Repercussions for Online False Advertising

Recently issued Federal Trade Commission guidelines could impose liability on employers for false or misleading advertising stemming from employees' online postings. These guidelines would stick even when the employer didn't authorize the employee to make the misleading statements. Because blogging has become such an effective tool for companies to sell their products and services, the FTC thought it was fitting to pass the standard. Consumers are being shown to trust blog testimonials more so than other forms of traditional advertising.

Even though the guidelines are administrative interpretations of the law and not binding, advertisers could face FTC enforcement actions. If consumers are injured, the employer could face class-action lawsuits as well. However, the FTC has said it would be unlikely to taken action against a company for the actions of one employee unless bad faith conduct was involved.

The best way to avoid sanctions for businesses under this new rule would be to impose strong social media policies. More and more companies (and law firms) are becoming aware of the detrimental effects of social networking and creating these work policies. In the end, the Federal Trade Commission is looking for intent and deception. Some employers do use blogs to advertise their product and could potentially exaggerate because it isn't the company website. These guidelines look to remedy that.

For more information, visit: Business Law Today.

Businesses and Videoconferencing

One of the larger growing technologies that businesses are relying on is videoconferencing. Because traveling is expensive and time-consuming, a video-chatting with clients is sometimes preferable. It allows for face-time discussion that phone calls and emails can't replicate; despite occasional technical pitfalls, clients might favor the video conference.

The article I read from took two different accounts of the trend; one person used video conferencing often and the other didn't.

Not only allowing for face-to-face time, videoconferencing can help to save money, break into international markets, and as a way to compete with larger businesses. Because there's a greater feeling of connection with other branches of the business, it allows for expansion.

The main failing seemed to be technical difficulty. Emails and phone calls always work, but taking the time to set-up a video conference could be lengthy. These technical problems could manifest in fuzzy audio quality, bad connections, and the need to reboot.

Similar trends exist in web-based conferencing, such as GoToMeeting, and sharing websites, like Google Docs. As reliance on these kinds of services grow, businesses will find it easier to expand and pull clients from other areas than out of their immediate surrounding region.

The article is located at: http://www.entrepreneur.com/article/217438.

Small Businesses and Data Protection

According to a recent survey about IT issues, small businesses were most concerned about viruses, trojans, and data leaks. The study was conducted by Trend Micro and consisted of input from 1,600 corporate users in the U.S., U.K., Germany, and Japan. Small businesses were least concerned about phishing scams and spam.

The survey stated that small businesses were less likely than big businesses to have policies in place to stop cyber-theft, however. 21 percent of small business employees feel that their IT department could do a better job of protecting their business from data-stealing malware, and 35 percent of these employees felt they could be better informed about the same malware.

As technology improves, it will become easier to steal information and data from these businesses. Without the appropriate blocks in place, this will evolve into a larger and larger issue for small organizations.

Statistics and survey information taken from: Business News Daily.

Net Neutrality

Net neutrality is the concept of preserving the system we have in place now: we pay a certain fee and obtain access, which is mostly unrestricted, to the internet. This principle is under question because of growing cell phone usage. Some internet providers want to discriminate between users and allow some traffic a higher priority than others.

In April, the DC Circuit Court of Appeals stated that the FCC didn't provide enough convincing evidence for its authority to enforce net neutrality. Several Congress members have tried to sponsor bills in favor of net neutrality as well, but none have succeeded. The FCC has also attempted to conduct meetings with big internet service providers in the interests of working out a solution, but the talks failed to reach a compromise.

Ultimately, this could affect online business and innovation as the internet would become more like cable television. Businesses would have to purchase agreements with internet providers to ensure that their content is easily downloadable. Smaller, growing websites could have issues with development since this policy would favor already established sites. Because it is an issue that has only surfaced recently, this is a new area of First Amendment rights that has yet to be decided upon.

For more information, visit: http://business2press.com/2010/09/16/how-internet-neutrality-affects-online-innovation-and-business/

Privacy Protection

A new survey conducted by Anonymizer suggests that individuals may not know how to protect their privacy online. Most respondents were nervous about identity theft, privacy, and computer viruses. 36 percent of respondents believed their identity was secure online. However, less (28 percent) believed their identity was secure on a mobile device.

Advertising played a role in the survey as well. 85 percent were aware they were being profiled by advertisers; 85 percent were aware that cybercriminals were tracking them without their knowledge. The biggest part, according to the article, is that a majority of respondents thought that a firewall would protect their privacy or anti-virus software would protect their identity. The best course to take is a healthy dose of skepticism, however. User education can prevent social engineering and phishing scams.

I thought that this article was applicable even though it references a survey of individuals. Many small businesses must be in similar states of understanding when it comes to online privacy. Information can be easily accessed online with the right situation, and I think that this survey helps to put that in perspective. Being aware of how data moves on the internet can be beneficial to any company.

The article is located at: PC World.

Weak Passwords

Despite predictions that the use of passwords will become less common and will be replaced by other methods of authentication such as fingerprint scanners, usernames and corresponding passwords are still prevalent. Many people rely on weak passwords to protect their information online, which is concerning, if not exactly shocking.

A recent study by Webroot delved into these poor password practices. The survey found that: 4 out of 10 respondents had shared passwords with at least one person in the last year, the same amount used the same password on multiple websites, half of all respondents didn't use special characters to encrypt their passwords, and 2 of 10 have used public information (such as dates and pet names) as their password.

The survey always outlined that people thought their passwords were more secure than they actually were and believed they were well protected. The article went on to cover some good tips to make passwords. Mainly, you should not make passwords that are easy to guess; avoid personal information and standard words. Definitely don't use the same password for multiple sites.

Because sensitive information can be found online, businesses have to be careful about passwords as well. If you look at a law firm, think of all of the wrong that could be done if an employee's work email was hacked into. All together, I thought that this email had some decent tips on how to deal with the issue.

For more information, visit: PC World.

National E-Discovery Trends

Because e-discovery is still such a fresh issue, recent court decisions have impacted how attorneys are dealing with it. The shift has resulted in broader guidelines in the Federal Rules of Evidence over the last few years, in addition to landmark cases. Some of the more current decisions stem from the Delaware Court of Chancery, which is one of the nation's most prominent business litigation courts.

These Delaware decisions stress attorney responsibility. Electronic discovery most often relates to e-mails and the process of ensuring that their corresponding data is not deleted. The Court emphasized that counsel must take appropriate measures to guarantee that clients do not destroy data. In addition, it stated that attorneys must be certain to conduct proper searches to collect e-discovery. Clients cannot be allowed to search their own e-mail systems, for example.

One of the biggest decisions concerning electronic data came from a ruling in California. The case (Qualcomm v. Broadcom) was a patent trial that resulted in allegations of discovery misconduct after Qualcomm lost. Initially, Qualcomm's counsel was reprimanded for not properly searching for documents, accepting a client's assurances that the search was sufficient, and ignoring warning signs that the search was inadequate. During additional litigation, it was found that the attorneys did not act in bad faith and initial sanctions were lifted. Despite this, the case served as a cautionary tale to firms to take courts seriously on the issue.

For more information, see the article at the ABA's business law newsletter.

Social Networking

Social networking businesses have unique challenges to face when protecting themselves from liability. For example, they need to create terms of use for their service, protect intellectual property, and maximize statutory immunities.

End-User License Agreements (EULA or Terms of Use) are a concept we've all grown familiar with. Courts have ruled that users can be found legally culpable for infringing upon these contracts. On the opposite hand, however, if the contract is too demanding or one-sided, courts can refuse to enforce it. Creating these types of agreements is a tricky balance as a result.

Copyright violations have also affected social networks in the past. Before the Digital Millennium Copyright Act in 1998, service providers could be held to criminal sanctions and civil liability for hosting an infringing work. Now, social networks are protected if: there isn't knowledge of the work being infringing, lack of financial benefit, and expeditious removal of the content once it has been discovered.

The internet is always creating new legal issues, especially so in the realms of contracts and intellectual property. It's good sense for businesses to be aware of these problems.

For more information visit: Business Law Today.

Online Databases and Legal Documents

If you've never heard of public.resource.org, it might be something to keep an eye on.

Carl Malamud's idea for the website is to pressure government officials to post online legal rulings, building codes and other legal documents in an accessible format. It's a nonprofit group that attempts to remedy the fact that online legal databases are inconsistent, difficult to search, and oftentimes expensive.

Malamud is a recent recipient of a $2 million Google grant for this idea. On Friday, Google awarded $10 million to five organizations for "ideas to change the world."

This isn't the first time that Malamud has been noticed. In 1994, he pushed the SEC to post corporate filings online; in 2008, he helped Oregon to stop claiming copyright over its laws. He's now doing the same with California's copyrights over the California Code. Malamud has also gained renown for asking lawyers to donate their purchased PACER documents and then bundling them into free ZIP files hosted on his website. In addition to other court decisions, these files completely cover decisions from federal appeals courts made over the last 50 years.

According to the law.gov portion of his website, he wants to publish primary legal materials so that they're readily available to the public to encourage understanding, research, and innovation in the legal information market.

This seems like an excellent idea to me. Online databases of court rulings, filings, and statutes could help to make the law more easily available. What's currently posted online varies by municipality in every state. Without using expensive sources like Lexis, online databases are usually pretty inconsistent and clunky.

For more information on Malamud and the Google grant, see PressDemocrat and Wired.com.