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  • Robert Stines

Cyber Law in e-commerce

Are you using Amazon, Expedia, Groupon, Wayfair, Etsy? Subscribe to Netflix, Hulu, Amazon Prime Video. Listen to Spotify, Pandora, Tidal, Apple Music.

When was the last time you went to a branch of your bank to deposit or withdraw cash? Instead, do you use Paypal, Zelle or Venmo and deposit checks using a mobile app.

Are you using Uber or Lyft. If you actually drive, are you using an electronic toll transponder and pay your parking meter using your phone.

All of the above is e-commerce. All powered by the Internet (cyber) and it is a major disruptor to traditional commerce markets.

If you were wondering (maybe you weren't), e-commerce is the practice of buying and selling goods and services using an electronic device and the Internet. It is the digital equivalent of commercial activities that occur regularly in the physical world.

Commercial transactions in the physical world are governed by trade treaties, national and international laws. Similarly, there are a number of international, federal and state laws that govern various aspects of e-commerce. E-commerce legislation is still new and developing in many states and across the world.

Here is a brief overview of some significant e-commerce laws.

Electronic Contracts

Typically, valid written contracts require the signature of all involved parties. In e-commerce, the parties to a transaction do not meet face to face to exchange signatures. Yet, parties in cyberspace still need some sort of signature to consummate the transaction.

The Electronic Signatures in Global and National Commerce Act (ESIGN) addresses the issue of digital signatures. It is a federal law that facilitates the use of digital signatures in e-commerce transactions.

Florida enacted the Electronic Signature Act of 1996 that states an electronic signature may be used to sign a writing and shall have the same force and effect as a written signature, unless “otherwise provided by law.” Like most states, Florida has also passed the Uniform Electronic Transaction Act (UETA), Florida Statutes § 668.50, which addresses broader aspects of electronic documents such as their legal effect, replacement of original documents, and transferability.

Although not governed by statutes, it is generally understood that click-wrap, scroll-wrap, browse-wrap, and sign-in-wrap agreements are enforceable. If you are wondering what I am talking about - think about those apps, software applications or websites that ask you to agree to the terms of service by clicking "yes." Yes, you may have just entered into a binding contract without even reading the terms - did you just sell your first-born?

Courts have held that these agreements should be displayed prominently on the website or app. The terms should provide clear and simple language that is understood by the average person. Every e-commerce business should have terms of service agreements for users. It should list all the conditions of use.

Marketing on the Net

Marketing in e-commerce relies on emails and text messages. Unlike snail mail, organizations can send marketing emails or text messages to thousands of customers in a few seconds. This led to the proliferation of unsolicited commercial electronic messages, commonly called spam.

The CAN-SPAM Act applies to all commercial electronic messages, including those sent from one business to another business. It allows customers to opt out of electronic messages, sets out compliance requirements, and imposes penalties for violations. Every business should comply with the CAN-SPAM Act.

Privacy Policy and Data Protection

Privacy and data protection is the biggest issue in e-commerce today. For several years, organizations were collecting and mining data without the public paying much attention. Consumers are now aware that every organization with a presence on the Internet is capable of collecting personal information.

Certain types of information (medical, financial, and educational data) are protected under specific laws and some states have enacted laws regarding information privacy and data protection.

Every company must ensure that it is complying with federal and local privacy laws.

In Florida, section 501.171, Florida Statutes, provides that any sole proprietorship, partnership, corporation, trust, estate, cooperative, association, or other commercial entity that acquires, maintains, stores, or uses personal information must take reasonable measures to protect and secure data in electronic form containing personal information. If not, the company could face significant fines

Protecting Copyright in Cyberspace

Copyrights, patents and trademarks protect intellectual property. Copyrights protect works of authorship such as movies, music, books, and even software.

Copyright issues have taken center stage in e-commerce and other online activities. Digital systems allow duplication and transmission of material to millions of people at very little cost. The Internet has made it difficult for authors to protect their content against theft, plagiarism, and misuse.

One of the most popular early cases dealing with peer-to-peer sharing of music was the music industry's crusade against Napster for copyright infringement. Shortly after Napster, there was Grokster, which was the target of another lawsuit leading to its demise.

The Digital Millennium Copyright Act was created to overcome some of the challenges of regulating digital content. Some believe that the DMCA was a worthy cause, but it still has not prevented widespread copyright infringement.

Are you Complying?

This is just the very tip of the iceberg when thinking about cyber laws affecting e-commerce. With start-ups and tech companies thinking of ways to disrupt traditional markets using the Internet and mobile devices, every company is trying to avoid extinction (the Blockbuster).

Every company now has (or should have) a website and exists on the Internet; therefore, every company will eventually engage in e-commerce and be subject to cyber laws.

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