4 9 September 2002

News:

California Attorney General Bill Lockyer filed on September 26 the first consumer protection lawsuit on behalf of the state targeting ‘spamming’, the practice of sending unsolicited emails in violation of state law. The suit names, PW Marketing LLC, a California company and its two owners/operators.

Data Protection professionals have welcomed EU plans to end the divergence between Member States data protection legislation which has impeded the free flow of data through Europe. “The Commission’s approach to these issues has been really sensible,” said Shelagh Gaskill, partner in City law firm Masons.

The U.S. House of Represen-tatives has passed in a voice vote, legislation, known as the Unlawful Internet Gambling Funding Prohibition Act (H.R. 556), sponsored by Con-gressman Jim Leach (Iowa) to prohibit financial instruments for illegal Internet gaming.

Features:

Data lies at the heart of business. The ability to acquire detailed information about clients, to offer personalised services, to develop precisely targeted marketing campaigns has been one of the driving forces behind online business.

Recently, two London-based companies, Quantum Man-agement and TLD Network, were found to be advertising website domain names to the UK and US public that could not be found by a normal search function without a modified web browser. The companies sent out unsolicited emails and advertised on their websites stating that, ‘the latest domain name extension had arrived.’ Whilst most domain names ending in .com, .net, or .uk can be accessed by all internet users, those advertised by the two companies were domain names with suffixes such as .brit, .usa, .scot and .sex, which are difficult to view on the worldwide web.

After four years of discussions the European Commission finally adopted the Distance Marketing of Consumer Financial Services Directive (the ‘Directive’) in June this year. The Directive will, together with the E-Commerce Directive, have important consequences for those providing financial services to consumers in the European Union, whether via the internet or by other distance means such as through telesales. The Directive must be implemented by 2004.

Financial services regulation covers a vast array of investment products from purchases of unit trusts and dealing in shares through to multi-million pound derivatives transactions. With the increasing internationalisation of these activities over the internet, the European Union (EU) produced the Electronic Commerce Directive (ECD) with the aim of maximising business conducted across the European Economic Area (EEA) by electronic means, including financial services. In the UK, the implementation date of the ECD is 21 August, 2002.

The Law Commission and Scottish Law Commission have issued a joint consultation paper proposing reform of the statutory controls over unfair contract terms in both consumer and business to business contracts. The proposals include extending the control over B2B contract terms so that all non-negotiated terms in B2B contracts other than ‘core’ terms, terms required by law and terms setting out the law, are subject to a ‘fair and reasonable’ test. This article considers the objectives of the reforms, the Law Commission’s provisional proposals themselves and the areas for consultation. The consultation period closes on 8 November 2002.

The arrival of new technologies and the manner in which they are used always gives rise to new problems for lawyers. The growing number of ways in which electronic services can be provided over the internet is no exception to this rule. This article examines some of the legal issues surrounding multi-platform services.

Over the last four years online banking has become popular with consumers and businesses alike as a convenient way to keep track of finances and manage accounts. However, the rapid growth of this sector has not been without its problems, not least because of consumer concerns about data security. In the July issue of e-commerce law and policy we considered the obligations upon businesses under the Data Protection Act 1998 relating to having in place appropriate security arrangements to protect customer data. In this issue we consider some of the practical implications of these requirements specifically in relation to online banking. For illustrative purposes we refer to Xco, a fictitious online banking service provider. Below is a brief recap of the general security requirements covered in the July issue.