There are a variety of laws directly and indirectly applicable to privacy issues. US and foreign law diverge on concerns over the privacy of personal data — privacy issues relate to obtaining, using and distributing personal data such as names, addresses, phone numbers, income, medical conditions, and characteristics of race, sex, age, ethnicity and political affiliation (Thelen & Priest 2000). The Internet opens commerce to transactions anywhere in the world, and as a result, businesses need to be aware of these differences. There are two primary areas of concern arising under the privacy concept.
One is privacy of internal workplace data, and the other is privacy of external data, meaning company to company or company to customer data. Internal memos and electronic mail generated from company computers are owned by the company. Employees also need to be aware that companies can monitor employee use of electronic mail and the Internet. This includes personal messages sent via e-mail. Personal data is generally acquired through the use of 'cookies' and individual responses to on-line questions. Cookies are computer codes used to track Internet users movement around the World Wide Web.
Most consumers are unknowingly leaving information about themselves. 2. 8. Domain Name Disputes Domains names are the tools consumers use to access a business's site. Disputes arise over ownership of domain names and because of similarities between similar domain names. This practice of adopting similar or identical domain names is often referred to as cyber squatting. Two groups are currently major players in the distribution or registration of domain names. Network Solutions, Inc. (NSI) was the first provider of domain name registrars.
This group allows domain name registration on a first come first serve basis with no exclusion process. Internet Corporation for Assigned Names and Numbers (ICANN) is a non-profit organization entrusted with the responsibility for and having the goal of facilitating privatization of Internet names and addresses. ICANN's new rules and procedures for resolving domain name disputes provide for an exclusionary process which allow an owner of a domain name to exclude others from obtaining registration of a domain name 'identical or confusingly similar' to theirs (Internet Corporation 2000).
While both groups are in operation, ICANN will become more important as organizations become more interested in protecting their domain names. Even so, cybersquatting disputes and litigation will probably continue into the near future. A related domain name issue that e-businesses must consider revolves around ownership. Businesses need to carefully review their contracts to be sure they, and not the service provider or developer, own their registered domain name.
Ensuring enforceability of electronic agreements in the courts is critical to increasing their usefulness. Basic principles of contract formation still apply to electronic business transactions. A contract is an agreement between two or more parties creating an obligation to do or not to do a particular thing. Essential elements include competent parties, subject matter, a legal consideration, mutuality of agreement and mutuality of obligation (Black 1998). Certain types of contracts require the special formality of a writing and appropriate signature.
A major issue with electronic agreements is whether they meet the 'writing' requirement of the Statute of Frauds. The U. C. C. defines a writing as "printing, typewriting, or any other intentional reduction to tangible form" (Uniform Commercial n/a, p. 39). Several court cases have expanded the Statute's definition of what constitutes a 'writing'. Technological innovations are typically acceptable (People v. Avila 1998). Most Statute of Frauds issues have and will continue to involve the acceptability of a 'digital signature' as sufficient to meet the signature requirement.
Other safeguards for ensuring enforceability of electronic commercial agreements arising through the Internet include: ensuring that all terms and conditions are stated in clear, simple and straightforward language; stating that the online display is the sole, exclusive and final agreement; establishment of a storage system for agreements; offering the opportunity for telephone discussion and clarification of terms; inclusion of a statement that the person accepting the contract has the authority to do so; and requiring a 'signature', either handwritten or facsimile, where needed (Liberto 1997).
Some benefits arise from using an electronic means of contracting. For example, reduced costs can be associated with the use of electronic documents. Savings result from reduced postage and lower costs of storage (Hellman 1994). In addition, the instantaneous nature of Internet allows for avoidance of offer and acceptance timing issues which avoid questions of whether the offer was still open at the time of the attempted acceptance.
A digital signature is a sequence of bits created when a person, intending to sign an electronic document, runs his message through a one-way function to create a unique identifier used for sender verification purposes (Katz 1999). They are useful for privacy enhancement, sender verification/identification, document integrity and document authentication. Additionally, the use of digital signatures allows for quicker communication, which facilitates commerce.
Corporate financial controls will be further enhanced by the audit trail created by this use of digital signatures (Katz 1999). The major problems associated with digital signatures are whether the recipient has the specific number code added by the computer, and whether the signatures meet the Statute of Frauds requirement that contracts be 'signed' by the party to be charged (Uniform Commercial n/a).
The Uniform Commercial Code (UCC) does not specifically recognize digital signatures, but the UCC does define 'signed' as "any symbol executed or adopted by a third party with the present intention to authenticate a writing" (Katz 1999). The party's present intent is key to authentication of the document and the courts should accept digital signatures, as they are more difficult to replicate than a typewritten name or letterhead, and therefore fraudulent use by an unauthorized party is less likely (Katz 1999).
At the time of this writing, forty-nine states have enacted or are currently considering some form of digital signature legislation (Baker & McKenzie 2000). 3. Conclusion The purpose of this paper has been to describe some of the legal issues that impact e-commerce activities. While both business-to-business e-commerce and business-to-consumer e-commerce are expanding at a brisk pace, laws dealing with e-commerce are lagging behind.
It has been provided in this paper an overview of several legal issues that have emerged in the arena of e-commerce: jurisdictional issues, encryption regulation, privacy rights, cyber-terrorism, inappropriate web linking practices, intellectual property and copyrights, domain name disputes, electronic agreements, digital signatures, sales tax issues and libel laws.
- Applegate et al. 1998, Definition of electronic commerce, http://ecommerce. vanderbilt. edu/novak/what/tsld004.
- htm, June. Baker and McKenzie, 2000. Summary of electronic and digital signature legislation,