Business Law

Chapter 13:

Business Law in the Internet Era

An Introduction to E-Commerce

• The successes of businesses such as E-Bay and Amazon.com have shown that Internet businesses are here to stay.

The Rise of a New Industry

• Like the Industrial Revolution before it, the rise of the Technological Revolution has caused some rapid changes in society, displaced workers and raised new legal issues.

Growing Pains

• All new industries have growing pains.

• There are supply and service problems to work out.

• There are legal challenges.

Problems Presented by E-Commerce

• E-commerce has unique problems created by transacting business on the Internet.

Contract Formation on the Internet

• Among the problems faced by Internet businesses are concerns about contract formation, offer and acceptance, and the proof of mutual assent, among others.

Looking to History For Answers to New Problems

• The basic requirements of a contract do not change simply because it happens to involve a transaction in cyberspace.

• Businesses have been dealing with similar problems for centuries.

Digital Signatures

• Federal legislation authorizing digital signatures includes the Electronic Signatures in Global and National Commerce Act.

• This act specifically addresses some of the lingering questions about digital signatures.

Lack of Regulation

• Almost all new industries begin with virtually no rules or regulations.

The “Wild West” of Business Transactions

• Many traditional businesses were reluctant to create an Internet presence for their companies because of the perception (often valid) that the Internet was an unregulated frontier populated by anarchists and computer hackers.

Attempts at Federal and State Regulation

• In recent years, several new federal and state laws have been enacted that focus directly on the Internet.

• The Federal Trade Commission has become actively involved with Internet business transactions

• In addition to these federal initiatives, some states have made attempts at regulating certain aspects of the Internet.

Specific Internet-Based Business Problems

• There are certain problems that are specific and unique to Internet-based businesses.

Cyber piracy

• Cyber piracy refers to the practice of copying existing software and reselling it to a customer, often at a lower price.

Software Licensing

• A businessperson should always make sure to have sufficient licenses to cover all employees actually using the software.

Tax Issues

• So far, federal and some state governments have stayed out of the picture by not imposing taxes on Internet transactions in the same way that they do for other types of transactions.

Spam

• In recent years, spam has become a huge problem, with unsolicited e-mails filling servers with offers of everything from weight loss products to pornography.

Meta Tags

• A web designer will bury certain phrases in the web page’s HTML code to take advantage of the way that some (but not all) online search engines categorize and store information about web pages.

Legal Notices on Web Sites

• One way that businesses use to insulate themselves from legal action is to post notices on the Web site.

• These notices attempt to limit the company’s civil or criminal exposure by specifically stating what visitors to the site can do.