Legal Aspect of Applying E-Commerce in Business

Applying E-Commerce in Business

Legal & Legislative Aspect



The Internet has been an influential sector of human life for the past decade. With time and with better advancements the value and the importance of the internet are increasing. Today a significant use of the internet is for its service towards the e-commerce sector. Vuckovic et al. (2018) research portrayed that due to the adoption of e-commerce business model, there is an increased threat of identity theft in the cyber world. Their research was based on analysing the physical security and monitoring measures adopted by various organisations to assess the magnitude of identity theft. Their results found that user’s behaviour plays a significant role in both online and offline interaction for the crime frequency. Similarly, Barkatullah and Djumadi (2018) study how self-regulation can be a tool to protect consumers when it comes to their rights. Their study highlights the fact that the US and EU both have different views in this regard as the US emphasises self-regulation while EU pushes legislative measures. Moreover, the crimes in e-commerce reflect the extinction of adopting measures that benefit the global internet economy and instead many regulations and legislation are formed, varied and processed to cater to this emerging issue in E-commerce. The e-commerce providers guarantee better efficiency, delivery and better quantity in product service and online shopping. With time every major organisation and brand is working effectively towards this mean, but with increased involvement and consideration of online transactions and shopping, giving rise to cyber-crime. International law for these threats does exist, but they can be recognised as outdated and not uniform as the laws and legislation of each country differ from others (Lim, Leung, Sia, and Lee, 2004). The traditional patterns of international law lack efficiency and are slow to mitigate this threat. The purpose of this paper is to realise the importance of e-commerce in the internet world, issues of a contract for online business, regular security breaches of customers while shopping or e-retailing and the conflict of the laws applied in e-commerce concerning data protection and right to privacy. Kiskis (2010) suggests that the law becomes a considerable hurdle to harmonise the electronics division, but threats like cyber attack are to be dealt with as the primary priority i.e. the security of confidential data.

Historical Background:

Since its emergence, the retail business has found the top flight. This innovated facility has set new standards and is progressing with time. Herbert and Justin (2011) believe that every successive year retail sale is growing due to e-commerce while James (2012) argues that proper taxation is not allocated upon e-commerce, not giving the government enough vitals from its revenue generation. However, Yang (2011) points out that social privacy is not at its best with e-commerce and the facility creates a risk of exposure. The views and certainties of people concerning e-commerce differ as the facility may provide efficiency but can even be a headache at times. It was made a facility of its calibre since the 1970s. During this time, with the help of electronic data interchange(EDI), the commercial transaction through electronic measures found its decline. The system became open for business in 1991, and since 1994 it started impacting the international market. With time e-commerce changed the shape and the trend of the retail business and influenced it towards an era of its peak. In the twenty-first century, e-commerce became an integral part of the retail department and has improved its capabilities time after time, allowing boundary-less interactions for shopaholics with their favorite brands. (Clarke, 2015).

Online Transactions & Its Legal Impact

E-commerce model is not only for shopaholics, but every transaction that happens online via some use of authentication and credential sharing is also under the jurisdiction of e-commerce. De Groote (2009) study has shed light on the 2002 Australian High court decision under the case of Dow Jones/Gutnick-decision where it was implied that internet is a powerful platform for communication and its continuous worldwide acceptability implies to several discussions under tort jurisdictions. His study examines the different legislative views of the regulation 44/2001 article 5 subsection 3, where EU implies the personal jurisdiction under tort crimes and the place where the damage has occurred. It also says that EU law implies the long arm statutes and the Due Process Clause which are also applied in some leading American cases under internet jurisdiction. His views later in 2018 were vouched by (Barkatullah and Djumadi, 2018).

Furthermore, Iman (2018) insists that the multinational telecommunication industries are competing to engage better mobile transaction measures. According to her research, this competition is vital to facilitate many users with better and much secure mobile transactions proving e-commerce with a head start for better sales and revenue. In contrast, (Yang, 2012) suggests that protection of privacy is weak, legal protection is imperfect, and network monitoring is lacking which contributes to the privacy of citizens being violated as it creates difficulties in judicial protection under the law.

Security Breaches on Online-Databases

Herbert and Justin (2012) worked upon informative research concerning e-commerce, and they claim that as e-commerce business increases and utilises new technologies, e-commerce companies are likely to see a surge in intellectual property issues and litigation. The database of the videogame company ‘Sega’ was hacked and sensitive information of 1.3 million customers was compromised. These security breaches often occur when sensitive customer data is sent via email without encryption (Perez, 2011). Nevertheless, Xu and Cai (2004) is a strong believer in restricting identity theft, and according to his research, the suspects can be detected by analysing their behaviour. As the identities of millions of veterans were stolen, if identity theft is approached than the difference in behaviour of the culprit can be the determining point to penalise the suspect. By avoiding security protocols data of many users has already suffered. For instance, in a Veteran’s Administration incident the data and records of 26.5 million Veterans were stolen from the home of an employee becoming a significant example of data theft. Such incidents often lead to identity theft (Kumar and Hasani, 2016). E-commerce being a sizeable online business is prone to such threats. The legislative and regulative measures are not strong enough to avoid infringement of these crimes such as Kiskis (2010) argued that harmonisation of legal regulations at EU is limited, which causes numerous problems such as jurisdiction shopping.

Data Protection & The Right to Privacy

When considering international law, it is still outdated and not uniform enough to launch a great deal of integrity around the globe for better data privacy. In response to cyber attacks, some international courts only proceed when the damage to privacy is done, or the cyber attack is well investigated. (Blythe, 2014) thinks that customers are to be negated with their rights and the US and the European Union are working at self-regulation for intact legal protection of e-commerce customers, while the research was mainly based on Vietnams electronic law, proclaiming to emphasise on the e-signature replacing handwritten signature. The study suggested having Certification Authorities (“CA”), for all types of copyrights and infringement claims. Several researchers have recently critiqued that EU regulations of e-commerce dealings are limited to as compared to other countries legislation. In contrast, Havu (2017) shed light on the EU digital market strategy; the study elaborates the fact that the recently EU legislative proposal and action were taken for in terms of consumer protection and competition issues regarding digital marketing is overly emphasised apart from its practical significance.

Moreover, the article depicts that measures taken are not a full remedy to the prevailing issues. Only the attacks of significant margin are penalised, and the jurisdictions are passed when the crime is well evident. Rather than being at the very top to deal against any cyberspace or to punish any offence to the right to privacy. Hence the processing is much slower and requires a specific quantity to be well ignited (Bagheri and Hassan, 2016). E-commerce has faced much false due to lack in data protection, and there have been a lot of financial uncertainties for consumers due to the leakage of confidential data.


The paper critically evaluated some past and recent researches on the e-commerce related legislation and regulations and its impact on the community. It is an efficient and agile way of doing business, and for decades to come it will continue to be but has numerous security risks. Furthermore, contracts are becoming a prominent part of the online business department and may influence e-commerce. This brief research suggests that boundary-less-ness of virtual businesses has allowed many businesses a sense of liberty and a form of convenience along with the legal implications and legislative concerns of e-commerce which deserve greater attention from regulators and legislators. However, it has been observed that limited research and efforts have been put forward to address this emerging issue. There is extensive research gap and limitations of this paper which has hindered to cover all aspects of legal issues surrounding the e-commerce environment.