B2B e-Commerce

1. B2B e-Commerce • International Issues • Legal Issues • The reach of law • Contracts • Web content • Ethical Issues • Taxes

2. International Issues The Internet is Global What issues face e-Commerce sites operating in an International environment?

3. International Issues • Language Issues • How many language versions of your site will you create? • How will you decide? • Translation costs can be considerable (25 – 50 ¢ / word) • Some automation support is available • When is automated vs. human translation desirable? • Localization includes cultural modifications in a translation

4. International Issues • Cultural Issues • You must travel the world before you will realize how easy it is to offend someone with behavior that is perfectly polite or innocent where you come from • There are tons of great stories about business ventures that crashed on the rocks of cultural misunderstanding • It is easy to incorporate offensive or adverse content into a web page that is viewed by visitors from another culture

5. International Issues • Cultural Issues (cont.) • Some cultures dislike using credit cards for purchases • Some cultures view shopping as a social experience • Many Europeans shop for groceries every day • Haggling is an integral aspect of shopping in many cultures • Your potential market may not be comfortable with key elements of e-Commerce • Some countries don't allow or filter Internet content based on religious or cultural preferences

6. International Issues • Infrastructure • Most countries don't have the same phone services and Internet connectivity that we enjoy here • Service is unreliable or 'noisy' in some areas • Some countries have a fixed per minute or per unit charge for any call, including ISP connections • Many countries have no competition for telephone services with little incentive for innovative services • Bribes or gifts are needed in many places for phone line installation or maintenance

7. Legal Issues "Companies that do business on the Web expose themselves to liabilities, often unintentionally, that arise from the environment of business today. That environment includes laws and ethical considerations that may bedifferent from those with which the businessis familiar."

8. Legal Issues • The Reach of Law • Governments exercise jurisdiction within a geographic boundary • Jurisdiction applies to people and property inside that boundary • Governments do not exercise jurisdiction over citizens and assets located in another government's jurisdiction (unless you invade the country)

9. Legal Issues • The Reach of Law (cont.) • Jurisdiction is automatically applied to residents of a state • Jurisdiction can be applied through other means • Forum Selection Clause of a contract in which the parties agree to submit to a particular jurisdiction in the event of a dispute • Long-Arm Statutes enacted by states give them jurisdiction over persons who transact business in the state • Application of these rules is unclear in e-Commerce

10. Legal Issues • The Reach of Law (cont.) • International jurisdiction is governed by treaty unless the parties are physically located in the country seeking to exercise jurisdiction • Assets located in foreign countries can be attached to satisfy local judgments • U.S. courts will enforce foreign judgments if personal jurisdiction can be established and if treaty provisions provide for support

11. Legal Issues • The Reach of Law (cont.) • Companies must be aware of their exposure to foreign legal processes • Companies must be aware of the actions that can be considered actionable in the countries where they are exposed • Companies must take steps to limit the ability of citizens of a country to use e-Commerce facilities if such use would be actionable and when the company is exposed in that country

12. Legal Issues • Contracts • A contract exists when there is an offer and an acceptance • There are some interesting nuances to offers and acceptances in retail sales • Publishing a catalog is not an offer • Placing an order is the offer • Accepting the order is the acceptance • The catalog is the advertisement that an offer at the published price is likely to be accepted Consider these stepsin the context of areal estate transaction

13. Legal Issues • Contracts (cont.) • When is a contract created in an e-Commerce transaction? • Do laws in different countries determine contract creation differently?

14. Legal Issues • Web Content • Web sites publish content for all the world to see • Web site operators must be very careful to ensure that they have the legal right to use any images, audio, or textual content that appears in their sites • Many companies are incredibly protective of their trademarks and have laws to back up their claims • Improper use of names or logos may imply endorsements and lead to legal action • Claims about products are subject to FTC regulations • Keep an eye on your web development team!!

15. Ethical Issues • 'Normal' Ethical Considerations • Companies should be guided by the same standards in their e-Commerce activities that they would apply to traditional commerce • Internet Culture and Ethics • Netizens have certain cultural expectations about behavior that sometimes fly in the face of normal practices • Information should be free • Privacy is paramount • Netizens can spread the word quickly when aroused

16. Ethical Issues • Privacy • Privacy is becoming increasingly important in Internet dealings • Americans have traditionally been private people and expect their privacy to extend to their online activities • Legislation and consumer pressures have served to shape privacy practices by companies • Keep an eye on your developers and watch those cookies • A privacy policy is an excellent idea

17. Taxes • The whole issue of taxes on the Internet is up in the air • Some tax issues, such as taxing online sales, are governed by the same tax laws that govern mail order sales • The ability of taxing authorities to detect taxable purchases over the Internet is sometimes difficult • The ability of sellers to detect when taxes should be collected can also be difficult and expose the seller to civil and criminal penalties

18. Taxes (cont.) • Nexus is established when a company has a presence in a jurisdiction • Many activities can create nexus • Operating a physical location such as a store, warehouse, or administrative office • Delivering products using the company's own trucks • e-Commerce companies must be deliberate when establishing nexus to avoid violating tax requirements