How users may be breaking the law
May 8, 2009 by Valerie HelmbreckPosted in: Communication, Compliance, In this week's e-newsletter, Information security, Latest News & Views, Web sites, cybercrime, e-commerce
Back in the “olden days,” as kids like to call them, the Internet was like a frontier town with no sheriff. But nearly a quarter of a century and billions of users later, laws are being passed to bring law and order to this new territory.
Your users may not know about all of them. Here are a few key pieces of legislation they should be aware of so they keep themselves – and your organization – out of trouble:
• Digital Millennium Copyright Act (DMCA) – A federal law passed during the Clinton Administration, DMCA makes it a criminal offense to try and get around any kind of technological copy protection – even if you don’t violate someone else’s copyright. In short, simply disabling the copy protection is a federal crime. Tell users not to do it, even if they’ve figured out how and it feels irresistible.
• No Electronic Theft (NET) Act – Just making a copy of a copyrighted work for a friend now makes you subject to up to five years in prison and/or up to $250,000 in fines. This means no making copies of downloaded movies or TV shows for friends.
• Unlawful Internet Gambling Enforcement Act of 2006 – criminalizes acceptance of funds from bettors — but it doesn’t apply to the person making the bet. However, some state laws do. For example, a Washington law passed in 2006 makes gambling on the Internet a felony. Check to see what laws your state has on the books about Internet gambling.
The important thing to understand is that if your users break these laws using your organization’s equipment, the liability could extend to the employer as well.
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May 12th, 2009 at 1:49 pm
Another gotcha: “Use” tax
Use tax is assessed in the home state of a recipient of goods and services purchased outside the home state.
http://en.wikipedia.org/wiki/Use_tax
In other words: Sales tax.
You may think that internet purchases are tax-free, but each state assesses “use tax”, typically equal to sales tax on goods and services purchased outside the state. Companies as well as individuals can find themselves at the sharp end of a sales tax audit if aggregate purchases made outside the state (e.g. over the internet) exceed a specified dollar amount.
Each state has different laws regarding sales and use tax, which can make things needlessly complicated.
May 12th, 2009 at 2:22 pm
Impact to businesses:
Businesses could be partially or fully liable for certain activities because they own the asset and pay for the bandwidth, and could be viewed to be “facilitating” illegal activities.
Let’s say that one of your employees is using their company-owned laptop to watch a pirated movie on an airplane, and just happens to be sitting next to an employee of the MPAA, or a member of the law enforcement community. Not only is the employee in trouble, but the laptop, an asset of the company, will probably be seized as evidence as part of the investigation, and if they downloaded the movie at work, if a log of it exists, your company could be slapped with a lawsuit from the copyright holder (or by the MPAA on behalf of).
In a worst-case scenario, if one of your employees is sharing pirated content from work, this could result in the seizure of company assets including personal computers, servers, firewalls, backup tapes, and anything else that could be used as evidence.
In this scenario, depending on the scope of the warrant and subsequent seizure, your company could be out of business for an extended duration, with no way to recover.
The best way to protect your company is with a company-wide acceptable use policy prohibiting (among MANY other things) downloading or sharing of copyrighted material, and requiring each employee to read and sign a copy. This demonstrates that the company itself is not complicit.
September 25th, 2009 at 12:02 am
Your blog is so illuminating … Hold up the pleasant work!!!!