Going the ‘dot-com’ way

By Sharil Tarmizi

Since the late 1990s many businesses have been interested in investing in the internet to expand their market, reach out to consumers globally as well as provide a more convenient business platform.

Just about every other day we hear stories of companies or organisations going ’dot-com’ or for that matter, ‘dot-net’. Indeed, the dot-com phenomenon is moving at such a feverish pace that almost anything and everything that can be established in the physical world has already been or is in the process of being ’dot-comed’.

Examples we commonly hear about include e-commerce, e-banking, e-news, e-trading, e-gambling, ‘B2B’, ‘B2C’ and ‘B2G’, just to name a few. Many companies and organisations want to go the dot-com way either for fear of being left out or left behind in this new millennium.

For some, it is the promise of many-fold returns on their investments, encouraged by the success and valuations of the biotech and internet sectors of the stockmarket. Whatever the motive, there are, from a legal standpoint, some things to bear in mind when going dot-com.

This article is not intended to provide the reader with a solution when conducting business in the ‘New Economy’ but rather serves as a gentle reminder that there are things closer to home that may have to be complied with, notwithstanding that the activity is carried out in the cyberworld.

By its very nature the internet is borderless and as such, it is difficult to determine certain issues such as jurisdiction. Strictly speaking, the internet does not have a universal law governing it (except maybe the ‘law of chaos’) but nevertheless, it does not mean that the cyberworld is absolutely lawless.

In this respect, the regulatory issues that one may need to be aware of include those in one’s own home country as well as the countries of their primary target markets, in particular those governed by international conventions.

Particular attention should be paid to your home country’s import/export regulations, consumer protection legislation, price control laws, exchange control regulations, sales tax, customs and excise duty as well as specific requirements for permits and licenses.

As an example, an online dealer in antiquities may need to keep up to date with laws regarding the same (i.e. regulations of export trade in antiquities and art treasures) whereas an online travel operator will need to be familiar with legislation concerning the tourism industry.

As a rule of thumb, it is often advisable to follow the best practices applicable to regular, physical businesses. From a legal standpoint, it may be said that the law does not distinguish between activities carried out in the cyber and physical worlds and therefore, it is imperative that businesses be aware of any laws that could apply.