Articles Posted in E-commerce

Published on:

Last week we discussed smart toys, and we mentioned “COPPA” in that article.  As such, some of you may be asking what is COPPA?” In short, COPPA is a federal law specifically tailored towards children, and stands for “Children’s Online Privacy Protection Act.” This law is meant to protect children from over exposure and prohibit businesses from gathering invasive amounts of analytics on children using their products or services. This remains a legitimate concern, attempting to curtail some of the worst aspects of online life.  What exactly does COPPA prohibit? Is there any limitation? Does it provide guidelines for a business to follow and ensure compliance?

COPPA Prohibitions

The spirit of COPPA can be summarized as follows: It is unlawful for an operator or a website or online service directed to children or with knowledge that it is collecting or maintaining a child’s information, to violate this federal statute by failing to give notice on the website of what information it collects, how it’s used, and how it’s disclosed, failing to obtain parental consent, providing reasonable means for parents to review or cancel the use of the service or website, to not condition participation in a game, offering of a prize or other activity by disclosing more personal information than is necessary, and failing to establish and maintain procedures to protect the confidentiality, security and integrity of the children’s information.

Published on:

We have finally reached December, and with it, comes the time for shopping. Of course, some people will focus on the youngest members of their families – i.e., children.  However, it needs to be emphasized that even with children, there are special concerns. The law considers juveniles and their decision-making capabilities, and in the age of the “smart toy,” this could have far ranging impacts on businesses and the emerging market. What is a smart toy? How might it differ from an average toy? What would a business need to be aware of?  What about a parent?

Smart Toys

Smart toys, alternatively known as “connected” toys, are those devices that can be used for play, but also connect to the internet or cloud.  This concept may sound like the internet of things–and these smart toys are just another part. A good example of this may be something like the “Hello Barbie” dolls from 2015. These dolls were akin to a smart chat program, or a more personable Siri/Cortana/Alexa. While Barbie’s operating system would not allow her to break significantly off a script, she would remember and adapt to a child’s thoughts, concerns, or desires.

Published on:

In a current dispute between Google and a Canadian company over de-indexing a competitor, Google is doing everything in its power to avoid the court order. Not necessarily because it believes in the innocence of Datalink, but because to de-index would be removing an important immunity under current U.S. laws. One may be wondering, what was the immunity that prompted Google’s move? Why could it just pick up and go somewhere else? Should other businesses be concerned for this possible loss of immunity, and why might a business support Google here?

Case History

Equustek Solutions, Inc., a Canadian company, engaged in litigation with Datalink due to illicit activities on Datalink’s part (e.g., misappropriation of trade secrets) and using those trade secrets to confuse consumers in the market. Due to the similarities resulting from the alleged misappropriation, Datalink led consumers to believe that they were purchasing Equustek’s products. Equustek then sued in Canadian courts, resulting in various court orders against Datalink. However, Datalink managed to evade enforcement by fleeing the country and setting up shop somewhere else.

Published on:

The European Commission released its first annual review of the current EU-US Privacy Shield in order to determine what may or may not need changes as a matter of policy. As it currently stands, the Privacy Shield creates enforceable protections for European Union residents regarding the use of their personal data. The US-based entities that wish to participate will have to conform to greater transparency standards in how the data is used, as well as submitting to strong oversight to ensure adherence, and increased cooperation with Data Protection Authorities (“DPAs”). So, what changes are suggested in this new report? How might this affect businesses in the United States? What consequences, if any, may be added to the new changes?

What is the review?

It was conducted by the Commission to the European Parliament, which in essence reviewed the function of the Privacy Shield and gathered input from publicly-available sources. These sources combined press releases as well as legal cases that were available to the Commission; although, neither source was cited specifically within the seven-page report. The Commission is composed of both European and American representatives, such as the European Data Protection Supervisor and Federal Trade Commission.

Published on:

In general, internet commerce transpires on the national and international levels. Naturally, data protection is an important concern for private and public agencies.  The European Union’s remaining members are currently in the process of another process to protect data with the “General Data Protection Regulation” (GDPR) set to take effect next year. This differs from the previous Privacy Shield in some respects, as it is broader, and expands beyond the European Union and deals with any individual that may have a shred of a connection to the European Union. So, what is GDPR? What does it require? Also, what are the consequences for non-compliance?

What is the GDPR?

The GDPR grants the following as rights to a data subject (i.e., a user): breach notification; right to access a copy of personal data free of charge in electronic format; right to be forgotten; data portability, allowing transmission to another provider; privacy by design for systems; and data protection officers in cases where constant monitoring of data subjects on a large scale may occur, or for special categories of data regarding criminal convictions.

Published on:

Now, aside from Bitcoin and other digital currencies spawning from video games and consumer-oriented companies, it’s important to be aware that there are other types of digital currencies or so-called “cryptocurrencies.” These operate more similarly to Bitcoin in how they generally lack a centralized system that assigns value (compared to other digital currencies like virtual item trading where the items are managed by a company) and has a similar mining protocol allowing individuals to mine the currency.  Indeed, even Bitcoin had a “split” changing from one cryptocurrency to two. Why are there even alternatives? What features does one cryptocurrency have on the other? How should one evaluate the choice to enter a cryptocurrency market?

Bitcoin’s Split

In order to make Bitcoin more accessible, the system administrators for Bitcoin and other individuals prominent in the community underwent a “split” of the currency, as well as other changes to increase the speed of transaction verification. Due to the limits put in place to make Bitcoins scarce and limit the supply, the effective limit had placed a curb on growth. In response, some users chose to take a split after starting in August of this year to create a new cryptocurrency working mainly on the same system as Bitcoin, but with the ability to convert it to “bitcoin cash” and a faster mining and verification process. This would mean that Bitcoin cash would have a lower face value than Bitcoins, as they would be more plentiful. However, this would also make it potentially less secure as the blocks would grow in maximum size, and it would have a shorter history compared to Bitcoin.

Published on:

The legality of certain virtual currencies can be murky.  While some currencies, like Bitcoin, can be readily traded for goods and services, however, other virtual currencies remain where regulation is more questionable. To that point, the curators of digital economies have hired economists to better model the value of these digital commodities, creating a sort of virtual currency by accident.  However, the ecosystem behind these virtual currencies has exploded and led to new questions regarding their use and potentially illicit activities. So, what are these virtual commodities? How did they gain value? What is being done to curtail the murkier aspects?

What are these virtual currencies?

A good example of these virtual currencies comes courtesy of Valve, a company that both creates and distributes video games. For the purpose of creating more income for some of their “free-to-play” games, random prizes are given out, and can be earned in-game, and later resold via its platform. These items generally have no in-game function, and merely provide an aesthetic value. For a select few Valve games, these items can then be exchanged between players, or for currency in Valve’s store. In essence, the items can function much like tickets in an arcade, or more concerning, poker chips in a casino. Other games have similarly created digital currencies that can be shifted easily from a “real” currency to something that can be used (though not necessarily benefit) the person in game.

Published on:

Bitcoin is a cryptocurrency that has been in the news and in conversations recently for various reasons. While not all retailers will take Bitcoin, and there are fairly good reasons not to, but the cryptocurrency has really taken off.  However, despite how much the word “Bitcoin” is used, the nature of the virtual currency provokes a sort of air of mystery. Unless one researches how to find or buy it, it remains a type of investment that is more exotic than what is commonly available to consumers. Why is Bitcoin so expensive? How does one find and buy a Bitcoin?

Why is Bitcoin expensive?

To properly explain Bitcoin, it’s important to restate one of the fundamentals of economics. The value of a commodity is determined by supply and demand. When it comes to currency specifically, this translates to “the more common and easily- obtainable the currency is in the market, the price will become less in the market.” This is what’s referred to as “inflation.” The purchasing power of a currency goes down because there is more of that currency.

Published on:

Net Neutrality is the principle that Internet Service Providers (ISP) and the government should treat all web-related traffic equally regardless of the source. If there was no net neutrality, companies would have the ability to purchase priority access to the ISP customers. Larger and wealthier companies (e.g., Google) would be able to pay the ISPs to provide customers more reliable access to their websites instead of to competitors’ websites. This would negatively impact any new start-up service that would not be able to purchase a priority access.

On February 26, 2015, the Federal Communications Commission (FCC) voted to enact the “strongest net neutrality rules in history.”  Millions of Americans contacted the FCC, called their Congress members, and wrote to the White House to express their support.  Although, this decision was a bold move in favor of net neutrality, but more changes may be coming soon. This 2015 Rule meant that ISPs cannot block access to any websites and they cannot interfere with website loading speeds. This rule also banned paid prioritization, which means that ISPs are not able to give preferential treatment to websites that pay an additional fee.

On January 23, 2017, President Trump selected Ajit Pai to lead the FCC as the new Chairman. This Chairman has a record of previously promising to undo the 2015 landmark decision. Then on May 18, 2017, the FCC, led by Chairman Ajit Pai, voted to propose a review of the 2015 rules.  Mr. Pai holds the opinion that the 2015 FCC rules are a “bureaucratic straitjacket” on the ISPs.  The new FCC proposal, which is called “Restoring Internet Freedom” contemplates whether to undo the legal approach that enforced those rules and whether there was anything that warranted the rules in the first place.

Published on:

After this month’s discussion on the statutes that prohibit the unauthorized access of email accounts and digital assets, one might wonder how these statutes may apply in a case. However, in the lengthy saga of Facebook v. Power Ventures, the Ninth Circuit issued a determination giving a bright line example of what would not be permissible under the law. So, how did Power Ventures violate these unlawful access laws? How did they attempt to move around the laws? What was Facebook’s argument, that has thus-far prevailed in the courts?

Case History

This case focuses on Power’s use of Facebook through the actions of other users.  Power, a type of social media aggregator, would allow users to “link” Facebook, Twitter, and other social media accounts to permit control from a single website.  From there, Power would “scrape” data under the permission of the Facebook users.  However, this was against Facebook’s terms and conditions.  Power would also invite users to invite others in spam-like messages, as well as deploying bots.  This ultimately resulted in an IP-based ban against Power. Yet, Power evaded those bans and defied a cease and desist letter, prompting Facebook to sue based on CAN-SPAM, Penal Code 502, and CFAA.