E commerce and cyber law:
It is very crucial for any individual or corporate to fully comprehend and comply with the cyber law stipulations relevant to their e-commerce initiative. What is e commerce in cyber law? How important is it to ensure that your ecommerce activity is following the guidelines of the Cyber Law or Internet Technology Law with respect to the various jurisdictions? And how vital is it to avail the counsel of an experienced and knowledgeable cyber lawyer to ensure that not only are you following all the prescribed mandatory laws, but also are protected from the ever growing menace of ecommerce cyber crime which is becoming an ever present threat?
E-commerce is exponentially growing in strength as a continuously growing number of consumers prefer and choose to transact online. We are living in a world that is fast transforming and evolving into a cyber landscape, and any entity which aims at surviving, sustaining and succeeding in their cyber commerce endeavors must address and include engagement with cyber law services as an indispensible part of their business strategy. The world has been impacted by the Covid-19, with no country escaping from its effect. One of the dominant ways to maintain social distancing measures has been to order everything online. The ecommerce industry has seen a skyrocketing growth as customers have chosen to veer away from brick and mortar based services, to shop online for most of their needs, as well as engage the internet for payments and accessing information.
Failing to be cyber compliant will show up as being negligent and not following the requisites of the cyber legal aspects relevant to the business. Internet laws in countries around the world are constantly evolving and developing to provide a proper framework to conduct the ecommerce transactions, as well protect businesses and consumers from the equally fast evolving malevolent attempts by cyber criminals to attack and cripple businesses, sometimes to demand ransom, and sometimes just out of sheer ill-intent to damage brand reputation. The role of a cyber lawyer in your ecommerce business commences from the very initial stages and is an ongoing relationship which helps shape, guide and protect the cyber legal standing of your ecommerce initiative.
What can ecommerce businesses do to save precious hours, unprecedented amount of money, protect their brand reputation and avoid their customers’ private data from being breached, amongst a host of so many other inconveniences caused by non-compliance of cyber law? The best way is to begin with the relationship between e-commerce and cyber law.
Cyber Law or Internet Law is applicable and relevant to each and every internet, online or cyber transaction or engagement which takes place on the world wide web. There is no exchange which occurs in cyber space which can escape the ambit to relevant internet technology laws which govern the said aspect of the specific.
How does cyber law perceive ecommerce? The ambit of Internet Technology Law with reference to ecommerce, encapsulates and envelopes any and all transactions executed via the internet by accessing the World Wide Web, to offer or deliver property, goods, services, provide data, and sell, buy, rent or lease, any commodity or service.
Hence the scope of cyber law in e-commerce is a defining aspect with will dictate the legal status and future direction of the ecommerce entity. It is judicious to understand when to seek the counsel of a dependable cyber law firm which provides the advice of experienced and reputed cyber lawyers, who are well versed with ecommerce cyber laws and will provide the necessary guidance to become cyber law compliant. A cyber law advocate will also have handled ecommerce cyber crime cases and bring precious experience to the table.
We at Netlawgic, bring your both commendable experience backed by a over a decade of experience in guiding and helping clients with all aspects of cyber law, and an intent to provide the highest standards of excellence and professionalism, thereby giving you an opportunity to continue maintaining undeterred focus on your core business.
E-commerce is based on the traditional principles of commerce i.e. buyers and seller come together to buy goods or services in exchange of money.
Money has taken various new formats and the ways we collect payments are changed from Currency to cards, online wallets, and mobile wallets.
When it comes to monetary transactions then there are various regulatory measures that have to be complied with in order to setup an E-commerce business.
The primary Legal Compliance for E-commerce
- Registering a Domain Name in compliance with Trade Mark Law
- Hosting a Domain Name in compliance with International Private Law
- Uploading contents to the website in compliance with Copyright Law
- Enabling online payments in compliance with RBI mandate
- Search Engine Optimization in compliance with Anti Competition Law
E-commerce websites operating in India are required to follow many laws of India including the Information Technology Act, 2000 (IT Act 2000). As per the IT Act, 2000 these e-commerce websites operating in India are Internet intermediaries and they are required to comply with cyber law due diligence requirements (PDF) as well.
As per IT
The legal requirements for undertaking e-commerce in India also involve compliance with other laws like contract law, Indian penal code, etc. Further, online shopping in India also involves compliance with the banking and financial norms applicable in India.
What are the Legal Issues that May Possibly Arise for the E-Commerce Players in India?
Both the Indian Contract Act and the Information Technology Act, 2000 must be read together to recognize the legal validity of e-contracts. Thus, e-contracts are governed by the basic principles of contract under the Indian Contract Act.
Essentials of Contract:
- An offer needs to be made
- In many transactions (whether online or conventional) the offer is not made directly one-on-one. The consumer ‘browses’ the available goods and services displayed on the merchant’s website and then chooses what he would like to purchase.
- This is actually an invitation to offer and hence is revocable at any time up to the time of acceptance
- The offer needs to be accepted
As stated earlier, the acceptance is usually undertaken by the business after the offer has been made by the consumer in relation with the invitation to offer.
E-contract can be formed through
- Web Site Forms
- There has to be lawful consideration
Any contract to be enforceable by law must have lawful consideration, i.e., when both parties give and receive something in return.
- Therefore, if an auction site facilitates a contract between two parties where one person provides a Gun as consideration for purchasing an mp3 player, then such a contract is void.
- There has to be an intention to create legal relations
- If there is no intention on the part of the parties to create legal relationships, then no contract is possible between them.
- Usually, agreements of a domestic or social nature are not contracts and therefore are not enforceable, e.g., a website providing general cyber security related information and tips.
- The parties must be competent to contract
- Contracts by minors, lunatics etc. are void. All the parties to the contract must be legally competent to enter into the contract.
- There must be free and genuine
- consent Consent is said to be free when there is absence of coercion, misrepresentation, undue influence or fraud.
- The object of the contract must be lawful
- A valid contract presupposes a lawful object.
- Thus a contract for selling narcotic drugs online is void.
Also, Section 10A of the Information Technology Act, 2000 (“IT Act”) provides the validity of the e-contracts.
On e-commerce websites that operate in an online environment, the possibility of minors entering into contracts is very high. Hence, it is crucial for an online business portal consider such possibility and provides a form on the website stating that the individual with whom it is trading or entering into the e-contract has attained the age of majority.
2. Data Protection
Security of the information provided during an online transaction is a major concern.
The Information Technology (Reasonable security practices and procedures and sensitive personal data or information) Rules, 2011 and the Section 43A of the IT Act together provide a structure and guidelines for the protection of data in India.
It is required of the Company to take all reasonable precautions to prevent any corruption, damage, loss or destruction of the private information and/ or data, even upon the termination of the contract between the parties.
The contracts often have specific clauses to deal with such privacy concerns and they bind all employees, agents, and subcontractors.
3. Intellectual Property Rights
E-commerce websites are designed and sometimes operated by other parties specializing in the field. Often the content is also managed by a third party. Thus, unless the agreement between the parties specifically provides the IP rights, there is a possibility of infringement subject to the trademark, copyright or patent on an online platform.
E-commerce legal issues have seen a generation of new players and the merging and acquisition between several old players. This has enabled development of new services, distribution channels and far greater efficiency in business activities than ever before. This development has the possibility of leading to certain competition issues with respect to the development of strategies for growing the network and maintaining their market power.
5. Other things to look out for
- Ensure proper online contracts
- Original documentation in relation to taxation
- Record retention obligations
- Exchange control regulation
- Import-export regulations
- Foreign data protection law
- Terms and conditions must be specific depending upon the nature of the goods & services offered and not generic.
- Reasonable efforts to prevent the unauthorized transaction