April 2012
New technological, market and legal trends and their impact on the IT/C industry
It is universally accepted that technological progress is faster than market adoption, and regulation generally lags far behind the two. Oftentimes, it is not until the market is disrupted by different uses of new technologies that legal issues start to be addressed. A good example of how these developments impact the way we communicate, interact with each other and access content is touch computing. Touch-based portable devices are tools that provide quick and ubiquitous access to content and services. Hardware matters but the availability of content and services are critical - voice, e-mail, instant messaging, movies, e-books, phone service, music, TV shows and games are on hand. Touch devices are gateways for individual users to access a universe of services to serve their every need. Another interesting example is "social media". Recent technological developments enable social networking platforms to provide the means for interactive content creation, communication, gaming, collaboration and exchange among users where they can share ideas, activities, events and interests. Devices and platforms serve as distribution points for content and services among users and enterprises are applying social technologies such as content management, communication and collaboration to their businesses. However, the list of legal issues arising from these technological developments is also long. How do laws and regulations address these changes? How are courts responding to the different and novel claims by parties? Not surprisingly, the responses to these legal issues have been varied depending on the industry or jurisdiction where the company does business.
The interaction between companies operating online and their users is usually followed by flows of personal data. The processing activities are usually governed by data privacy laws. The regulations of some jurisdictions require that consent be provided by data owners before their personal data is processed. Although companies usually obtain consent, this is normally obtained through electronic means, which raises certain legal issues related to the enforceability of contracts executed or consents granted electronically. In addition, a minor's capacity to execute contracts and provide consent is always a legal issue when in comes to online activities. The key issue is whether the agreements entered or consented to are valid and enforceable. So far, most jurisdictions do not have clear rules in this regard. It may be alleged that minors are sophisticated in matters related to the internet and social networks, and therefore these contracts or agreements are comparable to what is known as a "daily contract", for which minors would have full capacity in most jurisdictions. On the other hand, others would argue that although minors may be sophisticated as regards online activities, they still do not have a complete understanding of the consequences of providing personal information online and the manner in which such information could be used by companies.
In addition, security breaches continue to be a growing global challenge. Due to the high volume and traffic of digitally stored data, security breaches have an increasingly negative impact on exposed businesses and individuals. Regulators are increasing their controls and requesting more strict reporting obligations. Likewise, communications, opinions and statements made on social networks are testing the liability standards that social media sites have for their users' posts and comments.
The area of online gaming further evidences the lack of clear regulations for online activities. In fact, most regulations refer to the traditional non-virtual types of gaming and require local or state authorisation for gaming within their territorial boundaries. As online gaming operators do not actually perform activities in those territories and their sites are operated from different jurisdictions, companies could find themselves being held liable for running an illegal gambling business.
The legal conflicts will grow as technologies continue to enhance as well as disrupt markets. The challenge seems to be, despite the complexity of the issues involved, to draw some sense of direction regarding the most relevant issues that affect businesses and individuals.
Guillermo Cervio and
Roberto Grane Baker & McKenzie, Buenos Aires
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