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Legal Issues Involved in E-Commerce

Data: 2018-04-19

The exponential growth of the Internet and online activity raise a number of new regulatory issues and legal questions.

The power of the Web to reach the world carries with it a variety of legal issues, often related to intellectual property concerns, copyright, trademark, privacy, etc., particularly in the context of doing business on the Internet. Authorities seeking to apply their laws in traditional ways or to expand legal control over international links face many challenges due to the global nature of the Internet. This paper provides an overview of some of the legal issues and related problems in e-commerce.

Approximately 100 countries now enjoy Internet access, and a recent survey reported that there are approximately 20 million Internet hosts worldwide. The number of Internet users is currently estimated to be in the region of 100 million people

The exponential growth of the Internet and online activity raise a number of new regulatory issues and legal questions. How does copyright apply to digital content? How can national laws apply to activities in cyberspace? Can privacy and data protection exist on the Web? Can electronic commerce really be secure? Should governments tax cyber trade? 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 modern era of electronic technology, many people want to get their work done quickly with little effort. At times, people forget or do not consider the legal and ethical values of their procedures. In traditional commerce, it's not easy to start a business. You must implement strategies that follow rules and regulations enforced by government. Electronic commerce makes it possible to do almost any kind of business in a very simple way. What makes it simple? The reason is that existing legal frameworks and enforcement mechanisms are not strong.

E-commerce presents a world of opportunity for doing businesses, reaching global markets and purchasing without leaving the home or office. E-commerce can provide opportunities to improve business processes, just as phones, faxes and mobile communications have in the past. However, just as any new business tool has associated issues and risks so does e-commerce. It's important to understand the legal issues and potential risks to ensure a safe, secure environment for trading with customers and other businesses.

The issue of law on the Internet is a complex one. Between the two all-or-nothing extremes lies a broad spectrum of possibilities [2]. Many people revel in the freedom to express themselves and the freedom from prohibitions such as zoning restrictions that the Internet apparently affords. With no law at all, however, the Internet would be no place to conduct business or pleasure. Laws give people certainties about their rights and responsibilities: they make life more predictable. "Without predictability, business will not be able to act efficiently, or price services effectively," said Thomas Vartanian, a Washington, D.C.-based lawyer

Some federal, state and territory governments encourage the adoption of electronic commerce by enacting and enabling legalisation. In Australia many bills and acts have been passed to resolve legal issues and make electronic transaction more authenticated, such as the Electronic Transaction Act (ETA)[3]. ETA enables contractual dealings, such as offers, acceptances and invitations, to be conducted electronically, and also allows people to use an electronic signature to satisfy any legal requirement. Even the electronic transfer of land is covered, "Importantly, the Act is similar in all material respects to those operating both in other States and at the Federal level, so people can be confident that electronic transactions carry the same legal weight nationwide," states Jim McGinty, Attorney General for Western Australia

Moreover the bill is expected to boost electronic commerce as an effective tool for businesses to increase their efficiency. This may reduce administrative duties, storage and operational costs for businesses. In McGinty's words," This is why it is crucial that we ensure the legal infrastructure around cyberspace is beyond doubt"

New legislation brings some questions such as, For how long will these acts be valid? What are the boundaries of these acts? Who should be forced to follow the rules? Most of these questions are unanswerable today.

Global companies have the responsibility to deal with some of the legal issues such as how to form contracts, abide by consumer protection laws, create privacy policies and protect databases. "As of now, there is no comprehensive set of laws or regulations that exist for international electronic commerce," says David D. Barr [5]. He added that it is difficult to establish uniform worldwide laws for e-commerce, but some building block legislation within individual countries is necessary.
By applying laws and sketching boundaries around the borderless Internet do we negate the term "freedom of information"? How will legal structure affect international transactions on the Internet? Will it restrict the potential growth of the Internet prematurely? Rapid changes in technology do not allow enforcement of specific laws in cyberspace. For now many organizations are promoting global coordination of legal structures

While shopping on the Internet, most people typically do not think about what is happening in the background. Web shopping is generally very easy. We click on a related site, go into that site, buy the required merchandise by adding it to our cart, enter our credit card details and then expect delivery within a couple of days. This entire process looks very simple but a developer or businessmen knows exactly how many hurdles need to be jumped to complete the order. Customer information has to pass through several hands so security and privacy of the information are a major concern. The safety and security of a customer's personal information lies within the hands of the business. Therefore businesses have to give the customer first their guarantee, and second peace of mind, that the information passed over is of no risk to any invading eyes.

In traditional and online trading environments, consumers are entitled to have their privacy respected. Websites should provide the customers with choices regarding the use of their personal information, and incorporate security procedures to limit access to customer information by unauthorised parties. Privacy policies and procedures should be clearly explained to customers. Although respecting consumer privacy rights is a legal requirement, it also represents good business practice. If customers trust a site and business then they are more likely to trade with it.

Many people are not willing to disclose their personal information on the Web. It is up to individuals to decide how much personal information they are willing to disclose and how it might be used. Interestingly, one survey found that many people who disclose personal information do so in hope of financial benefit, such as winning a sweepstakes.

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