Laws of .com

Volume VI, Issue 11: May 29, 2008

South Africa's New Online Gambling Law

Google Belgian Copyright Challenge Continues

Department of Justice and National Association of Realtors Reach Proposed Settlement

Survey: Companies Paying To Read Employee Email

Order Enjoining Future Defamatory Web Comments is Unlawful Prior Restraint

First Time Success for U.S. Federal Government in Internet Piracy Case

Chicago Sues eBay for Taxes on Online Ticket Sales

South Africa's New Online Gambling Law

Internet gambling is not regulated in South Africa, but has been technically illegal. However, South Africa’s parliament has just passed new legislation legalizing and regulating the industry, and the law is primarily aimed at dealing with the negative effects associated with gambling.

The legislation deals specifically with issues of problem gambling, player protection, licensing, taxation and advertising. The law also provides for registration of users with licensed gambling sites, and the requirement that users sign affidavits confirming that they are of the age of majority. In addition, there is provision for a mechanism to monitor addictive gambling behaviors and to limit credit where appropriate.

The new laws attempt to address an industry that is reportedly beset with crime and is vulnerable to money laundering and terrorism financing. There is also an economic incentive for the government to regulate this industry to ensure that taxes associated with gambling revenues are properly remitted.

For additional information, visit:
http://africa.reuters.com/top/news/usnBAN950662.html

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Google Belgian Copyright Challenge Continues

In 2006, Internet search giant Google launched its Google News service in Belgium. Shortly afterwards, a newspaper copyright group representing Belgian French-language publishers sued Google for copyright infringement. Eventually, a Belgian court ruled that Google could not post headlines and links to news stories posted on Google News and stored in its search engine cache without permission. Google appealed that decision, and has attempted to negotiate a settlement.

The Belgian copyright group says that it calculates its damages at between €32.8 million and €49.2 million (about US $51.7 million to US $77.5 million), and has called on Google to pay a provisional amount of €4 million (about US $6.3 million).

Google has not commented on the damages claims because it has not yet received the relevant documents.

This case is clearly important to Google – if its reliance on fair use and related doctrines for the legitimacy of services like Google News fails here, it could face many more similar suits elsewhere. On the other hand, coming up with a workable settlement arrangement could help Google resolve the situation in Belgium and avoid similar problems elsewhere.

For additional information, visit:
http://www.iht.com/articles/ap/2008/05/27/business/EU-FIN-Belgium-Google-Vs-Newspapers.php

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Department of Justice and National Association of Realtors Reach Proposed Settlement

The National Association of Realtors (“NAR”) has reached a proposed settlement with the United States Department of Justice to resolve a civil antitrust lawsuit filed by the Department in 2005. The lawsuit challenged alleged discriminatory NAR policies and related rules that allowed traditional real estate brokers to withhold their listings from certain online brokers.

Under the terms of the proposed settlement, NAR will repeal its anticompetitive policies and rules that were based on these policies. NAR will enact a new policy that guarantees that Internet-based brokerage companies will not be treated differently than traditional brokers. Under the new policy, brokers participating in NAR-affiliated listing services will not be permitted to withhold their listings from brokers who serve their customers through virtual office websites. Such brokers will not be excluded from membership in listing services based on their business model. 

For additional information, visit:
http://www.usdoj.gov/opa/pr/2008/May/08-at-467.html

For a copy of the terms of the proposed settlement, visit:
United States of America vs. National Association of Realtors

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Survey: Companies Paying To Read Employee Email

The fifth annual corporate survey, commissioned by email security provider Proofpoint and conducted by Forrester Research, has found that 41 percent of U.S. companies with 20,000 or more employees are paying staff to read or otherwise analyze the contents of employees' outbound email, with 22 percent employing staff primarily or exclusively for that purpose. Forty-four percent of the companies surveyed said they investigated an email leak of confidential data in the past year and 26 percent said they fired an employee for violating email policies.

The respondent companies indicated they are worried about employees leaking company information on their blogs, message boards, and media-sharing sites such as YouTube, as well as on mobile devices. Eleven percent of the companies surveyed took disciplinary action against employees for improper use of blogs or message boards in the past year, 13 percent for social-network violations and 14 percent for improper use of media-sharing sites.

For additional information, visit:
http://www.net-security.org/secworld.php?id=6149

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Order Enjoining Future Defamatory Web Comments is Unlawful Prior Restraint

The California Court of Appeal has ruled that an injunction prohibiting a woman from posting “false and defamatory statements and/or confidential personal information” about her ex-husband online was an unconstitutional prior restraint on her free speech rights.

Thomas Evans sued his former wife, Linda Evans for harassment, defamation, and invasion of privacy. He sought and was granted a preliminary injunction against Linda, which enjoined her from publishing “false and defamatory statements” and “confidential personal information” about Thomas on the Internet. This was later reversed by the Court of Appeal, which ruled that it was overbroad, vague, and an unconstitutional prior restraint before trial.

A “prior restraint” is an injunction that “forbids a citizen from speaking in advance of the time the communication is to occur.” It is considered to be “the most serious and the least tolerable infringement” on the First Amendment right to free speech, and is considered to presumptively violate the First Amendment to the U.S. Constitution.

An order prohibiting a party from making or publishing false statements is an unconstitutional prior restraint. The only exception to this rule is if an order was issued after a trial and the order prohibits the defendant from repeating specific statements found at trial to be defamatory. Thus, under these principles, Linda cannot be prohibited from making alleged false statements until there has been a trial and a determination on the merits that the statements were defamatory.

A prohibition against the disclosure of confidential information also constitutes prior restraint. However, since the disclosure of confidential information could lead to the violation of an individual’s privacy rights, an order of prior restraint may be permissible under certain “compelling or extraordinary” circumstances. In determining whether such circumstances exist, courts generally apply a balancing test, weighing the competing privacy and free speech constitutional rights.

The Court of Appeal found that it could not properly undertake a balancing test, as the use of the phrase “confidential personal information” in the preliminary injunction order was too vague and ambiguous. In addition, an injunction must clearly define the prohibited conduct, and the reference to “confidential personal information” did not provide Linda with a reasonable basis to understand what she was prohibited from placing on the Internet.

For additional information and a copy of the decision, visit:
Evans v. Evans

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First Time Success for U.S. Federal Government in Internet Piracy Case

On May 22nd, 2008, Barry Gitarts, a member of an online piracy group known as Apocalypse Production Crew (“APC”), was convicted of conspiracy to commit copyright infringement in the largest criminal music piracy case in the United States. The jury’s federal court verdict marked the first time that the U.S. federal government has won a jury verdict against someone accused of illegally downloading music. Gitarts now faces up to five years in prison, a fine of $250,000.00 and is required to make full restitution.

Gitarts was regarded as a key member of APC, which was known to many as the first organized group to be involved in music piracy on the Internet. Gitarts’ involvement with APC in administrating a computer server that APC group members used to upload and download hundreds of thousands of pirated music and video copies spanned the course of a year.

According to the U.S. Department of Justice, APC members have a higher level of expertise and specialization with respect to releasing copyright music on the Web relative to average users of Lime Wire, another source of music and video downloads. However, the impact of this differentiating point on future litigation is unknown. The Gitarts case is part of a larger continuing federal investigation into organized piracy groups that has resulted in 15 APC members being convicted and 56 total international convictions.

For additional information, visit:
http://news.yahoo.com/s/pcworld/20080523/tc_pcworld/146252

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Chicago Sues eBay for Taxes on Online Ticket Sales

The City of Chicago is suing eBay and its subsidiary StubHub for failure to collect city amusement taxes on tickets for concerts and sporting events that are resold online through their websites. eBay, which takes the position that the tax does not apply, claims that paying such sales tax could put small business owners who operate through auctioneer websites out of business, as implementing or modifying tax collection systems would be prohibitively costly. On the other hand, it is estimated that states lose billions of dollars each year in uncollected taxes from online sales.

For more information, visit:
http://www.siliconvalley.com/news/ci_9323871

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