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E-commerce Transactions

The phrase “e-commerce transactions” invokes thoughts of a complicated and technical phenomenon.  In fact, many people partake in e-commerce transactions every day.

What is an e-commerce transaction?

An electronic commerce (a/k/a “e-commerce”) transaction involves a commercial transaction that takes place over the Internet. So, any trading of products or services over any electronic network, including, but not limited to, the Internet, is considered a part of e-commerce. The e-commerce transactions covered by the term include, business-to-business, business-to-consumer, consumer-to-consumer, and consumer-to-business.  There are three categories of e-commerce transactions. There are agreements with: (1) Shrinkwrap terms—when a tangible product is delivered to a physical address usually in shrinkwrap or clear packaging; (2) Clickwrap terms—in which a digital product is delivered over a network (e.g., e-book); and (3) Browsewrap terms—when terms are agreed to in order for a consumer to access and use a website.  However, e-commerce does not always involve actual money.   The transaction can involve e-cash, digital currencies (e.g., Bitcoin), or services.

What problems face e-commerce transactions?

The problems facing e-commerce transactions involve many of the same issues business transactions face. They can include contract breaches, copyright issues, and governmental regulations. One of the main issues involves jurisdiction over disputes. E-commerce transactions have become so accessible that cross-border transactions are normal. Cross-border transactions involve state-to-state transactions and country-to-country transactions. This means that multiple states may have jurisdiction if there is a dispute, but also calls into question which national or international regulation is applicable. Another issue is the ability to track down intellectual property (e.g., copyright, trademark, patent) violators. For example, the intellectual property violators can upload files to a third-party website that resides outside of the United States. They can also use certain programs or applications (e.g., TOR) to remain anonymous. A company may become liable for sharing or disclosing confidential information of its customers with third parties. A company can be liable for trademark infringement if it violates a third-party’s trademark. Also, if the company registers a domain name (e.g., XYZ.com) that correlates with a registered or common law trademark (e.g., XYZ) it may be subject to a complaint under ICANN’s Uniform Domain Name Dispute Resolution Policy (UDRP), or the Anti-cybersquatting Consumer Protection Act (ACPA). Finally, aliases and privacy laws may cause challenges in locating the violators on the Internet and filing lawsuits in the proper jurisdiction.

An example of an e-commerce transaction that involved issues of jurisdiction and freedom of expression is Yahoo!, Inc. v. LICRA.  In 2000, a lawsuit arose in France against Yahoo due to the selling of Nazi memorabilia on its network.  The French court decided it had jurisdiction over Yahoo and that it could block 70-90 percent of the French public from accessing its network because the selling of Nazi memorabilia conflicted with French laws.  Although, Yahoo has allegedly changed its policies since this case, however, it has made attempts to appeal the ruling in California and argue over jurisdiction. This case demonstrates that when a business engages in online transactions within different states or nations, then multiple states or nations can claim jurisdiction and leave it vulnerable to legal liability.

At our law firm, we assist clients with legal issues related to Internet, technology, and e-commerce transactions. You may contact us to set up an initial consultation.