways to minimize collusion on the Web

Oz – Foundations of Electronic Commerce © 2002 Prentice Hall Legal Issues