Saturday muse on the EU adopting the Brussels Regulation

[Marjorie Simmons <lawyer () carpereslegalis com>]

[The new EU legislation (see below), coupled with the Council
 of Europe's cybercrime treaty, and the EU Data Protection Directive
 (also below), will provide for some interesting litigation over the
 long jurisdictional arm of EU member states. It enlarges the liability
 issues for EU citizens and others by, among other things, complicating
 the due-diligence standards for security folks. If this directional path
 continues to be followed by the international wired community, I
 expect we'll fairly soon see a legal homogenization of the Net broad
 enough to warrant the creation of an international juridical body with
 some teeth, despite the nationalistic tendencies of human nature. (By
 'fairly soon', I mean before we're all dead, using the yardstick of legal
 evolution.)  As the Net exists only through its own defining nature of
 interconnectedness, so shall the law of the Net evolve, and our heirs
 will live in the first true global society that is, in part, an international
 police state primarily designed to value and protect commercial
 interests first.  Hopefully, the ironies of such lawmaking will not be
 sanitized out of the history books. At least there will be more computer
 security jobs, and fewer lawyers ....
  -- Marjorie ]

For more information on the French court's ruling in the Yahoo case see:
http://thestandard.com/article/display/0,1151,20331,00.html
and for the CDT's take on it see:
http://www.cdt.org/publications/pp_6.20.shtml.

~~~~~~

Marjorie Simmons, Esq.
lawyer () carpereslegalis com
http://www.carpereslegalis.com

~~~~~~

http://www.steptoe.com/WebDoc.nsf/LawNet-Main/Main

E-Commerce Law Week, Issue 131
*****************************************

Week Ending December 9, 2000

(E-Commerce Law Week is a free newsletter published by Stewart Baker and the
eTeam of Steptoe & Johnson LLP, Washington D.C.)

-    EU Adopts Brussels Regulation
Despite a fierce three-year lobby against it, the European Union's Justice
Ministers have reached agreement on a new law that will give consumers the
right to use their national courts to sue websites based in other member
states.  This so-called Brussels Regulation will enter into force in March
2001.  Since the law's introduction, business groups have consistently
argued that the proposed rules would hinder the growth of e-commerce in
Europe, by making small to medium-sized businesses unwilling to set up
websites for fear of being dragged through courts in other countries.  In
recognition of these concerns, at the last hour the Commission dropped a
clause that would have made any EU company operating a website vulnerable to
being sued in any member state.  Instead, the Regulation now allows cases to
be brought only where the online service is being "directed at" the
consumer's member state.


-    What Rules Apply to Online Auction Sites?  Everybody's Got A Different
Answer
As described above, the recently-approved Brussels Regulation will allow EU
online consumers who purchase goods or services from a non-EU Internet
vendor to sue the vendor in their own national courts.  Many e-commerce
lobbyists believe this type of regulation creates a nightmare of
extra-territorial jurisdiction for online companies, including online
auction sites.  Indeed, if the Brussels Regulation is applied aggressively
to online auctions, French Judge Jean-Jacques Gomez's November 20th decision
to extend French jurisdiction and order the U.S.-based Yahoo to prevent
French online users from viewing auctions of Nazi memorabilia may be just an
omen of the troubles that lie ahead for Internet businesses.  Indeed, the
French decision is now being echoed in Munich state prosecutor Manfred
Wick's investigation into allegations that Yahoo! Deutschland's online
auction site facilitated the unrestricted sale of Adolf Hitler's restricted
book, "Mein Kampf."


-    EU Postpones Decision on Online Taxation
European Union (EU) finance ministers have postponed plans to introduce VAT
(value-added tax) on online transactions, setting themselves a deadline for
the end of June next year to reach a decision.  A sticking point ever since
the debate over online VAT began, the primary stumbling block to an
agreement remains the question of how to charge VAT on transactions between
consumers inside the EU and sellers outside it.  According to Norbert
Schwaiger, a spokesman for the EU's Council of Ministers, the standstill was
expected.  "No decision was foreseen," Schwaiger said, "The ministers took
stock of the situation and it was agreed that a formula must be found that
secures member states their fair share of VAT revenues, while not putting
off online transactions with excessive administration."


-    Status of Foreign Consumer Privacy Law Implementation
Although there is no comprehensive U.S. consumer privacy legislation,
foreign laws may force U.S. businesses to develop and implement privacy
safeguards.  Canada's recently-enacted privacy bill (C-6) and the European
Union (EU) Data Protection Directive put pressure on U.S. companies to adopt
much stricter privacy standards than those currently required by U.S. law.
Canada's C-6 directly applies to Canadian firms and foreign firms doing
business in Canada, and these firms are in turn likely to require (via
contract) C-6 compliance of any foreign firms with whom they share
personally identifiable information.  However, if the EU Safe Harbor is any
indication, U.S. businesses are not in a hurry to comply with foreign
privacy laws.  In the month since the Department of Commerce began accepting
Safe Harbor compliance certifications, only 11 organizations signed up -- 10
of which are in the so-called "privacy business," such as the privacy seal
company TRUSTe.



Visit http://www.steptoe.com/WebDoc.nsf/LawNet-Main/Main for details on
these stories and more.

Questions and comments about the news in E-Commerce Law Week are always
welcome.  Please send your feedback to jlaszlo () steptoe com.

********************************************************
E-Commerce Law Week summarizes legal and other developments affecting
electronic commerce and security -- with special emphasis on Encryption,
Digital Signatures, Computer Security, Privacy, and related issues.

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