|SENECA COLLEGE, TORONTO|
|As Taught by Prof. Tim Richardson School of Marketing and e-Business, Faculty of Business|
3. E-commerce Law and Regulations
|Prof. Michael Geist, who teaches at the University of Ottawa Law School has just (August 2000) finished a book on Internet Law. This book has a Canadian focus but also includes many international issues and is very current (ie.includes the Napster decision). Prof. Geist and Prof. Richardson have exchanged several emails through the summer of 2000 on matters related to Internet law. When the text becomes publically available you will be given the opportunity to buy it if you wish, in the meantime, the links to the right might be useful.||
The URL for the Table of
Prof. Geist's web site containing
his writings and articles on Internet law issues
|These chapters relevant
to IEC 719
Chpt 3 - Jurisdiction on
These chapters relevant to
IEC 702 Section C
|This book is
not specifically a "required" purchase for IEC 719, but,,, it is strongly
recommended that every person serious about being a professional in e-commerce
have a copy to refer to and, better yet, read several chapters from in
order to have some idea of how a few critical legal issues can impact on
your business and marketing decisions.
|In many instances of business,
U.S. government regulations at the national (federal) and regional (state)
level effect the ability, or activity of Canadian companies to do business
in / with the United States.
One of the last things President
Clinton has done re: e-business is to sign an Act in June 2000
The purpose of the act has to do with helping companies who have felt "... deterred from doing business on-line because of uncertainty about whether their on-line contracts will be legally enforceable."
Secondly, the intentions
of the act were also to assist consumers in protecting their rights by
forcing companies to disclose more information in circumstances where they
require a consumer to consent to some information action in the course
of concluding a purchase or exchange.
Thirdly, the act deals with
the public's concern about too much private information being kept about
people and, because this information is in digital form, there is great
concern about it being easily abused through file sharing with entities
that the original customer did not consent to. " The Act requires that
agencies allow most records to be retained electronically, but government
may establish appropriate performance standards for the accuracy, integrity,
and accessibility of records retained electronically, to ensure that compliance
with laws can be determined"
Acts and Regulations
|"Electronic Commerce Act"
of the Philippines
from the act "Electronic documents shall have the legal effect, validity or enforceability as any other document or legal writing,"
Most e-commerce acts around the world begin with a statement similar to the above, that being the recognition that internet digitial documents will be considered valid and authentic - which is a necessary part of the preamble in any Act since this is the foundation upon which commerce in a digital form can be legit.
India had an e-commerce act
established in 1998
online article about copyright
reform in Canada by Gordon Gow, University of Calgary
3.1 Copyright is afforded not to ideas themselves but only to the expression of those ideas fixed in some medium of communication. In Canada, the requirements for securing copyright are 'originality' and 'fixation'
problem is fixation means something physically exists - and in cyber word, that is not so
- the Copyright website
- the application of current copyright law in cyberspace
- read the case study and discuss whether the defendant should be charged with breaching copyright, if, copyright did in fact exist in the first place
- the Canadian Association of Photographers and Illustrators in Communications web site
HTML code for © = ©
|Nov 2nd, Lang Michener's
Marketing Manager, Teresa Forrest, sent to IEC a box containing a 100+
page document titled
"E-commerce Law: Legal Compliance in Cyberspace"
This very useful book has been gifted to IEC from Lang Michener and we are very appreciative of this helpful contribution. The document was handed out in IEC 702 class on Thursday, Nov 2nd, students who did not get a copy are urged to obtain one on Monday or Tuesday the 7th so you can go through it in time for Mr. Milrad's address to the class on Wednesday morning Nov 8th.
other professional service industries, law firms, like accounting firms
and public relations firms, are addressing internet and e-commerce issues
by building capability among their staff to deal with client issues that
are very contemporary and complex. In Canada we have witnessed a number
of large mergers among law firms in the 1990's and the result is some very
large sized organizations with the ability to compete on a national and
international basis. Quite a few of these firms realize that it is "open
territory" to secure a reputation for competence and ability in this new
field and they can be quite competitive in their efforts to establish new
reputations. One aspect of this competitive is that many of these firms
(law, accounting etc.) give away a lot of free information on their web
sites about current "e" topics. This is very helpful to persons learning
about these issues but at the same time you have to be a bit discriminating
and recognize the difference between advetorial content and topic content.
Since the area of Law and the Internet is necessarily a complex issue that requires a tremedous amount of current study as well as much experience and knowledge of existing legislation that can be applied - we do not presume to be able to deliver all of the information you require in this area; therefore we are incorporating in this section a distinguished "guest lecturer" from one of the leading law firms in Canada.
IEC 719 and IEC 702
November 15th, 2000
|Mr. Staveley is presently
a PhD student at University of Toronto. He is involved in both academic
research and business consulting re: mobile and wireless internet activities.
While pursuing his PhD, Mark is a Research Member of the prestigious Interactive
Media Lab in the Department of Mechanical and Industrial Engineering at
Additionally, Mark is an expert in search engines and has comprehensive knowledge of how to use them.
He will talk to the class about how to be better at "finding stuff online" using search engines, as well as telling us some interesting things about how search engines work, and what developments lie in store for the future.
Mr. Staveley's address to the class will be in the IEC 719 time slot instead of the IEC 702 time slot due to scheduling requirements.
Michael Rappa's web page on Intellectual Property
includes links to articles
"A consumer today is likely
to discover numerous competitive Internet Web sites offering the same or
similar information, products or services. To succeed in this competitive
market, a business must attract as many consumers as possible to its Web
site, while building and retaining consumer loyalty. Sometimes, a Web site
is more attractive to consumers because it is built with cutting edge technology
that provides advanced audio/visual user interfaces, services and security
measures. E-commerce proprietors have recognized that a competitive advantage
may be gained by securing patent protection for such technological innovations."
Also linked off Prof. Rappa's web site is
BitLaw covers the legal issues of:
|One of the biggest challenges
in Internet legal issues is the matter of jurisdiction.
If you are speeding in New York City, you can be pulled over by the New York City Police.
If you are speeding on a highway between metro areas, you can be arrested by New York State Troopers.
If you commit a crime that involves travelling between states, you can be arrested by the FBI.
If you commit a crime that is outside the jurisdiction of any particular countries - you will not be arrested since the law can only be enforced when their is an agency that has jurisdiction.
Many companies involved in adult entertainment and gambling on the Internet think they can avoid prosecution of local and regional laws by having their server (the hardware machine that actually contains the .html pages being accessed) in various small countries in the Caribbean and this will allow them to avoid prosecution in USA, Canada of wherever they originated from.
The question of jurisdiction
does not just apply to adult and gambling sites but as we can see in the
case of Yahoo vs. France, relatively innocent companies can drawn into
jurisdictional matters through 3rd party actions.
In August 2000 there was a case involving Yahoo which saw Yahoo being ordered by the French government to block access to sites auctioning Nazi memorabilia. In France, it is against the law for such things to be sold since it comes under the category of their anti-racism and hate crimes legislation. While "www.yahoo.fr" does not carry links to such Nazi sites, it is possible for people to go onther Yahoo sites and find Nazi auctions. Yahoo pleaded that it was technologically impossible to block people accessing such sites but the French government did not agree and took Yahoo to court.
As of August 12, 2000, the French judge hearing the case had not yet called fro Yahoo tobe fines for failing to comply and was delaying his ruling.
The most interesting point
coming out of the trial was the judge's
the story as it appears on
Yahoo's English language site
Domenic Crolla, a lawyer
in the Ottawa office of Gowlings spoke at COMDEX 2000 in Toronto on the
issue of Internet jrisdiction issues. An excellent article by him was also
published in Gowlings in house newsletter and a cyber copy was also put
on Gowlings web site
Mr. Crolla writes
You should read this article
because it mentions a number of precedent setting cases by which subsequent
cases are being judged.
Crolla writes "... there are some principles with which any Canadian business with a website should try to become familiar. The leading American case on Internet jurisdiction, decided three years ago, is Zippo Manufacturing Company v. Zippo Dot Com, Inc. (“Zippo”) ... In Zippo, the [American] Court establishes a three-pronged test for determining when an American court is to exercise jurisdiction over a non-resident (including a Canadian business).... What is most interesting about Zippo is the analysis that the Court makes about websites. The Court focusses on the nature and quality of commercial activity of company websites and created a “sliding scale” to determine if any website in the world could be the subject of a lawsuit in an American jurisdiction. The “sliding scale” has two extremes. At one end, websites which allow for commercial transactions are considered to be “active”. At the other end, websites which merely provide information to be accessed by others are considered to be “passive”.... A Canadian business which publishes brochureware (brochures converted into HTML code to be placed on the company website), and does not conduct business with anyone outside of Canada, should not have to worry about American courts exercising jurisdiction over the company website."
|from Turban's book,
chpt 10, p. 365
Legally binding contracts require 3 parts
Prof. Geist's new book
"Internet Law in Canada"
has Chapter 10 "Online Contracting" devoted to the topic
Geist introduces the chapter
by explaining an important point
Geist understands well the
problems online and points out that
from Turban's book, chpt 10, p. 353
Digital watermarks are "embedded invisible marks that can be represented by bits in digital content. The watermarks are hidden in the source data, becoming inseperable from the data." While watermarks cannot prevent duplication of material, they can identify who is passing around pirated product on the Net.
http://www.isse.gmu.edu/~njohnson/Steganography/from the site of Prof. Neil Johnson in the Center for Secure Information Systems at George Mason University
Johnson, an expert
in steganography, provides a well worded definition of steganography
A Calgary based company has a software product that measures useright (not copyright) - that is to say you have a right to use a product for a certain use, and no other uses, or use it for a certain length of time, and not longer
|Why is taxation a big
issue for governments?
One of the things we have seenin the 1990's is massive social problems in many countries of the world, First World and Thirld World - all based on governments having increasing burdens to pay for more and more social costs in order to deal with the challenges of unemployment, scarce resources, migration and immigration, crime etc. Local governments in particular have found it increasingly difficult to find enough money to pay for all the services the populace require.
Basically, local government gets money from three sources
Many local and regional governments are looking to the revenue generated from internet business as a way to alleviate the problems. The problem at present (summer of 2000) is local governments find it difficult to determine the process andmethod of collecting tax from cyber oriented businesses and furthermore they find it challenging to ascertain the jurstictional issues - that is to say do they even have the legal authority to collect such new taxes.
Dr. Nathan Newman, University of California, Berkeley
has an extensive web site discussing
Government, Technology and the Political Economy of Community in the Age of the Internet
on this web site are chapters of his book
One particular chapter, # 6, is titled
How State & Local Government Finances are Becoming Road Kill On The Information Superhighway
The page containing this
chapter is at
If you print this chapter it will be about 22 pages, depending on how your browser breaks up the text. The most important section is at the beginning and some of the key points are as follows.
"...the new technology of the Internet and the global economic changes accompanying it promise to deal a final body blow to the financial security of local governments. Local governments could once count on local economic development to produce local jobs where local employees could spend money in local stores, thereby generating local tax revenue for further development. This virtuous cycle has been fatally undermined by the new technology of cyberspace. Even as many states and local areas hope for increased revenue due to high technology-based growth, it becomes harder and harder for local government to capture much of that growth in local tax revenue".
|Not only is e-commerce
in Canada effected by present and future Canadian regulations, but also
by U.S. regulations by virtue of the fact that most Canadian e-commerce
sites are trying to develop a U.S. customer base as well as a Canadian
base - therefore, in some instances, Canadian online retailers will be
effected by U.S. regulations.
"Federal Forum Tackles E-Commerce Regulation"
Morrow writes that "The U.S. Federal Trade Commission (FTC) opened debate Thursday [26Oct2000] on possible new e-commerce regulations, specifically whether existing laws should apply to software and other types of Internet downloads.
According to an FTC advisory, the two-day forum will consider how "government, private industry and consumer advocates can work together to ensure that consumers receive adequate information when shopping for software and other computer information products and services." The conference's program will be largely concerned with the level of consumer protection afforded by "clickwrap" warranty agreements, where a consumer "clicks" to assent to a warranty agreement before downloading a piece of software."
The FTC has this event explained
well on its own website. To read a bit more, go to
The subject of "clickwrap"
warranty agreements are discussed extensively in Professor Geist's book
|Internet Gambling||"Business" on the Internet
includes lots of money making areas besides conventional items like CDs,
books etc. One of the biggest areas of business on the internet are the
"fringe" areas of activity such as adult entertainment and games of risk
and chance. Since even the mention of such activities is sensitive and
respecting that people can have strong opinions about the morality of such
issues, we will not discuss these topics in our IEC 719 class. However
it should be understood that some of the technologies, payment methods
and other aspects related to laws and legislation for the e-business community
as a whole, have been, and will continue to be, effected and affected by
gambling and adult web sites. For the interest of some who wish to learn
about some of these issues there is some information below about one particular
topic related to Internet Gambling: Prohibition v. Legalization
Internet Gambling: Prohibition v. Legalization
Tom W. Bell, Director, Telecommunications & Technology Studies the Cato Institute
before the National Gambling Impact Study Commission
reading the introductory section allows you to understand some of the key issues
Bell says "All facts indicate, however, that sooner or later Americans will legally gamble over the Internet"
Bell explains that
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