IT Management and Ecommerce

Summary

Prior to digital storage and the internet, the nature and architecture of the storage of information made access difficult and copying relatively arduous and time consuming. In the 21st century, information of all types is created, shared and, significantly, reproduced digitally. Material placed online is subject to unrestricted reproduction. The demand for all forms of information is a vast opportunity for order and structure – and for exploitation. The sheer number of users, and their voracious appetites, leads to increased supply. This is demonstrated by the vast number of websites which have emerged to reproduce material subject to copyright, and the almost complete disregard for the law by individual users.

The internet facilitates the swift reproducing and exchange of digital material. Hyperlinking and framing can offer new possibilities for infringement of copyright. Works protected by copyright, such as music and videos, can be easily transferred in peer-to-peer dealings. Such transfers have become the target of copyright owners. This chapter explores these issues and developments and the relationship between copyright and electronic commerce. It is not intended to state the law relating to copyright, other than via a brief overview. The advent of electronic commerce and the internet have necessitated a rethink of intellectual property issues by the World Intellectual Property Organization (WIPO), the courts and the legislature. The proliferation of material on the internet – written, aural and graphic – has posed new questions and resulted in the creation of new rights internationally.

Summary

Social media permits people to engage in social discourse with hundreds of friends and associates. Online, everyone is a publisher. People use handheld devices to communicate to individuals, small and large groups and the world at large at any time – while waiting in queues, on public transport, whilst walking and indeed whilst driving. One modern danger is that users are not circumspect when texting off-the-cuff remarks or tweeting immediate and spontaneous responses. Each day users send 250 billion emails and make 600 million contributions to Twitter. Defamation is a real issue because of the audience which can access such discourses. When written, rather than spoken, words take on a sterner and more deliberate meaning than may have been intended, and injudicious replies may be sent in the heat of the moment.

From the beginning, the boundaries of appropriate and acceptable behaviour on the internet have been challenged. The notion that the internet is the last bastion of free speech has produced a general mindset that the laws that bind and regulate social behaviour should not apply in cyberspace. There has developed a sense that anything written in a digital forum should somehow be immune from oversight and censure. Courts internationally have disagreed with this view and have applied defamation laws to social media.

Summary

Information in cyberspace is eternal. The very architecture of cyberspace facilitates information flow, the antithesis of privacy. Digital files reproduce faithfully, permitting an avalanche of material to be viewed, shared and stored. Social media allows millions to share thoughts, images and videos of brilliant quality and (sometimes) questionable taste. Never has information been so available at our fingertips. The expression ‘going viral’ has entered the vocabulary to describe this phenomenon. It is insidious. It is glorious. In any event it encroaches at a galloping pace on many individuals’ privacy.

‘Privacy’ has numerous meanings, and its importance varies greatly among individuals, communities, organisations and governments. It is an aspect of freedom and human rights. Civil libertarians may believe that our actions and behaviour should not be subject to public or governmental scrutiny; protectionists may accept such erosions for the greater good in the name of law and order.

Historically, governments seem to have pursued increasing and systemic invasions of privacy in the name of law and order, fighting crime and terrorism. However, their role is in fact to ensure and balance security issues and the proper protection of the privacy rights of the individual. In the 1990s the Clipper Chip was proposed by the US Government, ostensibly for the purpose of allowing the government to override individual encryption to protect society from ‘gangsters, terrorists and drug users’. Such a process would have allowed the government to access and decipher all encrypted files. The proposal was unsuccessful. In Australia in 1984, an attempt to pass a Privacy Act failed because it set in place an anti-privacy provision: a central national identification card.

Summary

When a radically new situation is presented to the law it is sometimes necessary to think outside the square … this involves a reflection upon the features of the Internet that are said to require a new and distinctive legal approach.

Cyberspace is an illusion. There is no such place. Many terrestrial norms do not and cannot apply to such a fictitious construct. Nevertheless, cyberspace users perceive metaphorical chat rooms, folders, files, shops, libraries and so forth. They live digital lives with digital personas in ‘places’ such as Second Life, Twitter and Facebook. The reality is that each step of the digital experience is rooted terrestrially. Traditional legal principles are applicable to the majority of electronic commerce disputes. Nevertheless, the operation of electronic commerce in cyberspace results in new circumstances to which legal jurists cannot readily apply established legal rules.

The borderless nature of the internet often hides or disguises the origin of particular websites and corresponding information. Questions sometimes arise as to the country or state whose courts have jurisdiction to adjudicate on a matter, and as to which law is to be applied. Courts also have to determine issues such as where conduct occurs – at the computer, the server, the place of business or residence or somewhere else? – and thus which time zone applies. This area of law is referred to as conflict of laws or private international law, and its principles are well established.

Summary

Commerce is typically about profit. It also always involves risk. Risk assessment in commerce involves consideration of such factors as the law of contracts, the parties, the goods or services and the legal forum. Many commercial parties have braved the new electronic commerce world without knowing or understanding the legal implications of their actions. In many instances commercial parties have embraced electronic commerce because of its efficiencies, and thus profits. A new order is emerging in this world in a manner not dissimilar to the onset of lex mercatoria.

In an attempt to ensure confidence, many international organisations have proposed treaties, model laws and protocols to encourage certainty and stability for international electronic commercial practices and in relation to laws of contract. The UNCITRAL Model Law on Electronic Commerce (Model Law) has proved the most popular, with significant international acceptance by national legislatures, including those of Australia and New Zealand. More recently the UN passed the Convention on the Use of Electronic Communications in International Contracts.

This chapter addresses the regulation of, and legislative responses to, electronic contracting. It challenges the wisdom of and necessity for legislation based on the Model Law, and the introduction of the concept of consent as a precondition for the application of selected legislative provisions. This chapter does not deal with the basic principles of contract law; they are dealt with most satisfactorily in many texts.

Summary

No. 20 of 2000

Version as at 1 January 2015

Part 1 – Preliminary

Purposes

The purposes of this Act are -

(a) to recognise that transactions effected electronically are not by that reason alone invalid;

(b) to provide for the meeting of certain legal requirements as to writing and signatures by electronic communication;

(d) to permit the recording and retention of information and documents in electronic form;

(e) to provide for the determination of time and place of dispatch and receipt of electronic communications;

(f) to stipulate when an electronic communication will bind its purported originator.

Commencement

This Act comes into operation on 1 September 2000.

Definitions

(1) In this Act -

addressee of an electronic communication means a person who is intended by the originator to receive the electronic communication, but does not include a person acting as an intermediary with respect to the electronic communication;

automated message system means a computer program or an electronic or other automated means used to initiate an action or respond to data messages in whole or in part, without review or intervention by a natural person each time an action is initiated or a response is generated by the system;

Summary

This chapter examines and contemplates law and culture in cyberspace. The role of law and indeed the rule of law have different dynamics in cyberspace as a consequence of the architecture of cyberspace and its anonymous, pseudonymous and borderless features. The resultant structural balance among technology, law and culture may be expressed as the ‘rule of cyberspace’. This spatial dimension, economic influence on human culture and the role of law and regulation together form a subculture which both impacts on and moulds electronic commerce.

First, the nature of cyberspace is examined. This is followed by consideration of theoretical bases for law and order in cyberspace. The rule of cyberspace emerges, by processes known as ‘spontaneous order’, from the environmental factors fashioning cyberspace. It is spontaneous order which best describes – and to a limited extent predicts – regulation for electronic commerce.

This chapter examines the juxtaposition of culture and cyberspace, a modern application of spontaneous order, and then uses a discussion of libertarian and classical approaches to predict the future of cyberspace.

Cultural and environmental juxtaposition with cyberspace

Human interaction tends towards order and has an aversion to chaos. Culture brings about communities, law, order and stability. And so it is for cyberspace and the rule of cyberspace.

Cyberspace is infused with a kind of spontaneous order , and has thus evolved protocols through public participation. No one controls cyberspace. There are many stakeholders and users, all with their own agendas, impacts and influences. Customs, usages and structure have emerged from human action and interaction, but not human command. Organising bodies do not know the diverse predilections and demands of the participants. The size, direction, extent and use of cyberspace have challenged forecasters. By incalculable actions and inputs - spontaneous order - cyberspace has gained structure and presence.

Summary

The first electronic contracts were entered into with the use of the telegraph in the 1830s; in the 1880s they could be entered into by the use of the telephone. The earliest reported case validating electronic signatures comes from the New Hampshire Supreme Court in Howley v Whipple in 1869, where the court stated:

It makes no difference whether [the telegraph] operator writes the offer or the acceptance in the presence of his principal and by his express direction, with a steel pen an inch long attached to an ordinary penholder, or whether his pen be a copper wire a thousand miles long. In either case the thought is communicated to the paper by the use of the finger resting upon the pen; nor does it make any difference that in one case common record ink is used, while in the other case a more subtle fluid, known as electricity, performs the same office.

The traditional signature has been the prime method a person uses as a proof of identity, and as a material expression of intent and execution of documents. A signature on a document indicates the provenance of the document and the intention of the signatory with regard to that document. With the advent of the electronic era, a form of signature is adopted for electronic documents. This chapter examines the regulation, use and security of electronic signatures and the types of electronic signatures, such as digital signatures, biometric signatures and Transport Layer Security (TLS) technology, being used in social media and electronic commerce.

Summary

Knowledge, information and electronic data of all forms are stored by the majority of the world’s population on complex range of devices and storage facilities. From large computer servers to personal tablets and mobile devices, storage has expanded in direct proportion to the advances in the capability and capacity in computing. In 2014 the number of mobile devices exceeded the number of desktop and laptop computers worldwide. Users are relying less and less on fixed storage devices and individual computer capacity. Entrepreneurs have quickly recognised the individual’s proclivity for gadgets, communications, photographic and video devices, as well as text and internet connections and communications, and have taken advantage of the spontaneous order which can arise from the chaotic juxtaposition of new technology, social media and the human spirit. The inevitable next step has been the creation of central storage facilities and computer resources to provide a reliable rapid use facility for all individuals.

Cloud computing promises fast, efficient and convenient storage and access networks and resources that are permanently at the fingertips of users. The promise may be premature as users evaluate the security and privacy risks. A reasonable and considered definition of cloud computing is:

Cloud computing is a model for enabling ubiquitous, convenient, on-demand network access to a shared pool of configurable computing resources that can be rapidly provisioned and released with minimal management effort or service provider interaction.

The National Institute of Standards and Technology (NIST) lists five essential characteristics of cloud computing:

Summary

The internet manages to deal with more than 100 trillion hits per month on websites using 300 million domain names. For most, this process runs smoothly, with ingenious search engines, catalogues, structures, notices, gateways and myriad other methods developed to fashion a semblance of order and structure. This endogenous order reflects and parallels the emergence of principles of custom, trade and usage. With limited government input, and a willingness by altruistic individuals and organisations, a global web, in a literal sense, has materialised, impacting commerce and our social lives, entertaining us and informing us. One such participant in the process, Tim Berners-Lee, comments: ‘Happily, the Web is so huge that there’s no was any one company can dominate.’ It is a product of its users in a time of global communications technology. The development and implementation of domain names is a living testament to the way in which order emerges from a chaos of disconnected and unchoreographed minds and data.

This chapter is in three parts. The first part examines the mapping of cyberspace and the nature of domain names. Parts two and three deal with domain name disputes, with the former dealing with remedies using the courts, and the latter dealing with the compulsory Uniform Dispute Resolution policies and procedures of the domain name administrators.

Summary

In the online era, both law-abiding and nefarious kinds of order have emerged. Society has demanded that steps be taken in response to criminal behaviour that involves the internet and other modern tools: steps that are technological, practical and legal.

The advance of information technology and computer technology has led to a corresponding increase in computer crime. There is no accepted definition of computer crime. Computers may be the subject of a crime, such as theft, or a computer may be used to commit a crime. Often, a computer is used, or misused, to elicit or manipulate data or processing. Simple unlawful access to a computer system can be regarded as an offence. Telecommunications may be involved. The result may be a transfer of funds or of confidential information. Sending an email to place a virus can be unlawful. The free flow of information has generated undesirable and abhorrent material. The public has expressed concern about pornography, information on how to make bombs and information about ways to commit suicide. New offences have been created in response to these concerns. Persons gaining unlawful access to computers for these purposes are typically referred to as ‘crackers’: hackers with malicious intent. Many crimes that are not specifically related to computers can be substantially facilitated by the use of computers. Crimes involving electronic commerce typically involve the use of computers and telecommunications. This area is often referred to as ‘cybercrime’.

Summary

The Australian Privacy Principles are to be found in Schedule 1 of the Privacy Act 1988 (Cth).

Part 1 sets out principles that require APP entities to consider the privacy of personal information, including ensuring that APP entities manage personal information in an open and transparent way.

Part 2 sets out principles that deal with the collection of personal information including unsolicited personal information.

Part 3 sets out principles about how APP entities deal with personal information and government related identifi ers. The Part includes principles about the use and disclosure of personal information and those identifiers.

Part 4 sets out principles about the integrity of personal information. The Part includesprinciples about the quality and security of personal information.

Part 5 sets out principles that deal with requests for access to, and the correction of, personal information.

The Australian Privacy Principles are:

Australian Privacy Principle 1 – open and transparent management of personal information

Australian Privacy Principle 2 – anonymity and pseudonymity

Australian Privacy Principle 3 – collection of solicited personal information

Australian Privacy Principle 4 – dealing with unsolicited personal information

Australian Privacy Principle 5 – notification of the collection of personal information

Australian Privacy Principle 6 – use or disclosure of personal information

Australian Privacy Principle 7 – direct marketing

Australian Privacy Principle 8 – cross-border disclosure of personal information

Australian Privacy Principle 9 – adoption, use or disclosure of government related identifiers

Australian Privacy Principle 10 – quality of personal information

Australian Privacy Principle 11 – security of personal information

Australian Privacy Principle 12 – access to personal information

Australian Privacy Principle 13 – correction of personal information

Summary

Principles of contracting have evolved over the eons, from simple tribal bartering to formal contracting, which has been in place, and enforced, since ancient Egypt times. Plato recognised basic rules for the cancellation of agreements and Roman law placed contracts into various classes. However, mass communications and connections between potential contracting parties have expanded contracting in a manner not envisaged. Although the fundamental principles of contract law will continue to apply in the digital world, new and unusual circumstances arise which must be addressed and managed by commercial parties and legal systems. Online commerce, local and global, has become commonplace in the past two decades. Numerous traders have embraced the new opportunities by creating global meeting places and auction houses such as eBay and Amazon. The sale of software, cars, travel, books, music and videos are just some of the many commercial transactions carried out in cyberspace. Trillions of dollars’ worth of goods and services transactions occur online annually. Online contracts are typically entered into without paper, without the use of a pen and without the use of the spoken word. This chapter explores how such contracts may be entered into and how conditions may be incorporated into them. This chapter also addresses the changes to the Electronic Transactions Acts as a result of the adoption of the UN’s Convention on the Use of Electronic Communications in International Contracts (New York, 2005).

IT Management and Ecommerce

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14 - Copyright issues in electronic commerce

Summary

7 - Defamation in cyberspace

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8 - Privacy in cyberspace

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17 - Jurisdiction in cyberspace

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11 - Electronic commerce and the law of contract

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Appendix A - Electronic Transactions (Victoria) Act 2000

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2 - The rule of cyberspace

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Part 4 - Conclusion

13 - Electronic signatures

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Contents

5 - Cloud computing

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16 - Domain names

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18 - Cybercrime

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Appendix B - Australian Privacy Principles

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Frontmatter

Table of cases

12 - Contracting online

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Index

Acknowledgements

Part 2 - Social Media

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