Copyright © 2008 by West Legal Studies in Business A Division of Thomson Learning Chapter 11 Cyberlaw Twomey Jennings Anderson’s Business Law and the Legal Environment, Comprehensive 20e Anderson’s Business Law and the Legal Environment, Standard 20e Business Law: Principles for Today’s Commercial Environment 2e

Copyright © 2008 by West Legal Studies in Business A Division of Thomson Learning 2 Cyberlaw is not a new body of laws. Cyberlaw is the application of existing laws and legal precedent to new problems presented with the technology of the Internet. Introduction to Cyberlaw

Copyright © 2008 by West Legal Studies in Business A Division of Thomson Learning 3 Tort Issues in Cyberspace Privacy Issues: – sent over an employer’s network is not guaranteed private. – sent over a home-use network may be intercepted; this issue is still developing.

Copyright © 2008 by West Legal Studies in Business A Division of Thomson Learning 4 Tort Issues in Cyberspace Privacy: –Web Site Information & Privacy. Websites routinely collect information about their customers; this information may be sold to other businesses. –Identity theft, or the use of someone else’s identity to purchase or obtain credit, is a growing problem. Most web merchants minimize this problem by providing a secure mode of transmitting personal information.

Copyright © 2008 by West Legal Studies in Business A Division of Thomson Learning 5 Tort Issues in Cyberlaw Statutory Protections: ECPA, CFAA, COPPA. Appropriation in cyberspace (the unauthorized use of someone’s image) is illegal both on the Internet and elsewhere. Defamation in cyberspace.

Copyright © 2008 by West Legal Studies in Business A Division of Thomson Learning 6 Contract Issues in Cyberspace Formation of Contracts. –Though most contract issues have not changed with the Internet, a few new questions have arisen. –At what point is the contract formed? –Is an electronic signature valid? Misrepresentation and Fraud in Cyberspace. –Fraud is the most reported crime committed via the Internet. This is in part due to the high volume of sales transactions over the Internet.

Copyright © 2008 by West Legal Studies in Business A Division of Thomson Learning 7 Intellectual Property Issues The Internet has not actually changed intellectual property rights, but has facilitated the illegal copying of copyrighted material. –The best known case dealing with intellectual property via the Internet is the RIAA suit against Napster, the web site which facilitated the free downloading of copyrighted songs.

Copyright © 2008 by West Legal Studies in Business A Division of Thomson Learning 8 Criminal Law Issues A computer may be the target of the crime, as when someone “hacks” into a bank’s computer records. Sometimes the computer is the tool of the crime, as in the transporting of pornography across state lines. Criminal Procedures. –The fourth amendment protects against unlawful search and seizures. –Applies to search of homes, offices and computers.

Copyright © 2008 by West Legal Studies in Business A Division of Thomson Learning 9 Constitutional Restraints First Amendment Rights –Internet free speech is protected as it is anywhere. –Violations outside the First Amendment protection are common on the Internet due to ease of communication and anonymity. Commerce Clause issues. –Nexus for Taxes. Where is the office? –Will the Internet Tax Freedom Act pass?

Copyright © 2008 by West Legal Studies in Business A Division of Thomson Learning 10 Constitutional Restraints Due Process Issues. –What about fairness and minimum contacts in interstate commerce? –When should an internet company be required to defend itself in another state?

Copyright © 2008 by West Legal Studies in Business A Division of Thomson Learning 11 Securities Law Issues The Internet has facilitated new methods of securities trading, including day trading and minute-by-minute tracking of stock performances. Abuses have arisen from the use of the Internet; most notably the practice of “pump and dump.” This is where a trader spreads false information about a stock to quickly raise its price, then selling existing shares at an inflated price.