Litigation tops list of concerns for digital content companies doing global business

The globalization of digital content and business is a growing concern for companies that must now consider their compliance with laws in far-off lands, a new study argues. The report, Global Internet Jurisdiction, prepared by a committee of the American Bar Association under the co-chairmanship of University of Ottawa law professor Michael Geist, shows that companies see the risk of litigation as the greatest threat of operating ecom or other businesses across international borders. Industrial and consumer regulations, ecom regulation, taxation and privacy are also top concerns among companies. American companies worry about it the most by a ratio of six to one, and they say that Internet jurisdiction issues are getting worse. Asian and European companies, however, see the situation improving. The study states though that companies aren’t throwing up their hands in response to the challenges of doing electronic business across borders. It shows that media companies have adjusted their business operations in response to Internet jurisdiction risk. North American companies, in particular, are using technological and legal approaches such as the insertion of legal terms on web sites, the use of local servers and national top-level domain names, and posting of local content to mitigate the risk. North American companies - in contrast to their European and Asian counterparts - are using location-based technologies to identify where users are coming from. There is also, notes the report, a trend toward avoiding doing business with higher risk jurisdictions. The survey is drawn from the answers provided by 277 companies who were sent questionnaires by the International Chamber of Commerce and the Internet Law and Policy Forum, with a "broad cross-section of small-, medium- and large-sized businesses engaged within business sectors in every geographic region." The study notes, though, that the results have not been tested for statistical significance. Across the spectrum of companies studied, litigation was usually the most cited as a main concern. Several high-profile international cases - The Yahoo! France case is the most frequently mentioned - have struck a fearsome chord with companies who see potential court actions as a business risk of operating in a global, digital environment. In the information technology sector, for instance, 55% of respondents cited industry regulations as a concern, followed by consumer regulations (52%), taxation and litigation (50% each) and ecommerce regulation (44%). When the financial sector is surveyed, 72% of companies cited different financial regulations across jurisdictions as a concern, followed by consumer regulation (47%), ecom (43%), security (42%), litigation (42%) and privacy rules (38%). In the retail sector, 41% of companies cite consumer regulations as a concern, 35% say privacy rules are a concern, and 29% cite concern over ecom regulations. In the media sector, 59% of companies say consumer regulations are a concern, 59% cite consumer regulations as a concern, followed by ecom (56%), industry regulations (42%), tax rules (35%), litigation (35%) and defamation rules (31%). To deal with the risks of doing business across national boundaries, just 36% of companies overall have made changes. Media companies were the most likely to have done so, according to the survey. For companies taking measures to mitigate litigation risks, the most common approach is to eliminate or reduce business activity in higher risk jurisdictions (12%), or to target lower risk alternatives (12%). Companies avoiding some jurisdictions did so mainly to avoid liability (45%), liability at home for doing business with a jurisdiction either on a prohibited list or for other sanctions or security reasons (37%), or because of user fraud (32%). North Africa, the Middle East and Asia were cited most frequently by companies as jurisdictions with which they avoid doing business.

Litigation tops list of concerns for digital content companies doing global business

Broadcast | April 16, 2004

Unlock all the Canadian telecom, broadcasting and digital media news you need.

FREE TRIAL

SUBSCRIBE

Inside The Wire Report

Information

Hill Times Publishing

Get in Touch With Us