E-Commerce And Legislation
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- Word count: 6768
- Category: E-Commerce
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I. Legislation & interpretation
The Electronic Commerce Act, 2000, S.O. c17 (ECA), 2000 is an Ontario statute in force since Oct 16, 2000 , intended to regulate and secure electronic commerce (e-commerce) transactions within the country and across its borders. E-commerce is defined as the complete set of processes that support commercial/business activities on a network. It encompasses a wide range of business activities and processes, from e-banking to offshore manufacturing to e-logistics. These include information analysis, credit cards, Automated Teller Machines (ATM), telephone banking, enterprise resource planning systems (ERP), data mining, data warehousing, and “Web commerce” (the purchase of goods and services over the World Wide Web usually with secure connection (HTTPS, a special server protocol that encrypts confidential ordering data for customer protection), with e-shopping carts and with electronic payment services, like credit card payment authorizations.
The ECA was passed by the 37th Legislature, 1st Session. It was introduced as Bill 88, “An Act to promote the use of information technology in commercial and other transactions by resolving legal uncertainties and removing statutory barriers that affect electronic communication.” The First Reading was Tuesday, June 13, 2000, and the Second Reading Wednesday, June 21, 2000. It was evaluated by Committee on Tuesday, October 03, 2000, and was read a Third time on Tuesday, October 10, 2000. It attained Royal Assent on Monday, October 16. 2000 .
The ECA gives to electronic transactions the same validity as paper transactions. “Electronic” includes created, recorded, transmitted or stored in digital form or in other intangible form by electronic, magnetic or optical means or by any other means that has capabilities for creation, recording, transmission or storage similar to those means. Any legal requirement that writing be used, that form be available in a certain form, that a document be signed, or an original document provided or retained is satisfied if certain general criteria of consent, reliability, availability, and subsequent usability. The Act confers this status of electronic communications by eliminating any invalidity or unenforceability by reason only of the information or document being in electronic form.
Usage of the Act
No one is required to use the ECA , provide or accept documents or information in electronic form without their consent . The absence of consent by a party may invalidate a contract based entirely on an electronic document. However there are provisions for implied consent based on a person’s actions (Section 3 (2)).
The ECA also applies to public as well as private bodies, and so regulates municipalities and regional government interactions with taxpayers and among themselves (Section 3(3)). These interactions are sometimes referred to as e-Government (from electronic government, also known as e-gov, digital government, or online government refers to government’s use of information and communication technology (ICT) to exchange information and services with citizens, businesses, and other arms of government. e-Government may be applied by legislature, judiciary, or administration, in order to improve internal efficiency, the delivery of public services, or processes of democratic governance.
The primary delivery models are Government-to-Citizen or Government-to-Customer (G2C), Government-to-Business (G2B) and Government-to-Government (G2G). In the case of municipalities no implied consent (Section 14) , Additional conditions on electronic databases (Section 15 (1)) , documents and electronic signatures (Section 16 & 17) , and regulations for the use of electronic payments (Section 18) . No implied consent means that the government must explicitly communicate with relevant parties and obtain consent. The ECA enables the government to create and maintain electronic databases for the conducting of e-commerce. The municipality can accept information for the database only if the electronic document provided meets current accepted technology standards, and when it receives the document it must acknowledge receipt so that the sender can know that the transaction has been correctly completed.
The municipalities are able to accept electronically signed documents if their meet current technology standards of the public body, and is confirmed as reliable. An electronic signature is the symbol of any letters, characters, numbers or other symbols in a digital form logically linked with an electronic record. It includes digital watermarking, handwritten signatures of scanned images, digital signatures, and biometric signatures as the symbol of electronic signature.
In discussing “electronic signatures,” one should note the important distinction between this term and “digital signatures.” As mentioned, any electronic sound, symbol or process may be deemed an electronic signature if the requisite intent to sign is present. Digital signatures, on the other hand, are technology specific forms of electronic signatures, which offer additional advantages such as authentication and encryption. Documents executed with digital signatures provide greater assurance of the identity of the signatory and are more difficult to alter and forge.
Finally the ECA allows governments to accept electronic payments as well.
Requirements for documents
The ECA establishes a series of rules for substituting electronic functional equivalents in place of traditional contract requirements such as signatures and the provision, retention and examination of documents in writing, including originals (Section 5). The “location” for an electronic transmission is the place of business or, if none, residence of an individual, when it is sent is defined by when it leaves the sender’s control and its receipt is when it is capable of being retrieved and processed by the recipient regardless of whether this is actually done. , , , The electronic substitute for the written document must be accessible to both parties to a transaction for subsequent reference and be capable of being, although not actually, retained by the receiving party.
Section 8.1.a of the ECA requires “reliable assurance as to the integrity of the information … from the time the document … was first created in its final form.” This applies to both the contract document, as well as the electronic signature integrity (unaltered document) (Section 8.2.a & Section 11(1) . However the precise technologies acceptable for each are not defined in anticipation they will evolve. This however may create ambiguities in the future that will require court action. Finally although the electronic document is accepted as though it were a written original, it is not considered to be the same as the original and so its status as a personal or business property is different (Section 8.4.).
Electronic transactions can involve electronic funds transfer, supply chain management, e-marketing, online marketing, online transaction processing, electronic data interchange (EDI), automated inventory management systems, and automated data collection systems. ECA provides specific rules on the formation of documents used in the electronic transactions. Electronic contracts can be validated electronically, by executing an act that will lead to an electronic communication such as a mouse click. (Section 19 (1) a-c).
Such contracts can’t be negated only on the ground they were electronic, but if there was an error, and the receiver of the communication does not provide opportunity or time to correct the error, then the contract can be contests (Section 21(a-b)). However there is some obligation on the part of either party to notify one another of the error, and if meanwhile some action has been executed as a result of the faulty communication, the contract should be invalidated in a timely manner and the action reversed (Section 21 (c)) .
Where there are legal rules and principal is the retention of documents and records, the ECA sets out the situation and establishes rules for storing the information provided in electronic form. Where the rule of law already specifically requires electronic records to be retained, or where a government agency or organ of state has must be predetermined additional requirements, such requirements must be shown in the base rules. The Electron Transactions Act 2001 (ETA) definitely states that contracts must be formed electronically, unless the parties have agreed otherwise.
The main point of ETA legislation is that E-commerce is:
1. Subject to a limited number of mandatory provisions-those undertaking e-business are free to contract out of the Law since the Law is intended to provide a framework and certainty to the arrangement or transaction, but not to fetter the ways in which parties carry out legitimate e-business.
2. Electronic records are expressly given legal recognition.
3. Where a document has to be in writing for legal purposes, a document in electronic form will meet that requirement. However, wills are expressly excluded and other documents may be excluded by future regulation. At present, real estate documents are not excluded.
4. Subject to conditions, delivery of legal documents may be made electronically.
5. An electronic version of an original document may be used as evidence (including in court) of the original if the electronic version is an accurate representation of the original.
6. Subject to conditions, legal documents may be retained and made available for inspection in electronic form.
7. Contracts may be made electronically e.g. by exchange of emails.
8. An electronic record is attributed to the originator so considerable care will be needed by originators to ensure that they do not become legally bound inadvertently.
9. A change or error arising in an electronic message during transmission can have legal implications so acknowledgements of electronic messages, such as the time at which an electronic message is sent and received and the place at which an electronic message is sent and received are potentially very important with regard to jurisdictional issues surrounding the governing law and the correct forum for enforcement of a contract.
The ETA stipulates regulations to establish a code of conduct in relation to e-commerce service providers and intermediaries. Where there is consent, connivance, or neglect on the part of the director or officer of the organization, there is criminal liability. ETA gives general power to the government to make further regulations under the Law as the situation warrants. However there are limitations, such as a specific ban on regulations imposing a requirement for a third party with key depositing, and regulations for the scheduled time of an e-Business Advisory Board. Finally ETA adjusts other statutes in existence.
Carriage of goods in relation to e-commerce
When the e-cmmerce involves the transfer of goods or property additional ECA regulations apply (Section 23 (1)). The ECA stipulates rules for his section applies to anything done in connection with a contract for the following aspects of the carriage of goods:
(a) furnishing the marks, number, quantity or weight of goods;
(b) stating or declaring the nature or value of goods;
(c) issuing a receipt for goods;
(d) confirming that goods have been loaded;
(e) giving instructions to a carrier of goods;
(f) claiming delivery of goods;
(g) authorizing release of goods;
(h) giving notice of loss of, or damage to, goods;
(i) undertaking to deliver goods to a named person or a person authorized to claim delivery;There are three primary processes are enhanced in e-business.
(j) granting, acquiring, renouncing, surrendering, transferring or negotiating rights in goods;
(k) notifying a person of terms and conditions of a contract of carriage of goods;
(l) giving a notice or statement in connection with the performance of a contract of carriage of goods; and
(m) acquiring or transferring rights and obligations under a contract of carriage
Any of the actions listed above may be undertaken with the use of electronic documents (Section 23(2)). The only exception is the additional requirement that If the transaction involves the transfer of title of property or obligation, it still can be transacted with electronic documents as long as they are created by standard methods that are accepted as the legal transfer of property or obligation (Section 23(3)). For this all the other requirements for document and signature integrity apply. To avoid confusion the ECA also stipulates that if a transaction or contract has occurred through the use of electronic documents, they must first be terminated officially, before a new written document can be used in its place (Section 23(5)).
Electronic forms in relation to e-commerce
Electronic forms for the purpose of e-commerce must be resultated as well. The ECA stipulates that the government has the right to enact new legislation to define the rules for electronic transactions, and to establish a code of conduct in relation to e-commerce service providers and intermediaries (Section 24 (12-)). The details of how specific forms are to be executed and maintained are not defined in this Act, but this Act does enable the passage of other legislation to define them as needed, which would then be binding under the ECA.
Rules about the application of ECA
Since the use of e-commerce is not mandatory, the requirements of ECA are not mandatory, either. If other legislation exists that prohibits e-commerce in some area, the ECA does not have the power to allow it (Section 26(1-2). Neither does the ECA affect the requirement of the Freedom of Information and Protection of Privacy Act, the Municipal Freedom of Information and Protection of Privacy Act, or any other provision of law that is intended to, protect the privacy of individuals, or provide rights of access to information held by public bodies and similar entities (Section 27(1)). The ECA also does not authorize the destruction of written documents if electronic versions come into existence (Section 27(2)).
The ECA does not apply to the use of biometric information in lieu of an electronic signature, unless both parties have officially consented to its use (Section 29(1)). The ECA does not apply to elections (Section 30), Wills and codicils, Trusts created by wills or codicils, Powers of attorney, to the extent that they are in respect of an individual’s financial affairs or personal care, Documents, including agreements of purchase and sale, that create or transfer interests in land and require registration to be effective against third parties, and Negotiable instruments (Section 31(1)), and except for transfer of goods does not apply to exchanges of title (Section 31(2)).
II. Who is responsible for enforcing the law?
According to the Oxford Law Dictionary, legislation means the whole or any part of a country’s written law. Interpretation is the way words or sentences in a statute are interpreted in order to understand what might have intended by the passing a particular statute. Everyday, judges are faced with decision on ways to interpret statute. In doing this, they are deciphering the Parliament’s intention. The judges’ use guidelines that have been established, namely the literal rule, golden rule, mischief rule, and the purpose approach. Statutory interpretation is a matter of communication and non- communication. Parliament has the power to make laws and judges have the power to interpret them.
The Lieutenant Governor in Council is responsible for enforcing the law by designating entities or classes of entities as public bodies, prescribing documents or classes of documents for the purposes ofreliability requirements for electronic signatures, prescribing documents or classes of documents, requirements as to method for electronic signatures and information technology standards, prescribing seal equivalency requirements for electronic signatures for the purposes of e-government, and carriage of goods (Section 32).
Industry Canada is the primary government agency concerned with e-commerce in the nation. The Canadian Code of Practice for Consumer Protection in Electronic Commerce establishes benchmarks for good business practice for merchants conducting online commercial activities with consumers. The Code’s eight principles deal with topics such as online privacy, security of payment and personal information, unsolicited email, and communications with children.
There are a number of organizations in Canada whose purpose is to further electronic commerce and IT in Canada. Some of these organizations are: the Information Technology Association of Canada (ITAC), Vancouver-based Softworld, the Software Human Resource Council, and the Canadian Department of Foreign Affairs and International Trade. Also, volunteer executives from the public and private sector in Canada join together as members of Electronic Commerce Canada to network, share information, and discuss e-commerce ideas and initiatives.
Ebiz.enable is Canada’s e-business portal designed to guide commercial organizations through the issues and options encountered in implementing e-business strategies. Users will find tools to diagnose whether their company is ready for e-business, and information on where to start, what e-business can do, implementing e-business, assessing your business, what others are doing, and where to learn more. It encourages self-compliance with all existing statutes and makes it easier for businesses to check themselves against these statutes. Since the ECA is refers to the voluntary use of e-commerce technology it is not enforced in the same sense as a criminal law, and violations appear when there are complaints or problems occurring.
Information Security Service Providers (ISSP) are government established for the authorization and registration of providers of information security services and their service related conduct. In the case of a criminal prosecution or in the case of a civil suit, limitations of liability for e-commerce service providers and intermediaries are very wide. Any person who uses electronic means in providing real or personal properties is an e-commerce service provider.
The U. S. Electronic Signatures in Global and National Commerce Act (E-Sign) , was enacted to resolve the lack of uniformity among state laws and ensure the enforceability of electronic signatures and contracts in interstate and international commerce, regardless whether individual states adopt Unified Electronic Transaction Act (UETA). The Uniform Electronic Transactions Act (UETA) is one of the several Uniform Acts proposed by the National Conference of Commissioners on Uniform State Laws (NCCUSL).
Similar to ECA, Section 101 b of the ESIGN Act, preserves the rights of individuals to NOT USE electronic signatures. Sub-section (c) is in direct support of (b) by requiring a “Consumer Disclosure” that the signatory has consented to use an electronic format. Section 101(c)(1)(C) states that the consumer also “consent electronically, in a manner that reasonably demonstrates that the consumer can access information in the electronic form that will be used to provide the information that is the subject of the consent”. Seeking to preserve states’ rights, E-Sign includes complex and narrow “exemption to preemption” provisions, which allow states to opt-out of a major portion of E-Sign. States may opt-out by adopting the uniform version of UETA or alternative procedures and requirements, which are consistent with E-Sign (Section 7002(a)).
One of the significant distinctions between E-Sign and UETA is that E-Sign includes detailed consumer protection provisions not found in UETA. The unified ETA does contain more general requirements regarding the presentation of electronic records. If certain information is required by law to be provided, sent, or delivered in writing, an electronic record must be capable of retention by the recipient at the time of receipt to satisfy that law. Capable of retention includes the ability of the recipient to print or store the electronic record. Any specific format or presentation requirements specified in a law must also be complied with in the electronic record. If any sender inhibits the ability of a recipient to store or print an electronic record, the record is not enforceable against the recipient.
III.What does business need to do to be compliant with ECA?
Electronic commerce has its share of headaches, some pertaining to organizational resources and others to site localization. Thus the business owner must arm himself with patience before enjoying a return on his investment. The success of this kind of adventure rests primarily on the commitment of the manager and employees to gradual implementation, from the viewpoint of developing both the Web site and the market. To remain in the race, the company must adjust its strategy regularly according to the results and the comments of Web surfers and traditional customers. At the same time, while remaining simple, the site must respond to the new and inevitable requirements of globalization.
E-business decisions must be based on expected Return on Investment (ROI). To be successful in e-business the business must develop a strategy. Some questions that should be answered include :
1) Which business processes currently offer the greatest opportunity for cost reductions, efficiency gains and increased profitability?
2) Where can my business gain a competitive advantage over my competitors?
3} What areas cause my organization the most problems with respect to customer service and satisfaction?
4) Is senior management (or the necessary people/person) committed to implementing this solution? Are they willing to champion the initiative within the organization?
5) How will the e-business solution alter the basic structure of my organization? What changes in staffing, skills and communication/ information flows could potentially result from this exercise?
6) What training will be required to ensure that employees are able to maximise the potential benefits of this solution? How can I involve them from the start so as to maximise employee input, education and commitment?
7) What is the potential ROI? How does this compare with other investment options?
To execute a successful e-business initiative a business needs : the commitment of management, a change management strategy and adequately trained employees. Once e-business priority areas (i.e., the ones that offer the greatest ROI) are identified, to complete a successful e-business initiative: management commitment, change management and employee training must be examined.
E-business is an investment issue and, like all investment issues, will not go forward unless the CEO or senior management is committed to the project. Demonstrating a strong case of ROI should go a long way in securing management commitment. In addition to commitment, however, senior management, preferably the President and CEO, must also demonstrate strong leadership. Management must be the champion driving the initiative forward as many of the required changes will be cross-functional. Such leadership and commitment will filter down throughout the organization strengthening the enthusiasm and dedication of employees.
Any e-business transformation initiative brings with it an element of organizational change. Introducing innovative information technology solutions to streamline business processes will have a direct impact on the structure of an organization. The most common examples of organizational change are in the areas of human resources, skill requirements and communication/information flows. It is crucial that an organization considers these potential changes when developing an e-business strategy, and maps out the new, more efficient processes before moving to the technology/implementation phase. For further information on this topic, see Change Management within the Human Resources section of ebiz.enable.
Providing the proper employee training is an essential yet often overlooked element of a successful e-business implementation strategy. The maximum benefits derived from implementing new technologies and processes may go untapped if employees are not trained properly. It is important to remember that investment in human capital is also a strategic investment, especially when introducing new technologies, procedures and processes.
Learn from examples
The Canadian government provides a clreahouse for ideas and example of e-commerce success stories, and statitical analysis for how this new form of commerce affects various kinds of industries. For example The Tenniszon.com Web site is an excellent example of an SME that has adapted by deploying EC to penetrate the North and South American racquet sports market. The company’s experience shows that in developing a Web site strategy, it is important to proceed in stages, from an informational site to a transactional site, before venturing forth to conquer new markets.
While gaining familiarity with NICT, it can adapt its marketing and sales tactics, and its management of human resources, customer orders and information, in order to respond to the requirements of this new way of doing business. Thus, the company must continuously face a twofold challenge to reach its goals. To begin with, it must adapt its business processes in order to make the transition from the status of a traditional company to that of an “e.com” company. Secondly, if it wishes to expand its market from the regional to the international level, it must employ a strategy localizing its Web site to suit the language, culture and customs of the target markets.
In many cases, an e-commerce company will survive not only based on its product, but also by having a competent management team, good post-sales services, a well-organized business structure, network infrastructure and a secured, well-designed website. Such factors include:
1. Sufficient work done in market research and analysis. E-commerce is not exempted from good business planning and the fundamental laws of supply and demand. Business failure is as much as a reality in e-commerce as in any other form of business.
2. Good management teams are armed with a sound information technology strategy. A company’s IT strategies should be a part of the business re-design process.
3. Providing an easy and secure way to customers to effect transactions. Credit cards are the most popular means of sending payments on the Internet, by accounting for 90% of online purchases. In the past, card numbers were transferred securely between the customer and merchant through independent payment gateways.
4. Providing reliability and security.
5. Providing a 360-degree view of the customer relationship.
6. Engineering of the e-commerce so that it focuses on a “limited” number of core competencies — the opposite of a one-stop shop.
7. Operating on the cutting edge of technology and staying there as technology changes
8. Setting up an organization for sufficient alertness and agility to respond quickly to any changes in the economic, social, and physical environment.
9. Providing an attractive website.
10. Providing complete understanding of the products or services offered in website.
Generally, the e-commerce merchant must also perform such mundane tasks as being truthful about its product and its availability, shipping reliably, and handling complaints promptly and effectively. A unique property of the Internet environment is that individual customers have to access to far more information about the seller than they would find in a brick-and-mortar situation.
E-commerce does not avoid all problems and can even be source of problems too. For example the can be:
1. Failure to understand customers, that is, why they buy and how they buy.
2. Misreading the expectations and motivations of customers.
3. Failure to consider the competitive situation.
4. Inability to predict environmental reaction of the customer.
5. Over-estimation of resource competence.
6. Failure to coordinate with the customer.
7. Failure to obtain senior management commitment. This often results in a failure to gain enough corporate resources to accomplish a task.
8. Failure to obtain employee commitment.
9. Under-estimation of time requirements, which creates problem.
10. Failure to follow a proper plan.
11. Becoming the victim of organized crime.
The E- Commerce Act framework presents five “principles,” that are intended to “guide the development of the new digital economy.” The principles are:
1. The private sector should direct the commerce.
2. Governments should avoid unjustified margins on electronic commerce.
3. Where government contribution is needed, its aim should be to support and enforce minimalist, predictable, consistent and simple legal environment for commerce.
4. Governments should identify the unique qualities of the Internet
5. Electronic commerce over the Internet should be facilitated on a global basis.
IV. Business principles
A transaction is an agreement, communication, or movement carried out between separate entities or objects. They can be Financial, Database, or POS (Point of Sale using a debit card) transations.
A contract is a legally binding exchange of promises or agreement between parties. Contract law is based on the Latin phrase pacta sunt servanda (literally, promises must be kept). Breach of a contract is recognized by the law and remedies can be provided.
It is common for lengthy negotiations to be written into a heads of agreement document that includes a clause to the effect that the rest of the agreement is to be negotiated. Although these cases may appear to fall into the category of agreement to agree, courts nowadays will imply an obligation to negotiate in good faith provided that certain conditions are satisfied, particularly that a contract and the selections of its terms are the result of the free will of the parties.
Misrepresentation means a false statement of fact made by one party to another party and has the effect of inducing that party into the contract. For example, under certain circumstances, false statements or promises made by a seller of goods regarding the quality or nature of the product that the seller has may constitute misrepresentation.
An electronic signature is an electronic sound, symbol, or process attached to or logically associated with a record and executed or adopted by a person with the intent to sign the record. For example, this definition can include one’s name typed at the end an e-mail message, a scanned signature inserted into a document, and the standard webpage click through process, requiring, e.g., a login and “I agree.”
Will (law), a legal document expressing the desires of the author with regard to the disposition of property after the author’s death. A Living will, is a legal document expressing the desires of the author with regard to medical decisions, invoked in the event that the author is incapacitated and unable to act on her own behalf.
Vicarious liability arises under the common law doctrine of agency – respondeat superior – the responsibility of the superior for the acts of their subordinate. This means damages to the costumer due to criminal acts of the employees of a business (even an e-business) are prosecutable. Cubby v. CompuServe was a 1991 court decision in the United States District Court for the Southern District of New York which suggested that online companies would not be liable for the acts of their customers.
Prior to this decision the liability risk was largely undecided. As liability in this case was a matter of state law, the 1995 New York state court decision in Stratton Oakmont, Inc. v. Prodigy Services Co. was seen as effectively overturning this decision and in turn led to the important free speech protections for internet service providers in the 1996 Communications Decency Act. Lunney v. Prodigy Services Co., 94 N.Y.2d 242 (1999) is a leading case on liability of internet service providers for defamation. The court held that Prodigy, an internet chatroom provider, was not considered a publisher of defamatory material posted from an imposter account due to its passive role in monitoring the chatrooms.
Breach of Contract
Breach of contract is a legal concept in which a binding agreement or bargained-for exchange is not honored by one or more of the parties to the contract by non-performance or interference with the other party’s performance. This includes non payment by an e-customer and late or non- shipment of product by the e-business
The statute of frauds refers to a statute (i.e., statutory law), or a provision in a statute, in many common law jurisdictions that requires certain kinds of contracts to be done in writing and to be signed by the party against whom enforcement is sought.
In common law jurisdictions, an implied warranty is a contract law term for certain assurances that are presumed to be made in the sale of products or real property, due to the circumstances of the sale. These assurances are characterized as warranties irrespective of whether the seller has expressly promised them verbally or in writing. They include an implied warranty of fitness for a particular purpose, an implied warranty of merchantability for products, and an implied warranty of habitability for a home.
Electronic mail (abbreviated “e-mail” or, often, “email”) is a store and forward method of composing, sending, storing, and receiving messages over electronic communication systems. The term applies both to the Internet e-mail system based on the Simple Mail Transfer Protocol (SMTP) and to intranet systems allowing users within one organization to e-mail each other. Ensuring a valid identity on an e-mail has become a vital first step in stopping spam, forgery, fraud, and even more serious crimes . An essential second step will be ensuring the entity has a good reputation.
The Internet is the worldwide, publicly accessible network of interconnected computer networks that transmit data by packet switching using the standard Internet Protocol (IP). It is a “network of networks” that consists of millions of smaller domestic, academic, business, and government networks, which together carry various information and services, such as electronic mail, online chat, file transfer, and the interlinked Web pages and other documents of the World Wide Web.
Electronics Communications Privacy Act
The Electronic Communications Privacy Act of 1986 was enacted by the U.S. Congress to extend government restrictions on wire taps from telephone calls to include transmissions of electronic data by computer. Title I of ECPA protects electronic communications while in transit. Title II of the ECPA, the Stored Communications Act (SCA) protects messages stored on computers. Title III prohibits the use of pen register and/or trap and trace devices to record dialing, routing, addressing, and signalling information used in the process of transmitting wire or electronic communications.
V. What Did We Learn?
The exponential growth of the Internet and online activity raise a number of new regulatory issues and legal questions. Can electronic commerce really be secure? Can cyberspace be regulated by one, or by many authorities? In seeking to apply the law to the Internet, problems arise owing to the fact that most laws largely apply to the pre-cyberspace world.
In the age of a global economy, e-commerce and e-business have increasingly become a necessary component of business strategy and a strong catalyst for economic development. The Combination of information and communications technology (ICT) in business has revolutionized relationships within organizations and those between and among organizations and individuals. Exclusively, the use of ICT in business has improved productivity, encouraged greater customer participation, and enabled mass customization, besides reducing costs. Developing countries are are allowed increased access to the global marketplace, and are already participating in e-commerce, either as sellers or buyers where they compete with and complement the more developed economies. But their participation is far from complete and to further facilitate e-commerce growth in these countries, their relatively underdeveloped information infrastructure must be improved.
However there are some challenges:
1. High cost of internet access, including connection service fees, communication fees, and hosting charges for websites with sufficient bandwidth.
2. Limited availability of credit cards and a need to develop a nationwide credit card system.
3. Undersized transportation infrastructure resulting in slow and uncertain delivery of goods and services sold via e-commerce.
4. Network security problems and insufficient security safeguards.
5. Lack of skilled human resources and lack of key technologies.
6. Content of restrictions on national security and other public policy grounds, which greatly affect business in the field of information services, such as the media and entertainment sectors.
7. Cross-border issues in a country, such as the recognition of transactions under laws of other countries, certification services, improvement of delivery methods and customs.
8. The relatively low cost of labor, which is implies that capital intensive solutions are not apparent.
In the Information Age, Internet commerce is a powerful tool in the economic growth of developing countries. While there are some indications of e-commerce use among large firms in developing countries, there seems to be little or negligible use of the Internet for commerce among small and medium sized firms (SME). E-commerce promises to improve business for SMEs and sustainable economic development for developing countries. This is premised on strong political will and good governance, as well as on a responsible and supportive private sector within an effective policy framework. The E-commerce Act seeks to provide policy guidelines toward this end .
Avoid abusive usage
Since parties have no face-to-face communication or relationship with customers, Intermediaries and e-commerce service providers must refrain from sending junk advertisements and products. Intermediaries must be launch reasonable practices to ensure that their services are not being used for sending such materials.
Avoid Misleading Statements or Omissions
Providers should not give the wrong impression about their service or product in order to deceive customers. This includes (i) Goods or services advertised in the media by electronic means; and (ii) Transactions completed in the media by electronic means. The regulations ensure that
1. No contract or activity against the company takes place.
2. That the provider knows the customer
3. That there is information about the experience regarding the service provided, the company ‘s product and the customer behavior.
4. Abusive use and language must be avoided
5. Truthful advertising in the media must be guaranteed
6. The system must be able to deal directly with the customer
7. Effective monitoring systems must be maintained
8. Effective contracts must be established
9. The system must protect the right to privacy
10. A Complaints and Disputes System should be established for better service
11. Business practices should be made transparent
Implementation & Execution
Between E-Sign and UETA, there is substantially less risk associated with the enforceability of electronic contracts and signatures today. Although electronic contracting in Internet based transactions is common, these new laws will foster more extensive development and use of electronic contracting technology. As soon as all Nations incorporate the UETA into their local legislation, the local law enforcement authority would be responsible for its Implementation & Execution. At the same time, Business Bodies would pressure the local authority to uniform with ECA.
In this report, we discussed E-commerce and Legislation. Specifically, the e-commerce process, types of e-commerce, problems and successes, business principles, legislation and interpretation, criminal code of business etc. From the whole discussion, we learned about how to operate an e-business and the rules & regulation for operating this business.
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