E-Commerce Law

E-Commerce Law Briefs: Week of April 21, 2008

Apparantly, we're about to reach the end of the Internet.  Accordingly to AT&T, the Internet's current network architecture will reach the limits of its capacity by 2010.

(Link:  AT&T:  Internet to hit full capacity by 2010 at CNET News)

Sixteen years after the collapse of the Soviet Union, "Web sites ending in the Soviet ".su" domain name have been rising - registrations increased 45 percent this year alone. Bloggers, entrepreneurs and die-hard communists are all part of a small but growing online community resisting repeated efforts to extinguish the online Soviet outpost."

(Link:  Back in the USSR:   Soviet Internet domain name resists death at SilliconValley.com)

An advertiser has sued Google Inc. in federal court in California alleging fraud in connection with Google's AdSense program.  "The plaintiff in the case, David Almeida, had signed up for Google ads to promote his private investigation business in Massachusetts. Because he did not want to buy AdSense ads, Almeida said he left the maximum per-click bid blank, believing 'optional' meant he could opt out of the AdSense program by doing so. Instead, it turned out the AdWords bid applied when he did not exercise that option, and he should have put 'zero' into the box to opt out, said his attorney, Brian Kabateck. "

(Link:  Google accused of deception in selling AdSense keyword ads at washingtonpost.com)

eBay has sued Craigslist for "unfairly diluting" its interest in the community ad site. 

(Link:  EBay sues Craigslist ad website at BBC News)

E-Commerce Law Briefs: Week of March 31, 2008

Surprise, surprise:  A recent article suggests that children are using social networking sites designed for adults.  "Research into internet use has found that, among children with internet access, more than a quarter of eight to 11-year-olds claimed to have a profile page on a social networking website. This is despite nominal age restrictions aimed at preventing pre-teens from using such sites."

(Link:  Adult social networking sites attract young users at guardian.co.uk)

Equally surprising is the suggestion that social networking sites don't generate large amounts of revenue when compared to other equally popular websites.  Fox Interactive, the Internet division of News Corp., may fall $100 million short on its $1 billion revenue forecast.  Social networking sites like MySpace and Facebook have tens of millions of users but generate relatively little revenue.  For example, the 80 million unique monthly visitors to MySpace generate well under $1 billion in revenue for News Corp. whereas Yahoo! has just over 50% more visitors and generates more than seven times the revenue.  Virtual communities don't generate substantial revenue, e-commerce sites that sell real-world products and services do (e.g., Amazon).

(Link:  News Corp. (NWS) Finds Out Social Networks Are Bad Business at 24/7 Wall St.)

E-Commerce Law Briefs is a weekly feature appearing each Friday afternoon on E-Commerce Law. Each week, E-Commerce Law Briefs will provide a brief summary and commentary on recent legal news affecting e-commerce businesses.

Take Control of Your Online Reputation

At the DC Bar presentation last week, I was asked what practical tips I would give to attorneys who are interested in protecting or enhancing their reputations online. Aside from the usual advice I would give any attorney about protecting their reputation, I suggested the following:

Practicing Law in the e-Court of Public Opinion: How the Internet Can Make Or Break Your Reputation and What You Can Do About It

Next Thursday, January 24, 2008, I'll be speaking at a DC Bar event entitled "Practicing Law in the e-Court of Public Opinion:  How the Internet Can Make Or Break Your Reputation and What You Can Do About It."  I'll be on a panel with Andrew Mirsky, moderated by Carolyn Elefant, discussing the role of the First Amendment and defamation law in protecting an attorney's reputation and providing practical tips for attorneys who want to protect or enhance their online reputation.

Other speakers at the event include David Lat, Editor-in-Chief of Above the Law; Mark Britton, CEO, President and Co-founder of Avvo.com; and Carolyn Elefant of MyShingle and Legal Blogwatch.  If you can't be in Washington, DC to attend the event in person, you can sign up to listen in by telephone.

See this press release for more details.

1-800 Contacts Files Its Latest Keyword Advertising Suit in Utah

Yesterday, Eric Goldman posted that 1-800-Contacts has filed its latest keyword advertising suit in federal court in Utah.  The company is apparently hoping for better luck than it had in its earlier forays into trademark litigation. 

E-Commerce Law Briefs: Week of April 30, 2007

A report published this week says that cybersquatting, domain kiting, phishing, and click fraud are major threats to recognized commercial brands. "A four-week survey of public Web sites completed early in April found cybersquatting posed the greatest threat to brands. Phishing--the criminal use of e-mail to trick consumers into divulging passwords, credit cards and other personal details--and domain "kiting"--the rapid registering and dropping of similar-sounding Web site names--are on the rise. The study tracked daily mentions on 134 million public Web records for the world's top 25 brands, along with major brands from eight industrial categories such as autos, apparel, food and high tech. The study ran from March 9 to April 6." During the four-week study, each of the brands suffered an average of 286,000 instances of cybersquatting; 50,743 examples of click fraud; 21,093 instances of e-commerce fraud; and 11,015 examples of domain kiting.

While this study may have addressed only the top brands worldwide, its results illustrate the problems faced, on a somewhat smaller but no less dangerous scale, by companies with nationally or regionally recognized brands. In the Internet Age, the importance of diligently and aggressively enforcing a company’s intellectual property rights cannot be underestimated.  To survive, e-commerce businesses must have strategies in place to protect their domain names and other trademarks, to enforce their copyright rights pertaining to original content, and to protect themselves from click fraud.

(Link: Major brands see rise in online fraud at CNET News)

Google has stopped the online advertisements "hijacked" by online criminals who used them to obtain banking and other personal information from Internet users. "The ads, linked to 20 popular search terms, directed those who clicked on them to a booby-trapped site where their information could be captured."

Computer security experts doubt that the criminal use of the advertisements will affect Google’s AdWords program which accounts for the vast majority of the search giant’s revenue and $1 billion dollars for the first quarter alone.

(Link: Google halts `hijacked' ads used to steal personal data at SilliconValley.com)

An online pharmacy in Minnesota has agreed to pay $300,000 in fines for filing prescriptions that did not comply with federal regulations. "The settlement resolves a civil lawsuit filed by the U.S. Attorney for the Western District of Wisconsin against Falk's Woodland Pharmacy Inc."

(Link: Internet pharmacy agrees to $300,000 fine at the Milwaukee Business Journal)

E-Commerce Law Briefs is a weekly feature appearing each Friday afternoon on E-Commerce Law. Each week, E-Commerce Law Briefs will provide a brief summary and commentary on recent legal news affecting e-commerce businesses.

Technorati Tags:  branding, trademark infringement, Google, online pharmacy

E-Commerce Law Briefs: Week of March 5, 2007

"A handful of police departments have utilized YouTube as a law enforcement tool, putting up video of suspects and eliciting help from the Internet-using public in identifying them. Experts say the idea has promise, but it's too soon to tell whether it will have staying power amid constantly evolving technologies and the difficulty of making a video stand out among millions. Some also see a risk of fruitless tips, misidentifications or privacy problems."

These criticisms could just as easily apply to the broadcasting of surveillance camera video on the local evening news, a practice which is commonplace in many jurisdictions when police require community assistance to identify suspects. YouTube may reach a different audience but the concept is the same.

(Link: Police Turn to YouTube to Catch Suspects at washingtonpost.com)

Two independent sources estimate that U.S. consumers spent more than $33 billion online last quarter. Though online spending is still a fraction of total consumer spending, it is growing at a rate of more than 25 percent annually.

The e-commerce industry is growing at a substantial pace. As it does, law schools and firms must adapt to serve the unique legal needs of these clients.

(Link: New numbers show e-commerce spending tops $33 billion at Washington Business Journal)

Wikipedia plans to ask contributors who claim particular expertise on a subject to verify their credentials. The change in policy follows the discovery "that a high-ranking member of Wikipedia's bureaucracy used his cloak of anonymity to lie about being a professor of religion."

After his fraud was discovered, the contributor seemed to blame the whole incident on Wikipedia’s liberal concept of collaboration, which permits anyone to submit or edit site information. In an apology written to the Wikipedia community, he is quoted as saying: " ‘It was, quite honestly, my impression that it was well known that I was not who I claimed to be, and that in the absence of any confirmation, no respectible (sic) publication would print it.’ " 

This is yet another example of why courts should not rely on Wikipedia as authority for any disputed fact that is material to a case.

(Link: After flap, Wikipedia wants ID from self-proclaimed experts at SilliconValley.com)

E-Commerce Law Briefs is a weekly feature appearing each Friday afternoon on E-Commerce Law. Each week, E-Commerce Law Briefs will provide a brief summary and commentary on recent legal news affecting e-commerce businesses.

Technorati Tags:  YouTube, Wikipedia

AOL Sees Over One Billion Pieces of Spam Every Day (and Other Fun Facts)

Aside from being legally illuminating, judicial opinions often provide interesting tidbits of factual information.  In reviewing the Virginia Court of Appeals' opinion in Jaynes v. Commonwealth, --- S.E.2d ---, 2006 WL 2527678 (Va. App. 2006), we learned that:

• "AOL employs 30 people on its spam response team and receives 7 to 10 million complaints each day regarding spam";

• "Over 1 billion pieces of spam attempt to enter AOL's private network daily"; and

• "AOL typically blocks 70-80% of the e-mail traffic that attempts to pass into its network because it comes from IP addresses that have a history of sending spam."

For more information about the Jaynes opinion, see Virginia Appeals Court Affirms Nation’s First Felony Spamming Conviction.

Technorati Tags:  spam, Virginia Computer Crimes Act

Domain Name Business is Booming

Driven by the Internet advertising boom, CNNMoney.com reports that "the market for registering and trading domain names could reach $2.5 billion this year." The market’s growth is greatest in country-specific extensions, which do not suffer from the saturation apparent amongst dot-com domains.

For more information, see Staking a claim on domains beyond dot-com on CNNMoney.com.

Technorati Tags:  domain name

Surprise! Google Says Click Fraud Problem is Exaggerated

On the heels of reports that Google is joining Yahoo and MSN to address the click fraud problem, Google has released a report criticizing earlier attempts to quantify the problem as exaggerations.

According to this article in the Washington Post:

"Google said reports about click fraud have exaggerated the problem and could scare away advertisers. In its report yesterday, the company attacked the methodology used and conclusions drawn by click-fraud consultants, arguing they either lacked the technology to differentiate between a fraudulent click and a Web page reloading or that their technology improperly counted a single click as multiple clicks. Google cited specific examples of such methodological problems.

The reports ‘have led to vastly inflated estimates’ of the problem, said Shuman Ghosemajumder, Google's product manager of trust and safety. ‘We saw media reports and data from consultants submitted by advertisers and it didn't make any sense. This report details the flaws and explains the discrepancy. We want to help consulting firms.’"

As we’ve previously posted, declining advertiser confidence has forced the largest pay-per-click advertising companies (Google, Yahoo, and MSN) to finally address the click fraud problem. Google’s latest report is an attempt at damage control. Hopefully, it will lead to an honest appraisal of the problem and the granting of additional assurances to participating advertisers.

For more information, see Google Says About Click Fraud Are Overblown in the Washington Post and Google calls click fraud estimates overblown on CNET News.

Technorati Tags:  google, click fraud