Legislative Compliance of Sales on the Internet - Case Study Example

How Businesses Comply With Legislations Regarding Sales Over The Internet. Buying and selling on the internet from a computer, digital TV or mobile phone is a method that proffers expediency, a much wider choice compared to conventional shopping and selling channels, very competitive prices and very easy access to information about what is available.  Many companies have initiated new strategies Vis – a – Vis the internet consumer strategy in order to augment consumer confidence by creating the necessary web pages to facilitate internet shopping; by the promotion of relevant codes of practice and by introducing mechanisms for the easier settlement of disputes that may arise (Distance Selling Regulations & E-Commerce, 01 September 2005). E-Commerce is the new way of doing business in today’s world of the internet. It allows vendors to utilize several convenient channels in order to deliver products and any necessary information directly to the customer. It does this at a lower cost than the conventional methods. The benefit to the consumer is the obtention of numerous choices for purchasing goods and services without restrictions of time and space. This new way of buying and selling has not only had influence on the people’s way of living, but has also made them to adapt to novel behavioural methods in order to use such technology in their day to day life. However, several legal issues have arisen due to the lacuna in many of the existing legislations, which had not been drafted with the considerations of electronic transactions that deal the buying and the selling of intangible products via non-physical border networks (Kwok, Yang and Tam, 2004). Distance selling regulations are those that protect people who make purchases by phone, e – mail, internet or digital television. The protection offered to consumers is first, the right to obtain unambiguous information about available goods and services; secondly, written confirmation of such information; thirdly, provision of a seven working day period within which a consumer can rescind the contract and lastly, protection from credit card fraud (The Consumer Protection (Distance Selling) Regulations 2000, 31st August 2000). In addition, E – commerce Regulations make the EC Directive on E – commerce into UK law. This Directive requires Member States to guarantee that contracts can be completed electronically. On the 21st of August 2002 The Electronic Commerce Directive & The Electronic Commerce (EC Directive) Regulations 2002, brought into UK law most of the provisions of the Electronic Commerce Directive 2000/31/EC (The Electronic Commerce Directive & The Electronic Commerce (EC Directive Regulations 2002). In order to start an e – commerce business first a domain name has to be registered. This offers the functionality that a Post Office Box number does, on the internet. A domain name allows customers to obtain contact information and information about the business being conducted. Since, the internet is the playing field of the world, it is essential to reserve the business domain name immediately. This prevents someone else from registering that particular domain name. A business name is selected because it not only describes what the business is about but also because it creates a favourable impression in the minds of the public. This principle has to be extended to the selection of a domain name also. If an independent domain name has not been used then the search engines that customers generally use to find web sites selling what they want to purchase on the internet, will not even consider ranking these websites (Forming UK Company Service, n.d.). Domain names are set up as a series of character strings separated by periods. They are hierarchical and the top-level domain name will remain at the right end of the name next to the suffix and sub-domains will be added to the left. The various top – level domain names are: com - for commercial use .edu -- for educational organizations .org -- for non-profit organizations .mil -- for the military .net -- for network providers, and .gov -- for government agencies (Obringer, n.d). Protection of intellectual property of online content is achieved by the use of watermarking, which protects electronic media data from re – use if it has not been cited appropriately. It enables the assertion of ownership, verification of authenticity and integrity, content labelling, usage control and content protection. Another method employed is the use of digital encryption, whereby digital contents are protected by the use of encryption. With the use of very strong 128 bit encryption, which is available nowadays, this has become a fairly effective method of ensuring content protection. When digital watermarks are used for intellectual property protection, many electronic commerce applications are benefited, and they include the online and offline distribution of multimedia content, broadcast services, document verification, ownership identification and so on. This technology also benefits content creators – artists, authors, and movie studios; content providers – photo stock archives, libraries, and professional photographers; electronic commerce and graphics software vendors; and manufacturers of digital still images, video cameras and digital video discs (DVDs) (Kwok, Yang and Tam, 2004). Defamation is defined as an injury to the reputation or character of a person, arising as a result of another person’s actions. Defamation is an attack on one’s good name, which is regarded as a proprietary and not a personal interest. It can also be stated that defamation is an improper and unlawful attack against one’s proprietary right to good name and reputation (Hurd, David. n.d). It should always be borne in mind that the owners of web pages are potentially liable for the contents of what is posted. They might be aware that certain people post defamatory remarks, but they may not have the software or capacity to deny such people access to the web pages. If such material continues to be posted with the knowledge that the material is being posted by a particular person, then the owner of such a web site is liable for its content. The web site owners have to maintain logs of messages which they wish to store. Persons posting messages on the internet should be aware that the world of the internet is a public forum and that one cannot say what one wishes without having to face the legal consequences. In Godfrey v. Cornell University/Dolenga, Godfrey alleged that several defamatory messages about him were posted by a Cornell University graduate and Canadian citizen Michael Dolenga using Cornell as the Internet Service Provider. Godfrey sued and won against Dolenga and the Cornell University, England. In Cubby v. CompuServe, 1991, the Company CompuServe was sued for a message that had appeared in a local newsgroup. The work of editing and posting information had been given to another Company by CompuServe and this is what it stated in its argument, it also argued that like a newspaper vendor it had no control over the content posted by the newsgroup, the court accepted this argument. In Stratton Oakmont v. Prodigy, (1995), a defamatory statement was made in a local news forum, even though Prodigy had employed relevant personnel to remove material after it was posted. Prodigy was held to be guilty of having published a defamatory statement, because Prodigy had advertised itself as a family orientated computer network, which would control and prevent the publication of inappropriate messages. As it had by this statement assumed responsibility for the site it was obligatory on its part to prevent the publication of defamatory statements. Certain unacceptable behaviour in respect of the internet is the violation of the etiquette of the internet. Further, certain highly despicable activities which are unacceptable comprise of spamming or the sending of advertisement material to people with whom one has no business dealings, spoofing or the act of using an invalid e – mail id so that the e- mail return email address is not the valid reply address of the sender, in this category one also comes across e – mail messages that do not contain sufficient information to enable the receiver to identify the sender. Passive spamming is the act of advertising a website hosted by a Company by spamming from some other source; trolling or the posting of controversial messages in newsgroups to generate responses; mail bombing or the act of engulfing a user with email without any intention to correspond with that person or the sending of large or multiple files to a user; generating a higher volume of outgoing mail than is normal; propagating and perpetuating chain letters and subscribing a person without his permission to an electronic mailing list. A message sent to a recipient without his request for the same is considered to be unsolicited. Making an email address available to the public does not constitute a request to receive messages. Distribution of mass emailing programs is also prohibited. All recipients on a mailing list must have personally subscribed. Mailing lists may not be used to distribute unsolicited email. If one is repeatedly mail bombed or attracts such behaviour, the Services will be terminated. One should not send emails to any user who does not wish to receive it, either at the Company or elsewhere. The Company recognise that email is an informal medium; however, you must refrain from sending further email to a user after receiving a request to stop. The Client’s obligations are that the Client is responsible in all respects for the content of its Web Site and the Web pages should not and will not violate any applicable law. At all times it has to comply with the provisions of the Acceptable Use Policy. The Client has to obtain and he will be responsible for obtaining and complying with all the required legal permissions for any works included on its Web pages. The Client has to provide the Company with material and data in the form required by the Company. If the Client fails to do so then the Company shall be entitled to make such charges as it may deem necessary to recoup its expenses in conversion to or use of other software so as to be able to host the Client's Web Site. A Client’s web page liable to offend or containing links to adult material must display a warning message so that on any path of links from the index page of any directory to such material. This is in order to ensure that everyone following such a path will receive a clear warning before the material is displayed as to the nature of its contents. The Client has to perform backup of its files as the Company does not offer recovery facilities as a service to the Client. Backup facilities are provided on all hosting packages provided by the Company. Further, the Client has to provide the Company, upon registration, its latest administrative address and also the address of a contact person authorised to accept service of proceedings on its behalf. On the other hand the rights and obligations of the Company are that The Company has to make reasonable endeavours to give the Services and provide the Client with a user identification and password for the Web Space, within a reasonable period of time, for administration purposes. The Company usually will not hold itself liabile for any loss incurred as a result of disclosure of the Clients' password. The Company does not give a warranty that its services shall be provided without interruption or that these services will be free of errors. If access to the Client’s Web site exceeds the permitted bandwidth or the storage allocation then the Company shall be entitled to suspend access to the Client's Web Site; shift the Web Site to a higher performance service or ask the Client to move its Web Site to another server; increase its charges proportionate to the additional bandwidth being used by the Client. Irrespective of any other provision to the contrary, the Company shall at all times be entitled to change the bandwidth or storage without giving notice to the Client. It also reserves to itself the right to make such changes as are necessary to comply with the requirements of safety, security or statutory requirements. The Company reserves the right to modify the user’s site, suspend or terminate the contract if in its opinion the service or services are being used in contradiction of any UK laws and also it “reserves the right to suspend services to any Client, who's use of the service affects or is likely to affect other Clients, the server or the network”. (Terms & Conditions. n.d). The various legal issues involved in respect of Web sites are given in the sequel. Copy right infringement is said to have taken place if any one of the following rights have been violated, these are the right to prevent others from reproducing a work, publicly display of a work, distributing copies of a work, performing a work and preparation of derivate works. Domain names consist of two levels the top level and the second level domain name. These names are administered by Inter Nic If one’s corporate name or trademark has been appropriated for a domain name, usually there is no remedy, and occasionally it may be possible to contest a registered domain name through the inert NIC’s domain name dispute policy. The domain name should be registered using the online form available. Due to the multiple domain names available it is advisable to register for multiple top level domain. Trademarks are words, images, slogans or other devices designed to protect the goods or services of a particular party. ”Web page designers should avoid trademark usage that might cause confusion among viewers as to the source or sponsorship of the web page. Such use might well constitute trademark infringement.” In respect of linking and framing concerns it has to be remembered that Links between pages are the rationale behind the very existence of the World Wide Web. The existence of the World Wide Web is dependent on widespread linking. All the same, the legality of such connections is sometimes suspect and inclusion of links to other web sites without permission of their owners is an infringement of copyright law. The use of a link to claim others work as one’s own is violative of law (Web Site Legal Issues, n.d). The wide spread proliferation of the World Wide Web has brought in its wake a lot of monumental changes. The world has literally shrunk and is well on its way to becoming a global village. Similarly, selling and buying entails nothing more than the possession of an internet connection. Business, financial transactions like funds transfer, banking transactions and the like have all become online. The convenience is very much evident, but with this benefit has also come the very great danger of falling victim to cyber criminals. Such crimes can be controlled by the use of proper safety methods like digital encryption, use of public and private keys, etc. The need of the hour is a uniform law throughout the world so that cyber criminals get their just desserts. In conclusion, it can be stated that this method of conducting business is very convenient and progressive. References. Cubby v. CompuServe:. Cubby, Inc. vs. CompuServe Inc.,1991. 776 F.Supp. 135(SDNY 1991). Distance Selling Regulations & E-Commerce. 01 September 2005. Retrieved on 25th March 2006, from http://www.dti.gov.uk/ccp/topics1/ecomm.htm Forming UK Company Service,(n.d). Retrieved on 25th March 2006 from http://www.info@ukincorp.co.uk? Godfrey v Demon Internet Ltd, QBD, [1999] 4 All ER 342 Hurd, David.(n.d). Defamation. Employee Survival Handbook. Retrieved on 25th March 2006, from http://www.faceintel.com/defamation.htm. Kwok, S.H, Yang, C.C and Tam, K.Y, 2004. Intellectual Property Protection for Electronic Commerce Applications. Journal of Electronic Commerce Research, VOL. 5, NO. 1, 2004. Obringer, LeeAnn. (n.d). How Planning an Online Business Works. Retrieved on 25th March 2006, from http://money.howstuffworks.com/online-biz-planning2.htm. Stratton Oakmont, Incorporated vs Prodigy Services Company, 24th May 1995. Index Number 3-1-0-6-3 slash 94, New York Superior Court. Terms & Conditions. (n.d). Retrieved on 25th March 2006, from http://www.absolutedomains.net/terms.html The Consumer Protection (Distance Selling) Regulations 2000. (31st August 2000). Statutory Instrument 2000 No. 2334. Crown copyright 2000. The Electronic Commerce Directive & The Electronic Commerce (EC Directive) Regulations 2002. Web Site Legal Issues, (n.d). Retrieved on 25th March 2006, from http://www.bitlaw.com/internet/webpage.html Read More