E-Commerce Unit-4

E-Commerce Notes

Unit-4

Lecture-1

Legal Issues Related to E-Commerce

Implementation of e-commerce involves many legal issues. These issues can be classified as:-

·        Privacy: Privacy means the right to be left alone and the right to be free of unreasonable personal intrusions.

Information privacy is the “claim of individuals, groups or institutions to determine for themselves when, and to what extent, information about them is communicated to others.

Privacy Principles:-

a)        Accountability: An organization is responsible for personal information under its control and shall designate an individual or individuals who are accountable for organization’s compliance with the following principles.

b)       Identifying purpose: The purposes for which personal information is collected shall be identified by the organization at or before the time the information is collected.

c)        Consent: The knowledge and consent of the individual is required for the collection, use or disclosure of personal information, except when inappropriate.

d)       Limiting Collection: The collection of personal information shall be limited to that which is necessary for the purpose identified by the organization. Information shall be collected by fair and lawful means.

e)        Limiting use, disclosure & retention: Personal information shall not be used or disclosed for purposes other those for which it was collected, except with the consent of the individual or as required by the law (Personal information shall be retained only as long as necessary for fulfillment of those purposes).

f)         Accuracy: Personal information shall be as accurate, complete, and up-to-date as is necessary for the purpose for which it is to be used.

g)        Safeguards: Personal information shall be protected by security safeguards appropriate to the sensitivity of the information.

Protecting Privacy:

Some suggestions to protect your privacy are:-

1.     Think before you give out personal information on a site

2.     Track the use of your name & information

3.     Live without cookies

4.     Use encryption

5.     Ask your ISP or employer about a privacy policy.

·        Cookies: Cookies are the piece of information that allows a web-site to record one’s comings and goings.

Through cookies:

«  Websites can ‘remember’ information about users & respond to their preferences on a particular site, process is transparent to users.

«  Websites can maintain information on a particular user across HTTP connections.

Solutions to Cookies:

As Cookies are stored at client’s side and sends information about client to server, sometimes it can be dangerous for privacy. Some solutions to avoid cookies are:-

§   Users can delete cookie files stored in their computer.

§   Use of anti-cookie software (e.g. cookie cutter).

·        Intellectual Property: Intellectual Property is the intangible property created by individuals or corporations. It is difficult to protect since it is easy & inexpensive to copy & disseminate digitized information.

Protecting Intellectual Property

§  Copyright

§  Trade Secret

§  Patent

·        Indecency: Indecency is any comment, request, suggestion, proposal, image or other communication that depicts or describes offensive as measured by contemporary community standards.

·        Taxation: Taxation is an issue because e-commerce companies do not have to collect sales tax on their customer’s purchases. While this is an advantage to customers, it costs the government very high.

·        Gambling: Gambling is an issue because the Internet makes it difficult to decide where the transaction takes place, and therefore, which region’s law should regulate that transaction.

Other Legal Issues:

v What are the rules of electronic contracting, and whose jurisdiction prevails when buyers, brokers and sellers are in different states and/or countries.

v How can gambling be controlled on the Internet? How can the winner’s tax be collected?

v Is a digital signature legal?

v The use of multiple networks & trading partners make the documentation of responsibility difficult. How is such a problem overcome?

Ethical Issues Related to E-Commerce

Ethics is a branch of philosophy that deals with what is considered to be right and wrong. The spread of e-commerce has created many ethical situations. e.g. the company monitoring email is very controversial. One group of people may agree to this & one may disagree. Hence there are major differences among companies and individuals with respect to what is right & wrong. There are also differences regarding ethics among different countries. What is unethical in one culture may be perfectly acceptable in another.

Ethical issues can be categorized as:-

·        Privacy: Collection, storage & dissemination of information about individuals.

·        Property: Ownership & value of information & intellectual property.

·        Accuracy: Authenticity, fidelity & accuracy of information collected & processed.

·        Accessibility: Right to access information & payment of fees to access it.

Other Issues Related to E-Commerce

·        Cultural Issues: Use of Internet allows organizations to compete in a global virtual market space. Consumers from different cultures may considerably differ in perceptions, beliefs, selection and use of internet based electronic commerce. To compete in this global market-space, companies need to understand cultural differences exhibited by individuals.

·        Issues Related to Language: Many governments in Europe have realized the potential of e-commerce & realized that Europe is seriously lagging behind the US in terms of applications & customers. One of the reasons that Europe government has understand is the language. Most obvious is the fact that Europe is a melting pot of differing languages & cultures.

·        Native Tongue: Just because the language of business is English, it doesn’t follow that all consumers are happy to use English. Many consumers would prefer a website be presented in their native tongue & reflect their culture.

E-Commerce Notes

Unit-4

Lecture-2

Cyber Laws

LAWS OF THE INTERNET & THE WORLD WIDE WEB

The growth of cyberspace has resulted in the development of a new & highly specialized branch of law called cyber laws.

“Cyber Law is a term which refers to all the legal and regulatory aspects of Internet and the World Wide Web. Anything concerned with or related to legal aspects or issues concerning any activity in Cyberspace comes within the ambit of cyber law”.

Aims of Cyber Laws:

·        To facilitate electronic communications by means of reliable electronic records.

·        To minimize the incidence of forged electronic records, intentional and unintentional alterations of records, and fraud in electronic commerce & other electronic transactions.

·        To promote public confidence in the integrity & reliability of electronic records, electronic signatures & electronic commerce.

·        To establish uniform rules & standards regarding the authentication & integrity of electronic records.

·        To create a legal infrastructure for the use of digital signatures.

Cyber Laws in India

In May 2000, both the houses of the Indian parliament passed the Information Technology Bill. The Bill received the consent of president in August, 2000 and came to be known as the Information Technology Act; 2000.It was enacted on 7^th June 2000 & was notified in the official gazette on 17^th Oct, 2000. It is applicable to whole of India.

The Information Technology (IT) Act 2000 aims to provide a legal & regulatory framework for promotion of e-commerce & e-governance.

Some highlights of the Act are listed below:-

Chapter-II: of the Act specifically stipulates that any subscriber may authenticate an electronic record by affixing his digital signature.

Chapter-IV: of the Act gives a scheme for regulation of Certifying authorities.

Chapter IX: of the Act talks about penalties & adjudication for various offenses.

Chapter XI: of the Act talks about various offenses & the said offenses shall be investigated by a police Officer not below the rank of the Deputy Superintendent of police.

Salient Provisions of Cyber Laws:

«  Companies shall now be able to carry out electronic commerce using the legal infrastructure provided by the Act.

«  Digital Signatures have been given legal validity & sanction in the Act.

«  Under the IT Act, 2000 it shall now be possible for corporate to have a statutory remedy in case if anyone breaks into their computer systems or network & causes damage or copies data.

«  The IT Act also addresses the important issues of security, which are so critical to the success of electronic transactions.

«  The  Act throws opens the doors for the entry of corporate companies in the business of being Certifying Authorities for issuing Digital Signatures & Certificates

Information Technology (IT) Act-2000

The Information Technology Act 2000 aims to provide a legal & regulatory framework for promotion of e-commerce & e-governance. It was enacted on 7^th June 2000 and was notified in the official gazette on 17^th Oct 2000. It is applicable to whole of India.

Major provisions contained in the IT Act 2000 are:-

·        Extends to the whole of India

·        Electronic Contracts will be legally valid

·        Legal recognition of digital signatures.

·        Digital signatures to be effected by use of asymmetric crypto system & hash function.

·        Security procedure for electronic records & digital signature.

·        Certifying authorities to get license to issue digital signature certificates.

·        Various types of computer crimes defined & stringent penalties provided under the Act.

·        Appointment of Adjudicating Officer for holding inquiries under the Act.

·        Act to apply for offences committed outside India.

·        Power of police officers and other officers to enter into any public place & search & arrest without warrant.

·        Constitution of Cyber Regulations Advisory Committee who will advice Central Government & Controller.

Civil Offences Stipulated by IT Act, 2000 are:-

§  Copy or extract any data, database

§  Unauthorized access & downloading files

§  Introduction of Virus

§  Damage to computer system & computer network

§  Disruption of computer, computer network

§  Denial to authorized person to access computer

§  Providing assistance to any person to facilitate unauthorized access to a computer.

Criminal Offences Stipulated by IT Act 2000 are:-

§  Hacking with computer system

§  Electronic forgery i.e, affixing of false digital signature, making false electronic record.

§  Electronic forgery for the purpose of cheating

§  Electronic forgery for the purpose of harming reputation

§  Publication of digital signature certificate for fraudulent purpose

§  Publication of information which is obscene in electronic form

§  Breach of confidentiality & privacy

Salient Features of the Information Technology Act, 2008

The IT Act, 2008 has been signed by the President of India on February 5, 2009.

Some of the salient features of the Act are as follows:-

Ø The term “digital signature” has been replaced with “electronic signature” to make the Act more technology neutral.

Ø A new section has been inserted to define “communication device” to mean cell phones, personal digital assistance or combination of both or any other device used to communicate, send or transmit any text, audio or image.

Ø A new section has been added to define “cyber cafe” as any facility from where the access to the Internet is offered by any person in the ordinary course of business to the members of the public.

Ø In view of the increasing threat of terrorism in the country, the new amendments include an amended section 69 giving power to the state to issue directions for interception or monitoring of decryption of any information through any computer resource.

Ø Section 67 of the old Act is amended to reduce the term of imprisonment for publishing or transmitting obscene material in electronic form to three years from five years & increase the fine thereof from Indian Rupees 100,000 to Indian Rupees 500,000.

Ø Section 79 of the old Act which exempted intermediaries has been modified to the effect that an intermediary shall not be liable for any third party information data or communication link made available or hosted by him if:-

§  The function of the intermediary is limited to providing access to a communication system over which information made available by third parties is transmitted or temporarily stored or hosted.

§  The intermediary does not initiate the transmission.