Who Has Legal Jurisdiction?

• Position: Laws for cyberspace - Brief Article

A first-of-its-kind study on whose laws apply when and where in the borderless frontier of cyberspace has been issued by the American Bar Association Section of Business Law Global Cyberspace Jurisdiction Project. It examines topics increasingly important in cyberspace--consumer protection, privacy, intellectual property, banking, securities, taxes, and gaming--and how regulatory agencies in the U.S. and abroad must change to adapt to a new world of electronic commerce that is not dependent on physical location. The study identities a number of possible solutions to jurisdictional challenges, including establishment of a multinational Global Online Standards Commission to develop uniform principles and protocol standards, development of new online forms of dispute resolution, and usage of programmable electronic agents to automate Internet transactions and protect consumers from websites that do not meet their personal standards.

"Jurisdiction has become an intensely important subject to consumers and business people because of the new environment in which they find themselves engaging in transactions," cautions Thomas Vartanian, chair of the ABA Global Cyberspace Jurisdiction Project. "Anyone doing business in cyberspace needs to know what laws to obey, whether it be a question of what taxes are due and when, or what consumer protections apply to the sale of their products and services."

He maintains that rules are needed for cyberspace in order to maximize the efficiency of electronic commerce, and governments cannot write and approve laws fast enough to keep up with the changing technology. The study underscores the limited ability that any one state or nation may have in bringing greater certainty to cyberspace, and thus the necessity for a multinational commission that could work with governments to establish rules.

"Traditional aspects of jurisdiction over consumer protection and advertising practice are difficult to apply to the Internet," the study states. "The primary reason is that countries throughout the world have in place numerous different regimes to protect their consumers based on the `old world' presumption that consumers will shop in proximity to where they live and will not give up their sovereignty in applying these laws."

Vartanian suggests that electronic agents may eventually be employed to protect...