Law of electronic commerce-information policy

I introduction

The purpose of this paper is to provide some deep insight about the e-commerce legislation in Australia and the United States. Initially, an overview of law of e-commerce with respect to information privacy is given. Then the information about the e-commerce legislation in Australia is given. Then the information about the e-commerce legislation in the United States is given. Then Australia and the United States are compared with respect to e-commerce legislations.

II ANALYSIS

A. Overview

The rapid development of information technology and the Internet have dramatically increased the quantity of information available in digital form. This has resulted in a proliferation of uses of personal information. Some of these have major implications for the privacy of individuals. The World Wide Web (WWW or the Web) has created a totally new global business culture and environment.

The new way of doing business across the globe is called electronic commerce (e-commerce) or online or Internet commerce or business by computers and networks. So the Internet will create a huge market in the cyberspace and carry valuable information to a large number of people worldwide. This will give rise to a global knowledge based economy or information economy[1] ,[2]. The emerging electronically networked –based information economy will affect how people are governed and how they live.[3] The growth of the information economy also means that there are new threats of security, privacy, ethics and other types of online harassment such as fraud and deception.

Privacy online is a legal issue and there is difficulty of applying traditional law to the Internet. The creation and use of knowledge or information are key economic activities all over the world. Sometimes information does harm. It ruins reputations, exposes personal secrets, inflicts emotional injury, and misleads people into mistaken purchases and investments. The law must determine who bears the risk of loss from such harm-not only originators and victims, but also among originators, victims, and all the intermediaries who handle injurious information.

[4] Commercialization of the Internet has created a difficult task to establish an international legal framework to maintain security and privacy in cyberspace. Electronic commerce presents fundamental challenge to the law. The suitable law should tackle the threat of security and privacy when people do business online in the digital economy.

B. Information Privacy in Australia

Australia appears to be on course to become the latest country to extend its privacy protections to cover the internet age, although it appears unlikely that it will pursue protections nearly as strict as those that have been approved by the European Union. A bill now before the Federal Parliament proposes to extend an existing law designed to restrict the government's ability to snoop to the private sector, in the form of a code of conduct.[5]

Implementation of Australia's Electronic Transactions Act[6], meanwhile, has moved quickly since it went into effect. The act -- the country's most significant e-commerce legislation to date -- follows the United Nation's Model Law on Electronic Commerce and is based on two principles. The first, media neutrality, is basically the concept of equal treatment under the law for both paper-based and electronic commerce. The second, technical neutrality is designed to ensure that the law does not discriminate among the different forms of technology.

Generally, activity over the internet is not governed by international law. Rather, each country has its own laws, and many of the laws differ to varying extents between countries.

If someone is adversely affected by activity over the internet, and wishes to make a civil claim, generally the person will seek to do so in his or her own country, and that country's laws will usually govern the claim. Of course there are some qualifications to this general statement. For example:

• a contract made over the internet may specify that any dispute is to be heard in a particular country, and may further specify that that particular country's governing law will apply in respect of any contractual dispute.

• It is sometimes argued, in relation to some specific areas of the law, that the adversely affected person's country should not be the place where litigation occurs.

• If the defendant does not have assets in the country of the plaintiff, then the plaintiff may seek to institute legal proceedings in a foreign court, under the foreign jurisdiction's laws, rather than instituting proceedings in a local court and then having to attempt to register any local judgment in the foreign jurisdiction.

If someone is adversely affected by criminal activity over the internet, generally the alleged criminal will be prosecuted in the country where he or she allegedly committed the crime and hence that country's criminal laws will apply. However, in some situations the alleged criminal will be extradited to the country of which he or she is a citizen, for prosecution there according to the criminal laws of that country.[7]

The Commonwealth Privacy Act 1988[8] lays down strict privacy safeguards which Commonwealth (federal) and ACT government agencies must observe when collecting, storing, using and disclosing personal information. The Act also gives individuals access and correction rights in relation to their own personal information. The Act applies to the wider community (including the private sector and state and local governments) only in relation to specific categories of information: tax file number information and consumer credit information.

Privacy issues arise in a wide range of areas and circumstances. Privacy legislation deals mainly with information privacy – the handling of personal information. Other privacy issues such as video surveillance, telephone interception or ‘bugging’, and other laws may cover physical intrusion into private spaces.[9]

In December 2000, the Privacy Amendment (Private Sector) Act 2000 (the Amendment Act) was passed by federal Parliament. The private enterprises became subject to privacy laws on December 21, 2001. The application of the Privacy Act is triggered by the financial size of the organization and the nature and use of the data it collects or processes. It is also subject to some ad hoc exceptions and differing start dates. The National Privacy Principles (NPPs) in the Privacy Act set out how private sector organisations should collect, use, keep secure and disclose personal information. The principles give individuals a right to know what information an organisation holds about them and a right to correct the information if it is wrong.[10]

Among critics of the private sector privacy regime has been the European Commission (EC), which commented unfavourably. In essence, the EC said that it did not regard Australia’s privacy regime as sufficiently protective on about nine grounds. All in all, as noted at the time of its passage into law, the application criteria is open to criticism for being arbitrary and the wording of the provisions makes it less than crystal clear how, or even if, it is to apply in given cases, especially, to small business.[11]

C. Information Privacy in the United States of America

Americans have long been concerned with privacy, yet privacy concerns trail the introduction of new technologies. By definition, the law must respond to what technology defines as possible.

The American tradition of concern for privacy varies from the European approach. The European Community and Canada have principles of data protection, whereas the American tradition revolves around privacy. American considerations are based on common law tradition and a constitutional right, rather than on the more practical approach implied by data protection.

Privacy law, as opposed to data protection, has been implemented piecemeal. Privacy protection views each subject area of data as separate and requires action for each subject area as necessary. The data protection approach offers blanket guidelines for all data with an identifiable subject. In the United States there is privacy protection for federal records (Privacy Act of 1974), financial records (Right to Financial Privacy Act, Fair Debt Collection Practices Act), educational records (Family Education Rights and Privacy Act), and video rental records (Video Privacy Protection Act). There are no such controls on medical records, as this had not been identified as a problem area.

The American right to privacy is actually two sets of rights: rights of autonomy and rights of seclusion. Autonomy is the right to act freely; autonomous actions are taken without coercion. Surveillance is a form of coercion.

The rights of seclusion can be seen in the original definition of the right to privacy by Warren and Brandies as "the right to be let alone." The right to be let alone was defined [12]as consisting of four types of privacy rights: absence of intrusion upon seclusion, absence appropriation of name and likeness, absence of false light, and absence of public disclosure of private facts.

The original definition of privacy clearly singled out the press for intrusion into private affairs: "Gossip is no longer the resource of the idle and of the vicious, but has become a trade which is pursued with industry as well as effrontery"[13]. But what is electronic seclusion? Is it one's own electronic mailbox where particular messages are unwelcome? The law has not answered these questions--or rather, the law has answered, but so inconsistently that there is no coherent answer.

Appropriation of name and likeness is the use of a person's name, reputation, or image without his or her consent. An early and well-known case is that of a young woman who found her image distributed throughout the city on bags of flour without consent or compensation. The makers of the flour thought she deserved no compensation for having a lovely countenance. The New York courts agreed. Despite this early failure, appropriation of name and likeness is now recognized across America. Violations of privacy are most likely to be prohibited when the motivation is financial gain.

D. Comparison of e-Commerce Legislation of Australia with USA

E-commerce legislation of Australia and the United States has several key differences. In the United States’ e-commerce legislation, the consumer is given very importance. The U.S. law does not “require any person to agree to use or accept electronic records or electronic signatures[14] other than a governmental agency with respect to a record other than a contract to which it is party.” (E-signature Act, Sec101 (s) (2)). [15]

An Australian contract and a United States contract with respect to electronic writing and electronic signature are same if at the time of a contract, both the parties accept their binding to the contract. But the United States differs from Australia because the United States provides the contracts the opportunity to make selection from either paper or electronic transactions. Australian e-commerce legislation is less flexible as compared to the United States’ e-commerce legislation because both state and federal law in the United States require the parties to accept and store the contracts thus encouraging the enforcement and formation of contracts more flexibly.[16]

Both the countries, that is, Australia and the United States differ from each other with regard to e-commerce legislation because the right to choose the technology to be used is different in both the countries. The person has the right to choose the technology against whom the contract has been enforced in the United States law. UETA has allowed the attribution of signatures in the condition when an effective security procedure is used. This procedure needs not to be only electronic.

Rather, this procedure can be a non-technical solution, an example for such as non-technical solution is notaries. The party being bound also receives the choice of technology by the U.S. Uniform Computer Internet Transaction Act (UCITA). So it can be said that individuals have full freedom to design their legal binding contracts with the help of the United States Acts.[17]

The Australian system does not allow such type of freedom. The choice of the use of technology is given to those who require the signatures and who enforce the contract. The Australian Act states that “the person to whom the signature is required to be given, consents to this requirement being met by way of the use of the method mentioned in paragraph (a)…” A method is described in paragraph (a) that will help in the identification of the person and for indicating the approval of the person of the information communicated.[18]

III CONCLUSION

Australia should be prepared to keep pace with technological innovation and join the new global business environment if it is to remain competitive internationally. Australian Business Law in the current form cannot cope with the contemporary business operations. The technological change is revolutionary, but the change in the legal system is evolutionary. There should be a number of changes in Australian legal systems to accommodate electronic commerce. Under Australia law, if someone steals a credit card it is not an offence until the card is used. But in the US it is against the law to misuse an identity with the intention of committing a crime.

We have introduced debate concerning Internet regulation. The USA is the key player to bring about any effective change. There is a need to keep clean our online information environment through generally accepted international laws or other regulatory mechanisms. The Internet is global, multi-jurisdictional structure; national legal systems will not control the uses and abuses of Internet use. The continuing growth of the Internet has seen a corresponding growth in concern about online ethical privacy and security.

Bibliography

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Bishop, P., J. Kane and H. Patapan. (2002). “E-Democracy: Challenges to Democratic Theory”, Australian Parliamentary Review, Vol. 17, No. 2, pp. 55-68.

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Perrit, Jr. H. H (1996). Law and the Information Superhighway: Privacy, Access, Intellectual Property, Commerce, Liability. John Wiley & Sons, Inc.

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[1] Kannakar, N. L. (2001a). A Global Overview of New Business Paradigm: The Digital Divide Published in the Proceedings of the World Conference on the WWW and Internet (WebNet 2001), Oct. 23-27, 2001, Orlando, Florida, USA. [2] Kannakar, N. L. (2001b). Emerging Issues in Information Economy & Electronic: A Strategic Analysis. Published in the Proceedings of the World Conference on Educational Multimedia, Hypermedia & Telecommunications (ED-MEDIA 2001), June 25-30, 2001, Tampere, Finland. [3] Kobrin, S. (1998). You can’t declare cyberspace national territory: Economic Policy Making in the Digital Age. In D. Tapscott, A. Lowy & D. Ticoll (Eds). Blueprint to the Digital Economy: Creating Wealth in the era of E-Business. McGraw-Hill, 355-370.

[4] Perrit, Jr. H. H (1996). Law and the Information Superhighway: Privacy, Access, Intellectual Property, Commerce, Liability. John Wiley & Sons, Inc. [5] Besserglik, B. (2000). Spot light turned on cyber crime. The Australian IT/Cutting Edge (The Australian) Tuesday, May 16, p. 3. [6] Electronic Transaction Act (1999). Available at www.law.gov.au/publications/ecommerce

[7] Cant, S. (2002). Cyber Crime a $3 trillion nightmare. The Sydney Morning Herald, Tuesday, March, 5, p. 5. [8] Commonwealth Privacy Act 1988. http://www.austlii.edu.au/au/legis/cth/consol_act/pa1988108/ [9] Dearnc, K. (2002). Online ID theft is top of the pops. The Australian IT (The Australian), Tuesday, February 12, p. 31.

[10] Community Attitudes to Privacy, Information Paper No 3, (August 1995). http://www.privacy.gov.au/publications/pg1pubs.html#19 visited 2005-10-19. [11] Minhan, S. (2002). European privacy rules pack some punch for Australia. The Sydney Morning Herald, Tuesday, February 26, p. 6.

[12] Prosser, W. L. (1941). Handbook of the law of torts. St. Paul, MN: West. [13] Warren, S., and Brandeis, L. (1890). The fight to privacy. Harvard Law Review 4:193-220.

[14] Gelbord, B. (2000), “Signing Your 011001010: The Problems of Digital Signatures,” Communications of the ACM, Vol 43 No 12, pp. 27-28. [15] Bishop, P., J. Kane and H. Patapan. (2002). “E-Democracy: Challenges to Democratic Theory”, Australian Parliamentary Review, Vol. 17, No. 2, pp. 55-68. [16] Handford, P. (1983). “Defamation and the Conflict of Laws in Australia”, The International and Comparative Law Quarterly, Vol. 32, No. 2, pp. 452-476, April.

[17] Laudon, K. C. (1996). Markets and Privacy. Communication of the ACM, Sept. Vol. 19, No. 9, 92-99. [18] Riley, J. (1998). Forum seeks Net rules. The AUSTRALIAN: Tuesday, August 11, 36.