E-Commerce Law Week, Issue 478

Facebook Friends Cuomo, But Other AGs Feel Flamed

Facebook has reached a settlement with New York Attorney General Andrew Cuomo, ending his office's investigation into whether the social networking website's safety controls and responses to complaints live up to the company's representations. According to a press release from Cuomo's office, Facebook agreed to appoint an Independent Safety and Security Examiner, respond to complaints about inappropriate material within 24 hours, and revise its representations regarding user safety. Attorney general investigations are still pending, though, in New Jersey, Connecticut and North Carolina, Ohio, and Mississippi, and a national task force on social networking comprising the 50 state attorneys general continues to assess Facebook's protections for young users. Along with Facebook's promises to change its ways, these investigations suggest that sites that provide a forum for user-created content will increasingly be held responsible for ensuring the safety of their users. The investigations, though, didn't stop Microsoft from agreeing yesterday to pay $240 million for a 1.6% stake in Facebook (valuing the company at $15 billion).

House Democrats Propose FISA Amendments, but President Threatens Veto

Earlier this month, the House Judiciary Committee approved an amendment to the Foreign Intelligence Surveillance Act (FISA) that would allow the Foreign Intelligence Surveillance Court (FISC) to issue broad, "programmatic" surveillance orders as long as the government certified that the "targets" of the surveillance were reasonably believed to be abroad and not U.S. persons, even if the surveillance was conducted inside the United States and might result in the collection of U.S. persons' communications. The bill -- the "Responsible Electronic Surveillance That is Overseen, Reviewed, and Effective Act of 2007" (RESTORE Act) -- would supersede the temporary amendments to FISA passed in August, which permit similarly broad surveillance but without any FISA order at all. Orders issued under the RESTORE Act would simply name the foreign power (a country or international terrorist group) to be surveilled, but would not need to identify the specific person or facility at which surveillance would be directed. The RESTORE Act would provide for close oversight of the implementation of such orders by the FISC, the Justice Department Inspector General, and Congress. Notably, while providing immunity for "any person" that assists the government going forward, the RESTORE Act would not provide retroactive immunity to telecoms that assisted the government's warrantless surveillance program after September 11, 2001. The House took up the bill last week, but pulled the bill from the floor before a final vote was taken.

How Private Is Web-Based Email Sent or Received from Work?

Employer monitoring of workplace email can pose legal challenges, especially in jurisdictions like Canada and the EU that have stringent privacy laws. Things are usually easier stateside, where informing employees that their email may be monitored is usually sufficient to extinguish employees' expectation of privacy in their emails. But, as a recent ruling in a civil rights case demonstrates, there can be significant exceptions to this rule -- including for emails using web-based email systems and for emails protected by marital or attorney-client privilege.

Circuit Courts To Reconsider Controversial Rulings On Email Access and Website Immunity

The Sixth and Ninth Circuits have agreed to rehear en banc their earlier decisions in Warshak v. United States and Fair Housing Council of San Fernando Valley v. Roommates.com, LLC, respectively, on both of which we previously reported. The Sixth Circuit's June ruling in Warshak held unconstitutional the sections of the Stored Communications Act that permit a court to order the disclosure to the government of the contents of stored emails without a warrant based on probable cause or prior notice to the subscriber. The Ninth Circuit's May ruling in Roommates.com held that a website that "categoriz[es], channel[s] and limit[s] the distribution" of user-supplied data thereby "provides an additional layer of information," for which it cannot claim immunity under Section 230(c)(1) of the Communications Decency Act. These two rulings have been vacated pending en banc review. Given the important issues at stake in these cases -- government access to the content of emails, and website liability for third-party content -- email providers and website operators may want to consider filing amicus briefs. Oral argument in Warshak is scheduled for Wednesday, December 5, with any amicus briefs due November 15. Oral argument in Roommates is scheduled for December 12; amicus briefs supporting the petitioner or not supporting either party are due November 2 and amicus briefs supporting the respondent are due November 16.

New Law Means Significantly Higher Fines For Tech Trading Snafus

On October 16, President Bush signed the International Emergency Economic Powers Enhancement Act (IEEPA Enhancement Act), which amends the IEEPA to significantly increase the civil and criminal penalties available for violations of various U.S. export and sanctions rules. In addition to higher fines for violations of nearly all of the economic sanctions programs administered by the Treasury Department’s Office of Foreign Assets Control (OFAC), the IEEPA Enhancement Act also increases liability for breaching the anti-boycott and export control rules in the Export Administration Regulations (EAR), established by the Commerce Department’s Bureau of Industry and Security (BIS). The new penalties could have a significant impact on international trade in high-tech items, since the EAR controls the export of many types of sensitive computer software and hardware, including those that use encryption. Because fines for violations of the EAR could now reach into the millions of dollars, all companies that regularly move restricted technologies across the U.S. border should consider redoubling their efforts to ensure EAR compliance.

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