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Essentials of Business Law for a New Century
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Essentials of Business Law for a New Century


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  • 1. CHAPTER 32 Cyberlaw
  • 2. Click your mouse anywhere on the screen when you are ready to advance the text within each slide. After the starburst appears behind the blue triangles, the slide is completely shown. You may click one of the blue triangles to move to the next slide or the previous slide.
  • 3. Quote of the Day
    • “ The moving finger writes; and, having writ
    • Moves on: nor all thy piety nor wit
    • Shall lure it back to cancel half a line.
    • Nor all thy tears wash out a word of it.”
    • Omar Khayyam (1050?-1123?), Persian poet, astronomer and mathematician
  • 4. Cyberlaw Issues
    • Contract law has to deal with the validity of electronic signatures.
    • Securities law has to determine proper methods of online transactions.
    • Intellectual property law has been challenged by the ease of downloading copyrighted material and the potential for abuse.
    • The new area of cyberlaw itself is dealing with issues such as online privacy, hacking and spam.
  • 5. Privacy
    • Personal communications and private information such as financial data may be exposed when transmitted via the internet from three main sources:
      • Internet tracking
      • Computer hard drive
      • E-mail
  • 6. Internet Tracking
    • A cookie is a small file that includes an identification number and personal data such as your name, address, phone and credit card numbers and internet searches you have made.
      • Cookies are used to target ads to the specific interests of a user.
      • Cookies allow “one-stop-shopping” on sites where the user has registered information.
      • Some cookies work only on a specific web site; others follow a user from site to site.
  • 7. Self-Regulation of Online Privacy
    • Web advertisers have few restrictions about the use of personal data.
    • The Network Advertising Initiative is a voluntary organization with guidelines.
      • NAI member websites should provide “clear and conspicuous notice” of their privacy policy.
      • Consumers should be able to choose if personal data is collected.
      • Web sites should provide reasonable access to collected data. (What is reasonable?)
      • Web sites should provide reasonable security for collected data.
    Click here for internet links about NAI principles.
  • 8. Government Regulation of Online Privacy
    • Children’s Online Privacy Protection Act of 1998 (COPPA)
      • This statute prohibits internet operators from collecting information from children under age 13 without parental permission.
      • It also requires sites to disclose how they will use any information they acquire .
    • Federal regulations
      • The FTC has asked Congress to enact Federal standards, to prevent having 50 different state laws.
      • Federal courts are increasingly becoming involved through cases involving internet privacy.
  • 9. Your Hard Drive as a Witness
    • In some cases, a computer hard drive may be seized as evidence.
    • Seizure must be reasonable and conducted with a warrant.
    • Extra protections are given to those involved in the publishing industry.
  • 10. Electronic Communications Privacy Act of 1986
    • Prohibits the unauthorized interception or disclosure of wire and electronic communication.
      • The intended recipient of an e-mail may disclose it to anyone she desires.
      • ISPs are generally prohibited from disclosing electronic messages to anyone other than the addresee.
      • An employer may monitor e-mail only in certain situations.
      • The government must have a search warrant to access e-mail messages.
  • 11. Common Law Regulation of E-mail Privacy
    • Under the common law, intrusion onto someone’s private life is a tort if a reasonable person would find it offensive.
  • 12. Encryption
    • Encryption software is designed to safeguard the confidentiality of internet communication.
      • This software makes transmitted material unreadable while in “transit” and then readable only to those with the decoder.
    • Due to potential military use, encryption software is banned for export to many parts of the world, including posting to the internet.
  • 13. Crime on the Internet
    • Hacking: gaining unauthorized access to a computer.
    • Fraud: deception of a person for the purpose of gaining money or property from him.
      • Internet auctions are a venue for fraud
        • Shilling: bidding on your own items for sale or agreeing to cross-bid with a group of sellers
        • Selling defective or non-existent items
    • Identity Theft: not a new crime, but made easier with the internet.
  • 14. Spam
    • Unsolicited Commercial (or Bulk) e-mail
      • Creates additional cost to internet users, from the ISP’s costs for processing many e-mails.
    • Fraudulent Spam
      • Up to 30% of all e-mail is spam; roughly half of all spam is fraudulent.
      • FTC has attacked fraudulent spam in the same ways as other fraud.
    • Non-Fraudulent Spam
      • Harder to fight, but many ISP’s block all mail from other ISP’s known to promote spam.
  • 15. Constitutional Issues
    • Free Speech
      • Commercial speech is protected by the First Amendment; what about spam?
    • Commerce Clause
      • Due to the interstate nature of the internet, communication conducted over it cannot be adequately controlled by state laws.
  • 16. Communications Decency Act of 1996
    • An ISP is not liable for information that is provided by someone else, even if it is transmitted through its service.
  • 17. “ The law in this area is so young and unformed that oftentimes we must ask not only, ‘What is the law?’ but also, ‘What should the law be?’”
  • 18. Link to the Internet
    • Clicking on the orange button below will link you the website for this book. (You must first have an active link to the internet on this computer.)
    • Once there, click:
      • Online Study Guide, then
      • Your choice of a chapter, then
      • Practice, then
      • Internet Applications.
    • You should then see web links related to that chapter.
    Click above to return to the slide show. Click Here!