E-Commerce Law Week, Issue 424

French Internet Gambling Arrests Raise Conflict of Laws Issues

The United States is not the only country cracking down on Internet gambling -- or raising conflicts of law questions in the process. On September 15, Austrian-owned bwin.com announced that French police had arrested two of its CEOs "for the alleged violation of French gaming law." bwin's website, which offers sports book, poker, and casino game products to European bettors, ran afoul of a French law that grants two government controlled firms a monopoly on gambling services. The bwin arrests have turned the spotlight on an apparent rift between European Union law and that of many member states. While several EU countries prohibit privately owned gambling operations, online gambling houses have defended their operations by pointing to the Treaty Establishing the European Community, which guarantees "freedom of establishment" (Article 44) and prohibits "restrictions on freedom to provide services within the Community" (Article 49). This conflict of laws issue is not new to the EU -- in April of this year, the European Commission issued a statement "inquir[ing] into restrictions on sports betting services in Denmark, Finland, Germany, Hungary, Italy, the Netherlands and Sweden." But the recent actions against bwin could push both lawmakers and the courts to redouble their efforts to resolve the conflict.

Federal Identity Theft Task Force Issues Interim Recommendations

Data security breaches and the resulting risk of identity theft continue to plague both the private and public sectors. Last last month, the Commerce Department revealed that it has lost over 1,100 laptops since 2001. And on September 26 General Electric announced that a company laptop containing the names and Social Security numbers of 50,000 current and former employees was stolen from a hotel room. In an effort to address the problem, the federal government in May created an Identity Theft Task Force, chaired by the Attorney General and the Chairman of the Federal Trade Commission and comprising 17 federal departments and agencies. On September 19, the Task Force released its Interim Recommendations, which are intended to help "bring identity thieves to justice," "mitigate the risks of identity theft," and "assist identity-theft victims in [their recovery]." Although addressed primarily to government agencies, some of the recommendations for improving data security and handling data breaches -- including guidelines for when an agency should provide credit monitoring services to affected individuals -- could offer useful guidance to private companies. And in a section specifically directed at the business world, the report recommends that companies consider alternatives to the use of SSNs for verification purposes, and calls for public-private workshops to develop and promote improved means of authentication.

Ich Bin Ein Filesharer?

Speaking in Berlin in 1963 shortly after the construction of the Berlin wall, John F. Kennedy asserted "Ich bin ein Berliner" ("I am a Berliner," though some insist it really means "I am a jelly doughnut"). President Kennedy was emphasizing his solidarity with the people of West Berlin. A rather less desirable solidarity -- between Germans who make available unsecured wireless Internet and filesharers who use their networks -- was identified  in a September decision by the Hamburg Regional Court. The decision sets a potentially significant precedent regarding the liability implications of failure to take appropriate security measures on a computer network. It indicates that the increasing numbers of consumers and businesses who use wireless networks (or at least those in Germany) should take care to implement appropriate security. More generally, the implication of the decision of the Hamburg Regional Court is that other types of security breaches (e.g., failure to implement patches, leading one's computer to become a "bot") could also give rise to liability. It's too early to say for sure, but it looks like this may be the direction that the law is heading more globally.

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