By Cliff Ennico
Each year around this time I write an update for Advising eBusinesses, my one-volume handbook on Internet law designed for lawyers who represent online businesses. As part of this update, I list what I consider to be the ten most significant developments in Internet law over the past year. Here are this year’s selections:
Internet retail. In 2013, the U.S. Senate passed the Marketplace Fairness Act of 2013 (“MIFA”), a bill that would require Internet retailers to pay sales tax in the jurisdictions where their buyers were located, subject to a number of conditions. MIFA has languished in the U.S. House of Representatives, largely as the result of an intensive lobbying campaign by small business organizations, and has not as yet been passed into law.
Fast forward to June 2014: The U.S. House of Representatives by voice vote passed the Permanent Internet Tax Freedom Act (PITFA), a bill which would make permanent a ban on state and local taxation of Internet access and on multiple or discriminatory taxes on electronic commerce. PITFA was sent on for approval by the U.S. Senate, which two weeks later introduced a bill, called the “Marketplace and Internet Tax Freedom Act” (MITFA), which essentially conditioned the Senate’s approval of PITFA on the House’s approval of MIFA.
So the House of Representatives must choose between two evils: Allowing states to tax Internet commerce, or allowing them to tax Internet access. The House has not yet responded to MITFA, and it is unlikely action will be taken until after the November 2014 Congressional elections.
Europe’s “Right to Be Forgotten” and the Google case. In 1995, the European Union adopted a comprehensive Directive on Data Protection creating extremely stringent privacy protections for EU residents. In May 2014 the European Court of Justice interpreted the Directive as creating a “right to be forgotten” for EU residents. The test case against Google Spain was brought by a Spanish man, Mario Costeja Gonzalez, who wanted Google to delete an auction notice of his repossessed home dating from 1998. Gonzalez argued that the matter, in which his house had been auctioned to pay off his social security debts, was after 15 years no longer relevant to his credit history, and accordingly should no longer be available for public view whenever his name was searched on Google
The court, siding with Gonzalez, ruled that the EU Directive established a “right to be forgotten,” and that Google’s inclusion in search results of links relating to an individual who wanted them removed “on the grounds that he wishes the information appearing on those pages relating to him personally to be ‘forgotten’ after a certain time” was incompatible with the Directive. Google has indicated it will comply with the court’s ruling, at least in Europe.
So far, courts in the United States have not gone as far as the European Court of Justice in requiring search engines to delete information upon a user’s demand. First, the First Amendment to the U.S. Constitution generally bars the “scrubbing” of search results that are accurate, while Section 230 of the federal Communications Decency Act of 1996 blocks any effort to require search engines to scrub third party results.
California’s “Online Eraser” Statute. California adopted an “online eraser” law enabling children under 18 to wipe away some of their past online activity. Under the law, websites and smartphone apps “directed” to minors, or that have actual knowledge that a user is a minor, must allow registered users under 18 to remove (or ask the provider to remove or make anonymous) publicly posted content and make certain disclosures to these users. A website or app is “directed” to minors when it is “created for the purpose of reaching an audience that is predominantly comprised of minors, and is not intended for a more general audience comprised of adults.” Unlike the federal Child Online Privacy Protection Act (COPPA), which applies only to pre-teens (age 12 and under), the California statute applies to all teenagers up to the age of 18 and, while broadening COPPA’s protections, does not offer much guidance for website owners and developers.
Facebook “Likes” As Protected Speech. In Bland v. Roberts, several employees of a Sheriff’s department in Virginia claimed they were fired from their jobs for supporting the Sheriff’s opponent for re-election. Two of the plaintiffs had “liked” the Facebook page of the Sheriff’s opponent, while one of them had posted a comment to the opponent’s Facebook page. When the Sheriff won re-election, he fired all of the plaintiffs.
The court ruled that liking someone’s Facebook page is “speech” and therefore is protected by the First Amendment, especially where it is political in nature. The court explained that a Facebook “like” in a political campaign is the Internet equivalent of displaying a political sign in one’s front yard, which the Supreme Court has found to be protected speech.
Continued next week . . .
Cliff Ennico (www.succeedinginyourbusiness.com), a leading expert on small business law and taxes, is the author of “Small Business Survival Guide,” “The eBay Seller’s Tax and Legal Answer Book” and 15 other books.