Old Laws And The New Economy

Given our litigious society, it was inevitable that the world of e-commerce would eventually find itself dragged into ‘real world’ courtrooms. And, lest anyone think that Microsoft is the only e-commerce-related company with legal woes, there is plenty of reason to believe that the floodgates are poised to open.

While Congress does its best to resolve the ongoing battle of taxes versus no taxes on Internet goods and services, new skirmishes are heating up in other quarters, including the emerging patent wars.

For example, kingpin Amazon.com is suing Barnes and Noble, while priceline is suing Microsoft.

Meanwhile, airline companies and Web travel agencies are squaring off in their own battle over online ticket sales, which could conceivably reach the courts if they can’t work it out independently.

What’s going on here? Anarchy? To some extent, yes. The laws that govern the use of the Internet are still ill-defined, and, in some cases, non-existent. To compound the problem, electronic commerce and general Internet development moves much faster than any traditional model that lawmakers are used to.

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While some e-businesses are taking full advantage of the law dragging its feet in creating legal standards for online commerce, much of the industry is putting pressure on legislators to pass laws that govern specific electronic business practices.

With few regulations to guide e-businesses, much of the discussion about creating legal standards is based on applying laws from traditional business. However, not everyone believes that the same laws that govern brick-and-mortar businesses will work for online commerce.

Shortly after the antitrust decision was handed down in the Microsoft case, Senator Pete Domenici (R-New Mexico) proffered this thought: “Our antitrust laws were enacted at a time of slow moving trains, not high-speed computers.”

The same could be said for laws concerning issues such as privacy, confidentiality and even contracts.

Legal Questions Beget More Questions

As e-commerce evolves with new advances in technology, consumers are left with questions that the law cannot yet answer. For example:

New laws authorize electronic signatures on loan contracts and direct companies to download all legal disclosure documents about the loan. What if I’m not a computer owner? Is the company I’m dealing with required to send my documents by regular mail?

If my signature shows up somewhere else due to faulty technology or unscrupulous business practices, am I liable for charges incurred, and how do I prove I didn’t sign twice?

If I use an e-commerce Web site that assures me of privacy, is there any way I can truly know the site is not linked to an outside, personalized e-mail service that captures data about me?

Why is it that to date, laws protecting Internet privacy apply only to children? And, even though the Department of Health and Human Services has drafted a privacy statement pertaining to online medical records, why hasn’t Congress enacted legislation that lawfully protects citizens’ individual health information?

As for businesses, some brick-and-mortar business owners want to know why the law requires them to pay sales tax, property tax and various licensing fees, while online entrepreneurs are paying none of the above.