E-Commerce - Case Study - Essay Example

?E-COMMERCE LAW The case involves four parties A (Alfred), B (Bert), C (CDE) and Freepcgames.com. Involving Tort, the E-commerce law, Labour Law, andother Internet related laws that would involve hacking and identity theft. I shall attempt to sort out the possible criminal and civil culpability of each party against each of the other party. This essay shall also provide legal advice on the course of action Freegames may take against each party and its desire to recover the domain name freepcgames.co.uk. A critical analysis of the case will also be provided to present a balance view of the merits of each case. Since each party has their own case against each other discussing the cases between parties separately for a better understanding of the issues shall be the norm of this paper. At the end of each case an advice will be given from my contemplation of the merits of each of the case. This case study involves A (Alfred), B (Bert), C (CDE Corporation), Freegames, and Freepcgames portal. Freepcgames is a portal that is involved in providing free computer game programs to its subscribers who pays a monthly subscription fee. Freegames is the local company that represents Freepcgames. It should be noted that Freepcgames.com is a portal registered in the United States. From the facts of the case it is not apparent if the use of Freegames or Freepcgames is a registered trademark or company brand name. Several parties each with their own interest and culpabilities have brought legal actions against one another to protect their rights and legal interests. I shall evaluate the merits of each case between the protagonists and the legal anchors if possible shall be used to provide a solid base for the critical analysis. In some cases I shall provide advice on what charge and the basis of the charges to bring the other party to court. There will be instances wherein I will be providing legal advice or defence for Freegames, since for all intents and purposes Freegames, is my client in this simulated legal situation. The legal advice provided herein remains a theoretical exercise and shall be a hyperbolic representation of an actual legal advice that may be provided to resolve legal issues for Freegames in the future that relates to the instant issues. A (Alfred) vs. Freepcgames.com From the facts of the case it is evident that the whole problem started with Alfred’s use of his company’s resources for personal gain. His case against Freepcgames,com for the recovery of his money shall not prosper because the case arose from his own negligence. A, agreed to the terms and condition of Freegames at the onset and therefore any problem arising from the use of his username and password combination is his responsibility. It should be noted that “Duty of Care”1 in order for Tort to settle against Freegames the claimant should have his hands dry and clean. Washing his hands of his own culpability and assigning blame to Freepcgames contrary to the tenets of the law and it is against the ambit of human morality. Lord Atkin has set down the test when ‘duties of care’ arises in the following details of Donohue v Stevenson. “You must take reasonable care to avoid acts or omissions which you can reasonably foresee would be likely to injure your neighbour. Who then, in law is my neighbour? The answers seems to be – persons who are closely and directly affected by my act that I ought reasonably to have them in my contemplation as being so affected when I am directing my mind to the acts or omissions which are called into questions”(per Lord Atkin [1932] AC 562 at p 580) It should be noted, that the username, password combination is the established means in which the identity of a person transacting business in the internet is established. With the express understanding of the user or customer of any internet based commercial entity that his username password combination is in fact his identity as far as this internet based commercial entity is concerned. A, therefore is not only expected to be more prudent in protecting his username password combination he should protect it the same way he protects the integrity of his name. Since A, from the facts of the case clearly did not exercise prudence or even elementary care. His claims against Freegames will not prosper. A, in fact was remiss and negligent in letting his username and password to be automatically provided when his computer is activated logs in. A, in fact is guilty of negligence and should be the one to suffer the consequence of his action by paying for the charges his username and password have incurred. Since negligence settled on the part of A, Freegames for its part should actually counter sue against A for a frivolous lawsuit and wasting the valuable time of the court. Contemplating the case of Anns v Merton London Borough Council of the “two stage test”2 for duty of care, Freegames for its part did not do any acts that is damaging to itself or its subscribers. Freegames, being in the internet business is well aware of its responsibility and has therefore instituted the necessary precautions to protect its subscribers by providing them a username – password combination to protect both parties from harm. However, the instant case it is clear that A, was the one who did not exercise due diligence in protecting his username password combination. Lord Wilberforce was very succinct in laying down his interpretation of the duty of care test in Anns v Merton LBC. “In order to establish that a duty of care arises in a particular situation, it is not necessary to bring the facts of that situation within those of previous situations in which duty of care has been held to exist. Rather the question has to be approached in two stages. First one has to ask whether, as between the alleged wrongdoer and the person who has suffered damage there is, in the reasonable contemplation of the former carelessness on his part may be likely to cause to the latter – in which case prima facie duty of care arises. Secondly, if the first question is answered affirmatively, it is necessary to consider whether there are any consideration which ought to negative, or to reduce or limit the scope of the duty or the class of person to whom it is owned or the damages to which a breach of it may give rise” (per Lord Wilberforce [1978] AC 728 at – 751-752) It is therefore correct and legal for Freegames to charge A for the services A has availed off. Since for all intents and purposes as far as Freegames is concerned it is A, and no other used the username password combination of A. It is also noteworthy to consider that A, did not report to Freegames that his username and password combination has been compromised if not has lost its integrity. Therefore, there is no way for Freegames to take measures to protect itself and also to protect A. In law if a person himself do not mind nor provide protection to himself, he should not let expect others protect him from harm. In the instant case it is clear that A, has failed to protect himself, he has also been remiss in protecting his own rights or interest by not reporting to Freegames that the integrity of his username and password combination has been lost. Freegames for its part do not have any inkling nor knowledge of any impropriety since the use of A’s username and password combination has been done in a regular and legal manner as provided for in its agreement with A as indicated in the terms of agreement. In the instant case the EU Distant Selling Directive as defined by the Consumer Protection Regulation 2000 (Parliament of the United Kingdom, 2000) will not settle. In particular articles four to nine due to the fact that Freepcgames.com have sufficiently satisfied the requirements and the principle behind the Distance Selling and the protection of Consumer Rights. In the instant case it was A who was negligent in protecting his rights in particular the protection of his username and password combination. It should also be noted that Freepcgames have complied with the requirements of the Electronic Communication Act of 2000 (Parliament of The United Kingdom, 2000) that implemented the provisions of the EU Electronic Signature Directive (1999/93/EC) which harmonized the legal acceptance of signatures all over the EU community. The username password combination is considered as the electronic signature of A. And since this electronic signature was used a transaction is considered completed and valid. Freepcgames.com vs. B (Bert) It is clear that B has committed a fraudulent act and its victim in the instant case is Freegames. Even though B has used a legitimate username and password is of no moment to the case FreePCgames.com against B. The case will stem from B’s use of the games he has downloaded directly from Freegames and using it for his benefit and gain. Using the labour of another for gain without compensating the person who has provided the labour is fraud. There are three ways in which fraud can be committed, the first by false representation; second by wrongfully failing to disclose information and third by abuse of position (Hansard, 2004). It is clear that B not only took advantage of A and Freegames by obtaining games that are not legally for his consumption and gain. The games even if it is “free” or not is of no moment in the instant case since the “free” concept of the games are only for the consumption of freegames’ subscribers which B is definitely not. A case for Fraud can be instituted against B for his actions not only against A but also against Freegames. The aggrieved party being Freegames is the proper party to institute the case Anchoring on the case of fraud Freegames as part of its prayer can ask the court to transfer to itself the Freegames.co.uk domain. Since for all intents and purposes this is the means by which B is able to gain at the expense of Freegames. It is an intrinsic part of the case to establish that B has been making money for himself at the expense of Freegames. It is an established fact that B has used the access to free games as a come-on to gain popularity to ensure that he will garner enough hits so that advertisers can go to his website. The domain Freegames.co.uk being an intrinsic part of fraud should be the subject of a recovery case against B for all the money he has earned using the domain name. It should be noted that B has used Freegames.co.uk because of its close proximity and affinity to Freegames domain that is registered in the United States. The close proximity and resemblance in name have made B the de facto Freegames in the United Kingdom and as such he has made money at the expense of Freegames or its popularity thereof. The domain name Freegames.co.uk that is at the centre of this controversy should therefore be resolved by anchoring on the fraud case committed using the domain name. It is also against the principle of the UDRP3 under the WIPO (World Intellectual Property Organization, 1996) that protects the intellectual property of legitimate business owners in particular their trade names or in this case domain name. The United Kingdom being a member of the EU community that signed the Treaty on behalf of the entire European Community through Directive 91/250/EC makes it incongruous for B to still hang on to the Freegames.co.uk since the domain was used in bad faith. Freepcgames.com vs C (CDE) Freegames can institute a counter suit against C as a third party to the whole incident for simple negligence for its failure to provide a rudimentary security to its network to prevent persons from using another person’s computer that is attached to its network. Using Ann v. Merton London Borough Council as anchor providing the two stage test it is clear the C did not diligently protect its network. The prima facie in this case is the fact that B was able to use A’s computer without A’s consent or knowledge. If C has a security system or framework designed to provide even a rudimentary if not basic security, B would not have had the opportunity to hack A’s computer. Freegames in principle do not have any action against C because there is no contractual or legal relationship between the two. However, through the illegal acts of B, Freegames and C have found themselves occupying the same orbit if not sphere. B’s action should also be cited if not mentioned. Better yet B should also become a co defendant of C in this case to bring to the attention of the court the actions of B that brought together the two parties (C and Freegames). C’s lack of information security processes have led to the opportunity for B to overcome A’s access rights and computer desk top can make C culpable for violating the Data Protection Act of 1998. It should be noted that while C is not responsible for B’s action, C however, is responsible for the protection of its data and network for the sake of its clients. Despite the presence of a culpable violation of C with regards to its failure to protect the interest of its client’s through the protection of its network. Freegames is not the proper party to institute the claims since Freegames is not a client of C. C (CDE) vs. Freepcgames.com C’s tort case against Freegames will not prosper since Freegames do not have the intent to damage or harm C’s network. It was not Freegames action that provided the means in which a virus was able to infect C’s network. The presence of a virus in any of Freegames free games is of not moment and will not count as negligence on the part of Freegames since it does not have any contract with C’s that assures and guarantee C that its games are virus free. It is apropos however to use the case of Caparo Industries plc v Dickman (1990)4 since there is no existing contractual obligation between C and Freegames which is similar to the case below. “The Caparo test consists of two tests established in Anns v Merton LBC expanding it a bit further and another test. 1. Is it reason able foreseeable that the claimant may be harmed by the defendant’s failure to take reasonable care? 2. Is the relationship between the claimant and defendant sufficiently proximate! 3. Is it fair, just and reasonable to impose on the defendant a duty of care towards the claimant?” Thus it is improper by contemplation of the law to expect Freegames to provide reasonable care for people or entities with juridical personality such as C. In fact as mentioned and should be the subject of a counter suit it is C who did not exercise due diligence and prudence in the whole incident. I hereby advise Freegames in this case to answer the case with a countersuit to establish the direct culpability of C in the incident. A vs B It is clear from the facts of the case that B has taken advantage of his position and relationship with A to gain access to A’s accounts. A clear case of identity theft has settled in the instant case and this case should be treated as such. It should be noted that identity theft in principle is the taking of the identity or impersonating a person in any legal or extra legal transaction before another party. To illustrate in the context of the case on hand: B has impersonated A by using his username password combination to gain access to A’s account in Freegames. A can file a suit against B for identity theft and damages for the tarnished image that A has suffered evolving around the incident. In actuality, it should be B who should pay A for the amount Freegames has collected from A. This position is anchored on the following arguments; it was B who directly benefited from the games that B has procured from Freegames using his username-password combination. It was B who actually used the username-password combination of A to obtain or gain access to the free games of Freegames albeit illegally. Anchoring on the Data Protection Act of 1998 (Parliament of the United Kingdom, 1998) A, can for his purpose sue B. There are a number of considerations that could hold B responsible for the computer or network breakdown at C. B is also responsible for A’s extra charges for downloading freegames in excess of what is allowed by Freegames to make the transaction free. B is also responsible if not culpable for using the reputation of another for free at the expense of the various holders of Freegames stocks and interest. A can also use the Fraud Act of 2006 since the case of A against B is under the deception offences (Parliament of the United Kingdom, 2006). It should be noted however that Freegames under this act can also sue B together with A to make the case stronger, a cohesive case can be formed against B. The illegal act by unto itself makes B culpable for all the succeeding acts that emanated from his action. B therefore has the responsibility of the fruits of his labour and should be held accountable for his actions. Violation of the Computer misuse act, Data protection act, Identity Theft under the Fraud Act of 2006 (Parliament of the United Kingdom, 2006) are some of the violations of B. These laws shall be the anchor on which charges against B shall settle. “Section 2 Subsection (5) provides that a representation may be regarded as being made if it (or anything implying it) is submitted in any form to any system or device designed to receive, convey or respond to communications (with or without human intervention). The main purpose of this provision is to ensure that fraud can be committed where a person makes a representation to a machine that a response can be produced without any need for human involvement. (An example is where a person enters a number into a CHIP and PIN machines) The law Commission had concluded that although it was not clear whether a representation could be made to a machine, such as provision was unnecessary. Subsection (5) however is expressed in fairly general terms because it would be artificial to distinguish situations involving modern technology, where it is doubtful whether there has been a ‘representation’, because the only recipient of the false statement is a machine or a piece of software, from the situations not involving modern technology where a false statement is submitted to a system for dealing with communication but is not in fact communicated to a human being (e.g. postal or messenger systems).” C vs A The case of C against A is administrative in nature and is within the realm of the Labour Law. Through the action of B, it has been found that A has been using the company’s resources for his own gain. It should be noted that gain in this instant do not focus on the actual and tangible gain of A. A’s enjoyment or the use of C computer network in gaining access to free games is in itself a clear culpable violation of A against company policy. It is not within A’s duties and responsibilities to access Freegames nor it is A’s duties and responsibility to play computer games within the company premises. Worst is A’s use of the company’s computer and network at the possible detriment of the other users who may experience slowdown in the way they access their network which can be within the ambit of their duties and responsibilities. Not only is the case against A is solely for his illegal use of the company’s resources but it is also for exposing C’s network to danger. In fact the exposure has already cost C considerable actual damage if not effort in its remediation efforts as well as lost opportunity. C vs B For exposing the network of C, B should be brought before the bar of justice to ensure that such nefarious activity is not emulated. B, should be held administratively liable by C for endangering its network and the information contained therein. The Criminal liability of B could include violation of the provisions of Computer Misuse Act of 1990 (Parliament of the United Kingdom, 1990) which is enumerated below. “Computer misuse offences 1. Unauthorized access to computer material 2. Unauthorized access with intent to commit or facilitate commission of further offences 3. Unauthorized acts with intent to impair, or with recklessness as to impairing, operation of computer, etc. a. Making, supplying or obtaining articles for use in offences under section 1 or 3.” The wanton disregard of B for his actions in connecting to the network of freegames without thought or consideration to the consequence of his action should not be tolerated in law and by C itself. Lest they be held liable for any breach of security that would involve the personal information of C’s clients. It should be noted that B’s motive is for gain through nefarious activities, its commission of acts that violates the Computer Misuse Act of 1990 such as his access to the network of Freegames using the username and password combination of a legitimate user is an illegal act unto itself. B’s succeeding action such as obtaining the domain name that closely resembles Freegames is an evidence of a continuing crime and injustice perpetuated for the purpose of gain. The use of the free games to entice web server maybe a legitimate enterprise but its omission of certain morally and ethically tenable predicates should not be overlooked. Legal Advice to Freegames Freegames for all intents and purposes represents the interest of Freepcgames in the United Kingdom. It should therefore hold the rights to any and all items both tangible and peripheral that holds close proximity if not close resemblance to its company name and product. However, claiming these rights is not automatic and should not therefore be expected to be automatic by anybody. It is the responsibility of the owner of the property to protect his property from harm or anything that would cause injury to its name and reputation. Freegames, should therefore secure any and all derivatives that is similar if not have close proximity or resemblance to its company name and brands. Freegames, should likewise state in its Terms of Reference and Service Agreement the responsibilities and culpability of all its users with regards to their username-password combination. To prevent future liabilities the manner in which agreement to the Service Agreement or Terms of Reference should be considered a step before the final confirmation of the membership. Other precautionary measures such as ensuring virus free games should also be a consideration in accepting games for upload to its subscribers. Freegames even though it offers free download, has the fiduciary responsibility to make all of its free services not infected by viruses or any attachments that may cause harm to its subscriber’s network. It should be noted that service providers who offers services for free are are not exempt from liability should harm or damage occurs to the person or party it is servicing for free. This responsibility stems from the fact that an acceptance of service even for nominal if not free consideration is a contractual obligation unto itself. Freegames for its part should consider additional security checks that would confirm the identity of its subscribers most especially for transaction that would involve commercial consideration. This is a precautionary measure that is designed to ensure that the identity of the person holding the username-password combination is indeed the owner or the subscription. Should any dispute arise for any transaction the confirmation of the identity shall protect Freegames from any lien or culpability because the transaction has been confirmed through the verification routine provided thereon. Conclusion Freegames despite its efforts to protect itself and its subscriber from identity thieves and fraudulent transactions remains helpless to subscribers like A, who are not as conscientious with regards to the protection of their rights. A’s, action or the lack of it may be considered as the actions of a normal individual, and Freegames being the party who has more understanding with regards to the use and protection of identity should initiate and provide room for subscribers such as A who is not as protective of its identity. B’s acts should not be countenanced as well, since his acts represent what a normal enterprising person can do but despite of this, B’s act should not be tolerated as well. Taking advantage of the situation in order to gain from helpless victims such as A and Freegames, B should prosecuted and charged before the bar of justice to ensure that such acts or violations of the law shall not be allowed to permeate. B’s succeeding actions that would include signing to gain at the expense of another person in this case Freegames. Not only did B violate the confidences of A, B also violated what is moral and ethical in the practice of business in the United Kingdom. Bibliography Hansard, L. (2004, May 17). Fraud Law Reform. Retrieved June 25, 2011, from www.parliament.uk: http://www.publications.parliament.uk/pa/ld200304/ldhansrd/vo040517/text/40517-47.htm Parliament of the United Kingdom. (1990). Computer Misuse Act of 1990. Retrieved June 25, 2011, from Legislation.gov.uk: http://www.legislation.gov.uk/ukpga/1990/18/contents Parliament of the United Kingdom. (1998). Data Protection Act of 1998. Retrieved June 25, 2011, from legislation.gov.uk: http://www.legislation.gov.uk/ukpga/1998/29/contents Parliament of The United Kingdom. (2000). Electronics Communications Act of 2000. Retrieved July 11, 2011, from Legislatrion.gov.uk: http://www.legislation.gov.uk/ukpga/2000/7/contents Parliament of the United Kingdom. (2006). Fraud Act . Retrieved June 25, 2011, from Legislation.gov.uk: http://www.legislation.gov.uk/ukpga/2006/35/notes/contents Parliament of the United Kingdom. (2000). The Consumer Protection (Distance Selling) Regulation 2000. Retrieved July 10, 2011, from Legislation.gov.uk: http://www.legislation.gov.uk/uksi/2000/2334/contents/made Parliament of the United Kingdom. (2006). UK Public General Acts. Retrieved June 25, 2011, from Legislation.gov.uk: http://www.legislation.gov.uk/ukpga World Intellectual Property Organization. (1996, December 20). WIPO Copyright Traety. Retrieved July 10, 2011, from WIPO : http://www.wipo.int/treaties/en/ip/wct/trtdocs_wo033.html Read More