Oz – Foundations of Electronic Commerce© 2002 Prentice Hall

Legal Issues

2 Oz – Foundations of Electronic Commerce© 2002 Prentice Hall

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

3 Oz – Foundations of Electronic Commerce© 2002 Prentice Hall

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?

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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?

6 Oz – Foundations of Electronic Commerce© 2002 Prentice Hall

Where can I sue you? Two main approaches:

Country of originCountry of origin principle all legal matters are confined to the

jurisdiction of the country from which the site operates

Country of destinationCountry of destination principle the laws of the country to which the site

caters apply to any dealings with the site

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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

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Typically, the law addresses several types of intellectual property: Trademarks Copyrights Patents Trade secrets

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What’s in a name? URLs as trademarksURLs 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

11 Oz – Foundations of Electronic Commerce© 2002 Prentice Hall

The weak linkThe 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 watermarkingwatermarking

12 Oz – Foundations of Electronic Commerce© 2002 Prentice Hall

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

13 Oz – Foundations of Electronic Commerce© 2002 Prentice Hall

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

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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

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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

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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

18 Oz – Foundations of Electronic Commerce© 2002 Prentice Hall

Legal restrictions on onlinecommerce Online gambling Sales of controlled substances Whose auction is it anyway? Welcome to …. whose site?

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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

US companies that want to do business with the EU must sign up for the “safe harbor”“safe harbor” arrangement

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Canada: Personal Information Protection and Electronic Documents Act (2000)

US: Children's Online Privacy Protection

Act of 1998 Privacy of Consumer Financial

Information Act

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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