The irresistible but potentially briar-filled woods of global e-commerce are turning out to be a scary place for legal novices.
A veritable thicket of legal obstacles looms ahead of organisations. If they think about it for too long, prospective e-venturers may even bottle out of The Internet Opportunity because it’s just all too hard. Or the opposite: I have heard anecdotally of companies saying, "What the hell, we’ve done enough on this legal stuff", and going ahead with plans to sell via the internet to other countries before all the legal Is have been dotted and online Ts crossed.
Computerworld has written extensively (perhaps ad nauseum for some) about such impediments to overseas trade as internet business-method patents that may put a legal circus tent over some high-wire act a New Zealand company is happily engaged in at home, online or off. Some companies may never have encountered any patent before, and back off before making a more rational assessment. Learn to live with such patents, say the lawyers; they’re here to stay. Meanwhile, the laws of other countries relating to commerce and privacy, say, may put the kibosh on some clever and otherwise perfectly legitimate local scheme.
If that foreign bramble patch is not already too daunting, the number of laws being introduced or overhauled in this country to cope with the rise of the internet and e-commerce may be enough to make you turn back to the relative safety of local bricks and mortar markets. Just keeping up with changes could be enough to keep your lawyer and accountant in boat shoes for decades.
Here’s a taste. The Electronic Transactions Bill 2000, introduced late last year, is aimed in the main at business-to-business dealings. It has several intentions, according to a seminar put on in Auckland recently by intellectual property law specialists AJ Park. The bill looks to overcome legal difficulties of a transaction not being in paper form, to define what real-world mundanities like receipt and dispatch mean in an online environment and to nail down concepts such as digital signatures. “Signature” doesn’t mean an encrypted unique identifier; for instance, the bill may legitimise simple transactions based solely on clicking “OK” on a website. However, some documents, such as deeds, will still need to be witnessed, and others, such as wills and affidavits, will need paper “originals”. The ETB is expected back from select committee in a couple of months, and to be in force sometime this year.
But, to squeeze one last image out of the metaphor, the ETB is just one stroke out of a comprehensive felling and replanting programme. Planned or under way are a model code (self-regulated) for consumer protection, for the e-tail side of things; reviews of all taxation regulation related to e-commerce, the Privacy Act, the evidence code and the Securities Act for cross-border activities; as well as the Crimes Act Amendment Bill, which will include anti-hacking measures and allow the authorities to intercept data traffic. There’s even a review of the Auctioneers Act going on, something on which those planning to wield an online gavel may wish to have their say.
Yet despite all this hard work going on in our interest, it’s not a “wild west” on the net at all, says AJ Park. The bigger democracies are mostly well ahead of us in digital legislation. And there are local codes of practice in advertising, for instance, and some protection in fair trading and consumer guarantees, intellectual property, privacy and defamation.
If only reviewing legislation were as simple as writing about it; if you insert an “e” and hyphen in front of “tax” you get a perfectly serviceable headline, but how can IRD collect more of the non-resident withholding tax it’s owed on software purchases from overseas? (They are considered a royalty from a licence.) Will censorship and broadcasting standards legislation be altered to cover “live” streamed video erotica (see Live internet erotica in legal limbo) given that obscenity laws don’t seem to cover it?
This is not to mention companies needing to iron-clad agreements about web site development, copyright, site linking and e-merchandising – or gain and defend a suitable web address for their expanding business. And keeping on the right side of this legislative landslide doesn’t mean internal company policies, such as software, internet and email use, can be ignored.
One more suggestion: if you haven’t already, type UCITA into your search engine and check out whether this, er, interesting US software industry-driven move will affect you or your customers.
I’d make a quip about hoping local industry can see the wood for the trees, but you’d probably hate me for it.