E-Business Law in Malaysia   SME Workshop – IIUM/SME Corp               Dr. Sonny Zulhuda        Ahmad Ibrahim Kulliyyah o...
Outline•   What is e-Business?•   Why e-Business?•   Web-based Business•   Consumer Issues•   Identity Theft•   What Law S...
What is E-Business?• Electronic Business:  Business/Commerce + Electronic  Processing• Electronic processing: use,  storag...
What is E-Business?• E-Business is not about a new type of business, but a new  method of business• So e-business is a new...
„Business relationship‟Include matters arising from all relationships of a commercialnature, whether contractual or not.  ...
Why E-Business?     Worldwide access and greater choice     Enhanced competitiveness and quality of      service     Cu...
Facts and Figures    2012 (c) Sonny Zulhuda   7
2012 (c) Sonny Zulhuda   8
Shapes of E-Commerce                  E-GOVERNMENT                       Government               Individuals        Busin...
Consumer Concerns  • Concern over the Product/service: lack of    information, safety, originality, legality, halal, etc. ...
Types of E-Commerce Websites                      • Informational                      • Interactive                      ...
Consumers-friendlyCommercial Websites• Information about business; e.g. information on the company  including its legal na...
Some Practices of E-Business• Online employment agency services   – E.g. www.jobstreet.com• Online bookshops   – E.g. www....
Online Employment Services        2012 (c) Sonny Zulhuda   14
Online Bookshops    2012 (c) Sonny Zulhuda   15
Online Auction  2012 (c) Sonny Zulhuda   16
Online Banking   2012 (c) Sonny Zulhuda   17
Online Travel Services      2012 (c) Sonny Zulhuda   18
Identity Theft
What is Identity Theft?• “Identity”   – Ie. personal credentials (name, IC#, Passport#,     address, contact#, medical rec...
Incidents of ID Theft• In the US, nearly 10 million Americans fell  victim of ID theft each year;• In 2003, FTC reported t...
Top 5 ways youth‟s identities are stolen                      Qwest Communications Teen Council Program1. Posting their re...
Essential#1Be moderate in your Social Networking             2012 (c) Sonny Zulhuda     23
Do‟s dan Don‟ts of SocialNetworking            • Be Moderate            • Define your „friends‟            • Make use of p...
Essential#2Beware of PHISHING e-mails        2012 (c) Sonny Zulhuda   25
Phishing  Fishing • Phishing identities can go through phone,   sms, video or e-mails. • Phishing e-mails commonly involv...
Some “Social Engineering” Methods• Winning a prize, lottery, gift, year-end bonus, etc.;• Business opportunities, investme...
The Legal Framework     2012 (c) Sonny Zulhuda   28
LEGAL FRAMEWORK FOR E-BUSINESS• E-Commerce Act                                               • Computer  2006             ...
E-commerce is based on Contract      Online banking      Online book purchase      Online movie ticketing                 ...
E-transaction Law in Malaysia• In 2006, Malaysian parliament passed the Electronic  Commerce Act (ECA) 2006 that:   – Prov...
Legal issues addressed bythe ECA 2006• The admissibility of electronic  message• The legality of paperless document• The r...
Formation and validity of                        contracts• In e-contract, an offer and the acceptance of an offer may  be...
Non-applicability of ECA 2006          •   Power of Attorney          •   The creation of wills and codicils          •   ...
How to start your own e-Business?• Set up a website:   –   Social networking page   –   Free blog   –   Paid blog   –   Fu...
Following up…•   Introduce yourself•   Introduce your products/services•   Explain your terms and conditions•   Introduce ...
Exercise:   Terms and Conditions of e-Business• Visit the selected e-commerce website and assess their  compliance to the ...
Exercise:   Terms and Conditions of e-Business• Choose from the following web:   – www.mudah.my   – www.lelong.com.my   – ...
THE END2012 (c) Sonny Zulhuda   39
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  1. 1. E-Business Law in Malaysia SME Workshop – IIUM/SME Corp Dr. Sonny Zulhuda Ahmad Ibrahim Kulliyyah of Laws International Islamic University Malaysia
  2. 2. Outline• What is e-Business?• Why e-Business?• Web-based Business• Consumer Issues• Identity Theft• What Law Says• Setting up Your e-Business2012 (c) Sonny Zulhuda 2
  3. 3. What is E-Business?• Electronic Business: Business/Commerce + Electronic Processing• Electronic processing: use, storage, transmission or representation of electronic data, including text, sounds and visual images. 2012 (c) Sonny Zulhuda 3
  4. 4. What is E-Business?• E-Business is not about a new type of business, but a new method of business• So e-business is a new option for business people and enterprises to trade, market, sell and offer their old or existing products and services, e.g.: – Selling books online – Selling phones online• With this new method, new products and services also emerge with the growth of innovation and technologies, e.g.: – Web design service – Selling ring tones for mobile phones 2012 (c) Sonny Zulhuda 4
  5. 5. „Business relationship‟Include matters arising from all relationships of a commercialnature, whether contractual or not. EXPLOITATION JOINT VENTURE DISTRIBUTION AGREEMENT OR & OTHERS AGREEMENT CONCESSION COMMERCIAL INSURANCE REPRESENTATION OR AGENCY COMMERCIAL RELATIONSHIP INVESTMENT, FINANCING, CONSTRUCTION FACTORING, BANKING OF WORKS LEASING 2012 (c) Sonny Zulhuda 5
  6. 6. Why E-Business?  Worldwide access and greater choice  Enhanced competitiveness and quality of service  Customization and personalized products  Elimination of intermediaries  Greater efficiency and lower costs  New business opportunities and new products and services 2012 (c) Sonny Zulhuda 6
  7. 7. Facts and Figures 2012 (c) Sonny Zulhuda 7
  8. 8. 2012 (c) Sonny Zulhuda 8
  9. 9. Shapes of E-Commerce E-GOVERNMENT Government Individuals Business E-BUSINESSE-EVERYTHING E-CORPORATIONS 2012 (c) Sonny Zulhuda 9
  10. 10. Consumer Concerns • Concern over the Product/service: lack of information, safety, originality, legality, halal, etc. • Insecure payment methods • Loss of personal privacy – Risk of misuse of personal information, e.g. use of Cookies; opt-in or opt-out • Cyber crimes: Computer fraud, hacking, virus, phishing, etc. • Sharing of Liability  to avoid BLAME GAME! 2012 (c) Sonny Zulhuda 10
  11. 11. Types of E-Commerce Websites • Informational • Interactive • Transactional 2012 (c) Sonny Zulhuda 11
  12. 12. Consumers-friendlyCommercial Websites• Information about business; e.g. information on the company including its legal name, its principal geographic address, a telephone number, an e-mail address for questions related to sales and service, credentials, etc.• Information about goods and services, e.g. specifications, terms of use, sample pictures, etc.• Information about transactions, e.g. costs, currency, payment process, delivery terms, warranties, confirmation process.• Effective communication, e.g. language, timing, records maintenance.(Guidelines by the OECD) 2012 (c) Sonny Zulhuda 12
  13. 13. Some Practices of E-Business• Online employment agency services – E.g. www.jobstreet.com• Online bookshops – E.g. www.amazon.com• Online auctions – E.g. www.lelong.com.my, www.e-bay.com• Online banking – E.g. www.maybank2u.com.my• Online travel services – E.g. www.airasia.com 2012 (c) Sonny Zulhuda 13
  14. 14. Online Employment Services 2012 (c) Sonny Zulhuda 14
  15. 15. Online Bookshops 2012 (c) Sonny Zulhuda 15
  16. 16. Online Auction 2012 (c) Sonny Zulhuda 16
  17. 17. Online Banking 2012 (c) Sonny Zulhuda 17
  18. 18. Online Travel Services 2012 (c) Sonny Zulhuda 18
  19. 19. Identity Theft
  20. 20. What is Identity Theft?• “Identity” – Ie. personal credentials (name, IC#, Passport#, address, contact#, medical records, financial records, credit worthiness, designation, brand name…)• “Theft”? – It seeks to include any form of misappropriation/abuse, not specifically a stealing. – Thus may include fraud, trespass, impersonation, etc. 2012 (c) Sonny Zulhuda 20
  21. 21. Incidents of ID Theft• In the US, nearly 10 million Americans fell victim of ID theft each year;• In 2003, FTC reported that ID theft alone costs nearly US$48 billion as annual costs for the businesses and an additional 5 bil per year for consumers;• In the UK, the ICO has reported over 277 breaches of significant volume since the His Majesty Revenue & Customs (HMRC) breach in November 2007;• MyCert of Malaysia reported in 2008 that Internet-related fraud dominates the security incidents attack.Zulhuda 2012 (c) Sonny 21
  22. 22. Top 5 ways youth‟s identities are stolen Qwest Communications Teen Council Program1. Posting their real name, address, date of birth and school on social networking sites;2. Talking with strangers through their social networking page -- and in some cases meeting in person3. Divulging social security numbers (like IC No.) on online job applications4. Unable to recognize "phishing" emails5. Storing personal information like their social security number and passwords in cell phones 2012 (c) Sonny Zulhuda 22
  23. 23. Essential#1Be moderate in your Social Networking 2012 (c) Sonny Zulhuda 23
  24. 24. Do‟s dan Don‟ts of SocialNetworking • Be Moderate • Define your „friends‟ • Make use of privacy setting tools • Think twice or thrice before posting • Mind the existing rules: legal and ethical • Social networking or Social not- working? 2012 (c) Sonny Zulhuda 24
  25. 25. Essential#2Beware of PHISHING e-mails 2012 (c) Sonny Zulhuda 25
  26. 26. Phishing  Fishing • Phishing identities can go through phone, sms, video or e-mails. • Phishing e-mails commonly involve the lure, the hook and the catch – The lure: a phisher who emails a large number of users with a message that appears to be from some legitimate institution. – The hook: a website that mimics the appearance of a legitimate target institution. – The catch: the making use of the collected information for fraud, forgery or theft. 2012 (c) Sonny Zulhuda 26
  27. 27. Some “Social Engineering” Methods• Winning a prize, lottery, gift, year-end bonus, etc.;• Business opportunities, investment, joint capital venture;• Romantic engagement, date, social relationship;• Security alert, password change, non-active online account;• Administrative works, database upgrading, status update;• Emergency nature, lost and found, criminal victims;• Personal problems, health, sex drugs, etc. 2012 (c) Sonny Zulhuda 27
  28. 28. The Legal Framework 2012 (c) Sonny Zulhuda 28
  29. 29. LEGAL FRAMEWORK FOR E-BUSINESS• E-Commerce Act • Computer 2006 Crimes Act 1997• Evidence Act • Penal Code 1950 • Comm & Multimedia Act 1998 Admissibility & Criminalisation of Enforceability of E- Abuse transaction Data Privacy & Consumer Security Protection• Personal Data • Consumer Protection Act Protection Act 2010 1999 • Sale of Goods 2012 (c) Sonny Zulhuda Act 1957 29
  30. 30. E-commerce is based on Contract Online banking Online book purchase Online movie ticketing Based on What type of Online marketing contract law contract?? Online flight booking Online investment Online auction 2012 (c) Sonny Zulhuda 30
  31. 31. E-transaction Law in Malaysia• In 2006, Malaysian parliament passed the Electronic Commerce Act (ECA) 2006 that: – Provides for legal recognition of electronic messages in commercial transactions – Provides for the use of e-messages to fulfill legal requirements – Enables and facilitates commercial transactions through the use of electronic means• This law adopted international guidelines by the UNCITRAL (a commission under the UN) 2012 (c) Sonny Zulhuda 31
  32. 32. Legal issues addressed bythe ECA 2006• The admissibility of electronic message• The legality of paperless document• The requirement of signature• The originality of document• Formation of e-contract: Offer and Acceptance 2012 (c) Sonny Zulhuda 32
  33. 33. Formation and validity of contracts• In e-contract, an offer and the acceptance of an offer may be expressed by means of data messages. 2012 (c) Sonny Zulhuda 33
  34. 34. Non-applicability of ECA 2006 • Power of Attorney • The creation of wills and codicils • The creation of trusts • Negotiable instruments 2012 (c) Sonny Zulhuda 34
  35. 35. How to start your own e-Business?• Set up a website: – Social networking page – Free blog – Paid blog – Full website/portal• Consider: – Your need? – Practicality& Affordability – Risks – Control – Regulation 2012 (c) Sonny Zulhuda 35
  36. 36. Following up…• Introduce yourself• Introduce your products/services• Explain your terms and conditions• Introduce your business process – Queries – Purchasing order – Transaction & payment – Delivery – After-sales? 2012 (c) Sonny Zulhuda 36
  37. 37. Exercise: Terms and Conditions of e-Business• Visit the selected e-commerce website and assess their compliance to the legal rules and best practices that you know, in terms of: a) Identity of the vendor and the products b) Privacy and security c) Consumer protection 2012 (c) Sonny Zulhuda 37
  38. 38. Exercise: Terms and Conditions of e-Business• Choose from the following web: – www.mudah.my – www.lelong.com.my – www.myeg.com.my – www.airasia.com 2012 (c) Sonny Zulhuda 38
  39. 39. THE END2012 (c) Sonny Zulhuda 39
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