Internet Lawyer Blog
E-commerce transactions have become so common that legislators have had to keep up with the demand for regulations. Jurisdictional issues raise concerns of what law is applied in disputes over multi-state transactions. The state or federal laws of the United States, the domestic laws of another nation, international coalition laws, international treaties, or a combination of these laws could be applicable in a single case.
What federal and state laws may apply?
The Federal Trade Commission (FTC) is in charge of regulating e-commerce as a federal agency. The FTC has posted guidelines to help businesses navigate the myriad of e-commerce issues and factors that need to be addressed in order to do business across borders. Twenty-nine nations have signed on to the guidelines, including, but not limited to, United States, Canada, Japan, Germany, and Australia. The guidelines address fair business practices, marketing, commercial emails, consumer privacy, and recommended policies and practices. The laws that the FTC has passed for regulation of e-commerce transactions, include, but are not limited to, the CAN-SPAM Act of 2003, which set standards for email marketing, and Federal Trade Commission Act, which regulates all types of marketing and advertising.
The state regulations of e-commerce transactions come in the form of each state’s commercial laws, which govern the cases that are brought in that state’s courts. Each state has its own form of long-arm statute, which grants jurisdiction over individuals and actions in other states if certain requirements are met. The Full Faith and Credit Clause of the Constitution—under Art. IV. Sec. 1—allows the states to accept and enforce the rulings of another state’s court. A state’s long arm statute is regularly challenged when companies from foreign states argue that their connections with the state do not qualify it to be under that state’s jurisdiction. For example, a company’s contacts with consumers may fall within a range of no direct advertisement, to purposefully advertising to a state’s consumers, and directly intending to do business in that state. In fact, various cases have molded the necessary standards in order to establish personal jurisdiction through e-commerce transactions.
How can international laws be involved in e-commerce?
There are conflicts between international e-commerce laws. Many countries have used the UNCITRAL Model Law on Electronic Commerce in order to establish uniformity in the application of e-commerce regulation. The International Consumer Protection and Enforcement Network (ICPEN) was established for governments and organizations to deal with issues concerning cross-border transactions. The econsumer.gov website became part of the ICPEN network in 2001, and is a location where e-commerce violation complaints can be submitted against companies. Various e-commerce laws have been passed by coalitions like the European Union (EU) and Asia Pacific Economic Cooperation (APEC). Nations that carry great economic impact (e.g., China, United Kingdom, and Australia) have their own national e-commerce rules and regulations. From a practical standpoint, each business should track its transactions in foreign nations to determine if it has exposed itself to prosecution under international laws, and know what that nation’s laws are, and understand the treaties that may affect disputes that would arise from its cross-border transactions.
At our law firm, we assist clients with legal issues related to technology and e-commerce transactions. You may contact us to set up an initial consultation.