Audit, Compliance and Risk Blog

New Supreme Court Ruling Will Be Taxing to E-Commerce

Posted by Eric Robinson on Thu, Sep 13, 2018

The old maxim states that the only two things that cannot be avoided in life are death and taxes. While there still does not seem to be any way to escape our ultimate fate, until recently there was one way to legally avoid certain taxes.

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Tags: Internet, Business & Legal, Accounting & Tax

Facebook, Privacy and Your Business

Posted by Eric Robinson on Thu, Jun 28, 2018

Facebook and its chief executive, Mark Zuckerberg, are being criticized far and wide for the company’s lax privacy practices after it was revealed that the political data firm Cambridge Analytica had used a seemingly innocuous personality test to collect data on 87 million Facebook users, which it combined with data from other sources to develop psychological profiles that were used in support of President Trump’s 2016 campaign. A number of lawsuits have been filed against the site over privacy issues and the Cambridge Analytica incident in particular.

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Tags: Internet, corporate social responsibility, social media, directors & officers, Business & Legal

SEC Expands Public Company Cybersecurity Disclosure Expectations

Posted by Jon Elliott on Tue, Apr 10, 2018

The Securities and Exchange Commission (SEC) has just published Interpretive Guidance to “assist” public companies with evaluation and reporting of their cybersecurity risks. This Guidance expands similar SEC guidance issued in 2011, reflecting the growing importance of the issue and highly-publicized cybersecurity breaches during the intervening years. The following discussion summarizes the new Guidance, and provides context.

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Tags: SEC, Internet, directors & officers, directors, Corporate Governance, Business & Legal

NLRB Sends Mixed Signals for Future of Employee Electronic Communications

Posted by Linda Riedemann Norbut on Tue, Mar 20, 2018

On December 19, 2017, the National Labor Relations Board (NLRB) asked the U.S. court of Appeals for the Ninth Circuit to affirm the NLRB’s ruling in Purple Communications, Inc., a 2014 NLRB decision which ruled that employers must presumptively permit “employee use of email for statutorily protected communications on nonworking time.” The ruling applies to those employers who have chosen to give employees access to their email systems, and the presumption of employee rights can be overcome in only very limited circumstances.

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Tags: Internet, NLRB, Employee Rights, Employer Best Practices

Final Determination of Net Neutrality Fate Likely to be Slower Than Dial-up

Posted by Eric Robinson on Tue, Dec 19, 2017

On December 14, the FCC voted to rescind its “net neutrality” rules barring Internet service providers from either favoring or disfavoring certain online content over other content by providing faster, prioritized access to the favored content. As expected, the changes came in a three-to-two vote of the commission members.

This issue has had a convoluted history, dating back to when dial-up was the primary means to access materials online. In 2002, the commission decided that then-emerging broadband access should be classified under the law as an “enhanced information service,” which is subject to little regulation, rather than as a “basic telecommunications service,” which is more highly regulated, like a public utility.

For example, the regulation of old-fashioned telephone service as a basic service means that telephone companies cannot keep their customers from calling customers of other phone companies, or from receiving such calls.

The commission then tried to enact “net neutrality” rules in 2008 and in 2010, both of which were struck down by the courts because of the prior classification of broadband access as an enhanced service. So in 2015, the FCC reclassified Internet access as a “basic service” and imposed new net neutrality regulations on the basis of that classification. With the reclassification in place, the commission’s net neutrality rules were upheld by the courts last year.

Now the commission has voted to again classify Internet access as an enhanced service and rescind the net neutrality regulations. FCC Chair Ajit Pai has said that if Internet service providers unfairly favor some online content over others, the issue should be handled by the Federal Trade Commission as an anti-competitive business practice.

It is important to note that many of the concerns of net neutrality advocates are so far primarily theoretical. But without net neutrality regulations, Internet service providers could favor content from their corporate siblings or subsidiaries, or from content providers that have paid for such priority.

Without net neutrality rules in place, the accessibility of an individual business’s website or cellphone app could depend on the specific circumstances in their markets. Large companies may, for example, be able to afford prioritization from ISPs and dominant businesses may have enough customer support to avoid being deprioritized, so that customers would object if an ISP blocked or limited access. But smaller and independent businesses may not have the clout, in terms of either funds or user demand, to avoid having access to their online material slowed.

The FCC’s vote eliminating the net neutrality rules is not likely to be the last word on the issue. Several state attorney generals have already announced a court challenge and other groups are likely to file separate lawsuits. The changes will probably be put on hold until the court challenges are resolved. Some members of Congress have endorsed legislation on the issue.

In the Internet era, we’ve become used to instant answers and results, but it appears that the question of net neutrality, like many legal issues, will be resolved the old-fashioned way: slowly.

This column is for educational purposes only; it does not constitute legal advice.

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Tags: Internet, Business & Legal

For First Time, FTC Goes After Bloggers For Paid Endorsements

Posted by Eric Robinson on Thu, Nov 16, 2017

The Federal Trade Commission’s guidelines for testimonials and endorsements require disclosure of any payment or benefit that endorsers receive for their endorsements.

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Tags: directors, directors & officers, Business & Legal, Internet

$600,000 Awarded in Blog Libel Case

Posted by Eric Robinson on Thu, Sep 07, 2017

If bloggers and other social media posters need a reminder that they can be held accountable for their online musings, a $600,000 jury verdict against an online poster in Georgia is such an example.

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Tags: Internet, Business & Legal, directors & officers, directors

CASL Private Right of Action Delayed: Enforcement by CRTC Continues

Posted by STP Editorial Team on Tue, Aug 01, 2017

By Ryan J. Black, Janine MacNeil, Sharon E. Groom, Lyndsay A. Wasser, Rohan Hill

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Tags: casl, Canadian, Internet, International, Business & Legal

Supreme Court Nominee’s Record Provides Insight into Views on Internet and Social Media Law

Posted by Michael Lambert on Thu, Mar 23, 2017

Legislatures and lower courts have traditionally been responsible for developing Internet law in the United States, but recently the U.S. Supreme Court has been asserting a more active role in shaping Internet law jurisprudence. In 2015, the Court considered whether a Facebook post constituted a “true threat” in Elonis v United States, and this summer, the Court will determine the constitutionality of a prohibition on former sex offenders using social media in Packingham v. North Carolina. Packingham, like other cases heard by the high court so far this term, will be resolved by eight justices.

This week, the potential ninth justice—Judge Neil Gorsuch—begins confirmation hearings before the U.S. Senate Judiciary Committee. As the Court takes a deeper look at cases concerning Internet and social media law, the seat vacated after the death of Justice Antonin Scalia could be instrumental in determining the future of Internet and social media law.

Gorsuch has the expected pedigree of a Supreme Court nominee: he is an appellate judge on the U.S. Court of Appeals for the Tenth Circuit, a former deputy associate attorney general with the U.S. Department of Justice, a former clerk for Justices Byron White and Anthony Kennedy, and a graduate of Harvard Law School. His views of Internet and social media law, however, are less certain, although his record on the Tenth Circuit bench provides a glimpse into where he may stand on Internet law issues.

In U.S. v. Ackerman, Gorsuch lived up to his reputation as a constitutional originalist, turning to the framers in determining that the Fourth Amendment protects emails from searches. Gorsuch wrote that the “warrantless opening and examination of private correspondence…seems pretty clearly to qualify as exactly the type of trespass to chattels that the framers sought to prevent when they adopted the Fourth Amendment.” Gorsuch added that “a more obvious analogy from principle to new technology is hard to imagine.”

In a second privacy case, U.S. v. Christie, Gorsuch concluded that although a warrant to search a computer for evidence relating to a crime was broad, it satisfied the Fourth Amendment’s particularity requirement.

In Mink v. Knox, a district attorney pursued criminal libel charges against a publisher of an online journal. Gorsuch wrote a concurring opinion, agreeing with the majority that the speech was protected as parody but cautioning the majority on the extent to which parodies may be safeguarded. Gorsuch opined that “the Supreme Court has yet to address how far the First Amendment goes in protecting parody. And reasonable minds can and do differ about the soundness of a rule that precludes private persons from recovering for reputational or emotional damage caused by parody about issues of private concern.”

Gorsuch also wrote a concurring opinion in Direct Marketing Association v. Brohl, upholding a Colorado law requiring online retailers without brick-and-mortar locations in the state to notify consumers of sales tax liability and report the information to the Colorado Department of Revenue.

In the copyright context, Gorsuch authored an opinion in Meshwerks, Inc. v. Toyota Motor Sales USA, Inc., determining that Meshwerks’ digital models of Toyota’s vehicles copying Toyota’s designs were not entitled to copyright protection. “While fully appreciating that digital media present new frontiers for copyrightable creative expression, in this particular case the uncontested facts reveal that Meshwerks’ models owe their designs and origins to Toyota and deliberately do not include anything original of their own; accordingly, we hold that Meshwerks’ models are not protected by copyright and affirm,” Gorsuch wrote.

In Doe v. Shurtleff, a case analogous to Packingham, Gorsuch joined a panel opinion in upholding the constitutionality of a Utah statute requiring convicted sex offenders to register all online usernames.

With the U.S. Supreme Court taking a more engaged role in Internet and social media law, the vote of a 49-year-old Justice Neil Gorsuch, if confirmed, could prove critical in shaping Internet law for years to come.

Specialty Technical Publishers (STP) recently published an entirely new chapter, available as a separate guide, on U.S. Social Media Law in its publication Internet Law: The Complete Guide, and provides a variety of single-law and multi-law services, intended to facilitate clients’ understanding of and compliance with requirements. These include:

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Tags: Internet, Business & Legal

Trade Secret Protection in a Digital World

Posted by STP Editorial Team on Tue, Feb 28, 2017

While the Internet creates great opportunities for commerce and for sharing information around the world, these blessings can be curses to the holders of trade secrets. The Internet poses a challenge for trade secret holders because it is an open network and it provides for immediate and widespread dissemination of information.

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Tags: Internet, Business & Legal