LML4810 NOTES FOR EXAM
Legal aspects of electronic commerce
,1.1 GLOBALISATION OF BUSINESS
Electronic frontier
The Internet is a global network of computers that all speak the same language, a ``digital Esperanto'' of zero's and ones
(Gringras 1). This giant network has given birth to an electronic frontier, namely a virtual world in which cyber citizens enter into
cyber contracts.
One of the phenomena of globalisation and the development of information technology is the advent of global business.
Globalisation
At the very least, globalisation is a process that affects all aspects of social, political, and economic activity. The world is thus
shrinking, and we are irresistibly moving toward a world of increased communication, common markets, and shared culture.
The digitisation of information and the rapid growth of the Internet have had a marked influence on society. The Internet is
changing the way we communicate and do business. These changes have dramatically and irrevocably altered the needs of
business and industry.
2 What is electronic commerce?
Electronic commerce, or e-commerce, is simply trading electronically.
The technologies that can be used for electronic commerce include
- the Internet and the World Wide Web,
- electronic mail (e-mail),
- EFTPOS, and
- the common fax machine.
Commerce over the Internet differs from traditional commerce, in that, traditionally trading was developed in a paper based
society.
E-commerce takes place in an anonymous borderless society, and many of the rules which were developed for trading in a real
environment is inappropriate for this new virtual environment. Intellectual-property law faces the biggest challenge yet as on-
line services, the Information Highway and the age of multi- media have become realities.
Security
The Internet, comprised of millions of interconnected computers, allows nearly instantaneous communication and transfer of
information, around the world.
People use e-mail to correspond with one another.
The World Wide Web is used for online business, data transmission, research, learning, personal communica- tions, transfer of
payments and a myriad of other activities. The perpetual increase of information transmitted electronically has lead to an
increased need for secure transmissions.
Legal Issues
On-line service providers are experiencing a number of issues of concern namely
- privacy,
- liability,
- content restrictions,
- security,
- intellectual-property protection,
- consumer protection,
, - electronic authentication, and
- electronic-payment mechanisms.
Other issues are also affecting the consumer, including
- access to global telecommunications networks and
- the myriad of issues affecting access.
The creators of website shopping malls are faced with the challenge to design their sites in order to effectively contract with
customers.
3 1.3 International Trends In Legislation And Regulatory Regimes
Uniform Trade Laws
International efforts are under way to tackle the most important policy issues regarding
- telecommunications deregulation,
- the unified treatment of paperless commercial transactions,
- intellectual-property protection,
- security and privacy and customs and taxation.
Laws providing for data protection, digital and electronic signatures, privacy and access to information have become imperative.
UNCITRAL Model Law
The UNCITRAL Model Law on Electronic Commerce (1996) aims to create a more secure legal environment for what has become
known as ``electronic commerce'' by providing a tool for states to enhance their legislation regarding paperless communication
and storage of information.
The Model Law is expressed in a technologically neutral manner; so that it can apply not only to existing, but also to future,
technology.
Examples
Numerous jurisdictions that have adopted legislative measures to facilitate e-commerce based their enabling instruments on the
Model Law (see, eg, in the US, the draft Uniform Electronic Transactions Act (hereafter referred to as ``the UETA'' (1999).
This Act has been closely modelled on articles 2(a) and (f), 4, 5, 6, 7, 8, 9, 10, 11, 14 and 15 of the Model Law; see also the
Australian Electronic Transactions Act 1999; and the Canadian Uniform Electronic Commerce Act 1999 (available at <http://
www.law.ualberta.ca/alri/ulc/acts/eueca.htm>) (assented to on 13 Apr 2000); see Ontario's Act with Respect to Electronic
Information, Documents and Payments (Bill 70 2000);
Singapore has adopted the Electronic Transactions Act 25 of 1998, based on the Model Law. International organisations have
also played an important role in policy formulation (see the Global Business Dialogue on Electronic Commerce, available at
<http:// www.gbde.org>)).
, STUDY UNIT 2
Introduction to the Internet: overview and major role players
INTRODUCTION TO THE INTERNET
ORIGIN OF THE INTERNET
The Internet is a global network of computers that all speak the same language, a ``digital Esperanto'' of zero's and ones.
The Internet is made up of a shared infrastructure namely a network of networks that all use the same protocols.
The ``TCP/ IP'' protocol is used in the United States, and the ``Open Systems Interconnection'' (OSI) protocol is used in Europe.
The Internet came into being in the United States in 1969, for strategic military purposes.
The development of ARPAnet the first interlinked network of 40 computers enabled the American Defence Department to
simultaneously dispatch orders to all ballistic missile bases. The basic principles that guided the development of the first
network in the 1960's still apply today.
These networks link computers throughout the world through several means of telecommunication, such as telephone and
coaxial cables, fibre-optics and satellites. The best-known category of communication over the Internet is the World Wide Web.
The World Wide Web (WWW) is at the moment the most popular way of gaining entry to the Internet.
The Internet consists of a world wide association of computers and infrastructure that makes communication possible.
The WWW is a part of the Internet consisting of interlinked data that makes communication on the web possible by using a
specific Internet protocol called HTTP.
In order to access information on the WWW a user needs an Internet browser like Netscape Communicator or Internet Explorer
which provides the means for finding and reading information on the web.
Each website has a unique web-address where the information hosted on that site may be found. In order to find information,
the user therefore needs to have or find the correct address.
Search engines, like Google (http:// www.google.com) provide a quick and efficient way to find relevant addresses on the
Internet.
An address will usually look as follows: http://www.msn.co.za. Several other communica- tion applications are also available to
the user, namely e-mail (electronic mail), Telnet, FTP (File Transfer Protocol), Gopher, Mailing Lists, Discussion Groups (such as
Newsgroups) and Internet Relay Chat. core infrastruc- ture The core infrastructure of the Internet consists mainly of routers
(computers designed to receive and transmit data), hosts (computers which store programs and data), and pipes
(telecommunication links between the routers and hosts).
2 2.2 INTERNET ROLE PLAYERS
MAIN PLAYERS
The main players in the Internet context are infrastructure and network providers, content providers, administrators, access
providers (commonly, and perhaps less accurately, known as Internet Service Providers (ISPs), or, more accurately, as Online
Service Providers (OSPs)), navigation providers, and transaction facilitators.
Legal aspects of electronic commerce
,1.1 GLOBALISATION OF BUSINESS
Electronic frontier
The Internet is a global network of computers that all speak the same language, a ``digital Esperanto'' of zero's and ones
(Gringras 1). This giant network has given birth to an electronic frontier, namely a virtual world in which cyber citizens enter into
cyber contracts.
One of the phenomena of globalisation and the development of information technology is the advent of global business.
Globalisation
At the very least, globalisation is a process that affects all aspects of social, political, and economic activity. The world is thus
shrinking, and we are irresistibly moving toward a world of increased communication, common markets, and shared culture.
The digitisation of information and the rapid growth of the Internet have had a marked influence on society. The Internet is
changing the way we communicate and do business. These changes have dramatically and irrevocably altered the needs of
business and industry.
2 What is electronic commerce?
Electronic commerce, or e-commerce, is simply trading electronically.
The technologies that can be used for electronic commerce include
- the Internet and the World Wide Web,
- electronic mail (e-mail),
- EFTPOS, and
- the common fax machine.
Commerce over the Internet differs from traditional commerce, in that, traditionally trading was developed in a paper based
society.
E-commerce takes place in an anonymous borderless society, and many of the rules which were developed for trading in a real
environment is inappropriate for this new virtual environment. Intellectual-property law faces the biggest challenge yet as on-
line services, the Information Highway and the age of multi- media have become realities.
Security
The Internet, comprised of millions of interconnected computers, allows nearly instantaneous communication and transfer of
information, around the world.
People use e-mail to correspond with one another.
The World Wide Web is used for online business, data transmission, research, learning, personal communica- tions, transfer of
payments and a myriad of other activities. The perpetual increase of information transmitted electronically has lead to an
increased need for secure transmissions.
Legal Issues
On-line service providers are experiencing a number of issues of concern namely
- privacy,
- liability,
- content restrictions,
- security,
- intellectual-property protection,
- consumer protection,
, - electronic authentication, and
- electronic-payment mechanisms.
Other issues are also affecting the consumer, including
- access to global telecommunications networks and
- the myriad of issues affecting access.
The creators of website shopping malls are faced with the challenge to design their sites in order to effectively contract with
customers.
3 1.3 International Trends In Legislation And Regulatory Regimes
Uniform Trade Laws
International efforts are under way to tackle the most important policy issues regarding
- telecommunications deregulation,
- the unified treatment of paperless commercial transactions,
- intellectual-property protection,
- security and privacy and customs and taxation.
Laws providing for data protection, digital and electronic signatures, privacy and access to information have become imperative.
UNCITRAL Model Law
The UNCITRAL Model Law on Electronic Commerce (1996) aims to create a more secure legal environment for what has become
known as ``electronic commerce'' by providing a tool for states to enhance their legislation regarding paperless communication
and storage of information.
The Model Law is expressed in a technologically neutral manner; so that it can apply not only to existing, but also to future,
technology.
Examples
Numerous jurisdictions that have adopted legislative measures to facilitate e-commerce based their enabling instruments on the
Model Law (see, eg, in the US, the draft Uniform Electronic Transactions Act (hereafter referred to as ``the UETA'' (1999).
This Act has been closely modelled on articles 2(a) and (f), 4, 5, 6, 7, 8, 9, 10, 11, 14 and 15 of the Model Law; see also the
Australian Electronic Transactions Act 1999; and the Canadian Uniform Electronic Commerce Act 1999 (available at <http://
www.law.ualberta.ca/alri/ulc/acts/eueca.htm>) (assented to on 13 Apr 2000); see Ontario's Act with Respect to Electronic
Information, Documents and Payments (Bill 70 2000);
Singapore has adopted the Electronic Transactions Act 25 of 1998, based on the Model Law. International organisations have
also played an important role in policy formulation (see the Global Business Dialogue on Electronic Commerce, available at
<http:// www.gbde.org>)).
, STUDY UNIT 2
Introduction to the Internet: overview and major role players
INTRODUCTION TO THE INTERNET
ORIGIN OF THE INTERNET
The Internet is a global network of computers that all speak the same language, a ``digital Esperanto'' of zero's and ones.
The Internet is made up of a shared infrastructure namely a network of networks that all use the same protocols.
The ``TCP/ IP'' protocol is used in the United States, and the ``Open Systems Interconnection'' (OSI) protocol is used in Europe.
The Internet came into being in the United States in 1969, for strategic military purposes.
The development of ARPAnet the first interlinked network of 40 computers enabled the American Defence Department to
simultaneously dispatch orders to all ballistic missile bases. The basic principles that guided the development of the first
network in the 1960's still apply today.
These networks link computers throughout the world through several means of telecommunication, such as telephone and
coaxial cables, fibre-optics and satellites. The best-known category of communication over the Internet is the World Wide Web.
The World Wide Web (WWW) is at the moment the most popular way of gaining entry to the Internet.
The Internet consists of a world wide association of computers and infrastructure that makes communication possible.
The WWW is a part of the Internet consisting of interlinked data that makes communication on the web possible by using a
specific Internet protocol called HTTP.
In order to access information on the WWW a user needs an Internet browser like Netscape Communicator or Internet Explorer
which provides the means for finding and reading information on the web.
Each website has a unique web-address where the information hosted on that site may be found. In order to find information,
the user therefore needs to have or find the correct address.
Search engines, like Google (http:// www.google.com) provide a quick and efficient way to find relevant addresses on the
Internet.
An address will usually look as follows: http://www.msn.co.za. Several other communica- tion applications are also available to
the user, namely e-mail (electronic mail), Telnet, FTP (File Transfer Protocol), Gopher, Mailing Lists, Discussion Groups (such as
Newsgroups) and Internet Relay Chat. core infrastruc- ture The core infrastructure of the Internet consists mainly of routers
(computers designed to receive and transmit data), hosts (computers which store programs and data), and pipes
(telecommunication links between the routers and hosts).
2 2.2 INTERNET ROLE PLAYERS
MAIN PLAYERS
The main players in the Internet context are infrastructure and network providers, content providers, administrators, access
providers (commonly, and perhaps less accurately, known as Internet Service Providers (ISPs), or, more accurately, as Online
Service Providers (OSPs)), navigation providers, and transaction facilitators.
