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Chapter 32

e-business

Copyright © Nelson Australia Pty Ltd 2003

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Outline

1. Legislation2. Regulating the methods of e-business3. Regulating the practices of e-business

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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 email.

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E-business in Australia

• By June 2000:• 65% of Australian small businesses were

online• 37% of Australian households had Internet

access.

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32.1

Legislation

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Legislation

• 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)

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32.2

Regulating the methods of e-business

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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.

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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.

http://law.gov.au/publications/ecommerce/etaem.html

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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))

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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)).

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32.3

Regulating the practices of e-business

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Domain names

• A domain name is an Internet protocol address.

• No two domain names are the same; each domain name is a unique identifier.

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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.

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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)

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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)

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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.

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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.

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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)).

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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 email 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.

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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)).

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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)

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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.