Any company conducting e-commerce with consumers in the United States must follow the applicable U.S. Internet laws. Otherwise, the company and its managers may face civil liability and criminal prosecution for violating U.S. laws. However, in the event that a business’s website is also accessible internationally, that business may also need to comply with applicable international Internet and business regulations.
Online businesses should be aware of issues relating to contracts, intellectual property violations (e.g., patent, trademark and copyright), email, spam, antitrust, privacy issues, affiliate marketing programs, online fraud, cyber piracy, cloud computing, cybersquatting, compliance and regulatory actions. For example, if a business uses an image or text on its website, it must ensure that doing so does not violate any copyright or trademark laws.
There are also jurisdictional considerations affecting websites in American and international markets. Different countries have different approaches for determining whether respective courts have jurisdiction over Internet material. Generally, jurisdictional considerations will take into account the physical locations of parties. Although, a website is not a physical being, it nonetheless maintains a physical presence in its operations. As such, an Internet transaction over a website may implicate three different jurisdictional laws: (1) the laws that apply to the user’s physical location, (2) the laws that apply to the server’s physical location, and (3) the laws that apply to the business’s physical location. In the event that a business does not maintain any physical location, courts will look to the owner or manager’s location, or the location of any warehouse that helps facilitate business. For instance, websites such as Amazon and eBay may charge a sales tax on an online transaction if such a company maintains a physical presence in a jurisdiction that charges sales tax. In February 2, 1998, in an effort to help facilitate online business, U.S. Congress passed the Digital Signature and Electronic Authentication Law (“SEAL”). SEAL provides for legal recognition of electronic signatures sent over the Internet to complete transactions. As such, SEAL expands online business, making it easier for consumers and merchants to conduct business entirely online.
American Internet laws also provide for a new realm of crime involving the Internet. For example, in some jurisdictions, spam is against the law. Accordingly, a business that solicits consumers through bulk email may face civil liability. The CAN-SPAM Act attempted to regulate Internet spam, but fell short because it failed to prohibit many types of email spam. However, the law in this area is still developing since the Internet is a relatively new paradigm, and the laws that apply to websites and online businesses are still shifting.
Even though there is no international Internet convention at this time, however, several related conventions, treaties and agreements do exist. For example, the United Nations Convention on the Use of Electronic Communications in International Contracts, Council of Europe Cyber-Crime Convention, World Intellectual Property Organization Treaties, and Hague Choice of Court Convention are amongst the more prominent organizations.
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