Legislation, Electronic Commerce, and the European Union

The European Union has instituted numerous pieces of legislation that relate to conducting Electronic Commerce within its borders. As the internet came into existence in the 1990s and quickly flourished during the Information Age in the new millennium, the governments of individual countries and the overall governing force of the continent quickly enacted regulations to govern how this new technology could be used.

The Electronic Commerce Directive was adopted in 2000 and established a framework for how electronic commerce would be handled within the Internal Market. The overall goal of this directive was to establish transparency and provide legal certainty on the end of the both the business and the consumers. It set up rules that online service providers, such as electronic commerce, would have to abide by regarding transparency and information. It also set up regulations governing how these two entities would communicate with each other, the role of electronic contracts and their legal extent, and the limitations of liability for these service providers.

When it comes to liability, it is important that businesses completely understand how liability works. Failure to understand liability can result in significant financial penalties that could have been avoided. Therefore, businesses should take a minute to understand what they are responsible for when it comes to transmission of information. The service provider is NOT liable for information that is transmitted IF the service provider does not initiate the transmission, does not select the recipient of this transmission, or does not modify the information in the transmission. This includes automatically generated transmissions as well as manually initiated transmission. Therefore, if the business did initiate or modify the transmission, they are still responsible for its contents under the penalty of law.

This is a portion of the “mere conduit” section of the Electronic Commerce Directive. Often, when consumers access a website, their information is “cached” for easier access to this website in the future. Caching results in the storage of recipient IP addresses, links visited, and other information to provide for a more comfortable viewing experience on a future visit. Many times, the visitor does not even realize that their information is being cached. Under certain circumstances, an online service provider is responsible for any visitor information that is cached. This could contain sensitive information, so it is important that the online service provider take steps to ensure that this information is protected. Under the “caching” section of the Electronic Commerce Directive, the business is responsible for complying with regulations governing updating its information in the industry. The business also cannot interfere with the lawful use of technology. The business is also required to remove any information that is not relevant to the operation of the business if it is discovered. Businesses must also comply with all court orders regarding removal of information.

Finally, online electronic commerce entities often act as “hosts” of recipient information. If a visitor specifically requests that the business store the information, the company is not liable for the information if the business does not have knowledge of illegal activities being conducted on the site. If the business realizes that the information is being used for illegal activity, the business is legally responsible for removal of this information. For online companies that are operating online casinos or gambling organizations, it is important that they review the laws that are specific to the company they are operating within. The European Gambling and Betting Association provides a large overview of the legalities of online betting, online gambling, and casino operation; however, the countries are free to institute their own regulations as well. For example, in Italy and The Netherlands companies that provide sports betting in retail locations can also provide poker and casino games or so gratis gokken. This legislation is unusual in Europe so it is important that businesses read their licenses carefully to ensure they only offer online casino or gambling interfaces that are specific to their licenses.