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The trend in e-business
technologies generally heralds cost containment
coupled with improvements in capabilities, ease of
use, increased availability of software, ease of site
development, and improved security and accessibility.
PCs are continuing to be smaller and cheaper,
providing increased technology access to a larger
number of clients in a variety of cultures and
locations. Clustering servers can add processing power
in ways that offer economies of scale, and networks
are becoming more expansive as broadband technologies
(such as XDSL) dramatically increase bandwidth. The
future evolution and integration of the computer, the
TV, and the telephone including cellular telephones
will increase accessibility to the Internet, and
therefore accessibility to e-business.
Improved
technology will also contribute to advances in
transactional and service efficiency. In one example,
Cisco reported 70% of support calls were resolved by a
visit to the Cisco site, US$86 million saved with
electronic downloads, and US$107 million saved with
online configuration and documentation, and customer
satisfaction was 25% higher. Further on the e-business
side, 90% of orders were placed online with a less
than 1% error rate.1
Further,
new developments and technology aspire to create a
more real and multidimensional experience for the
customer. Lands’ End and a growing number of
businesses are experimenting with the rapidly emerging
field of 3D Web technology. As David Holland of G.
Wagen, a Web site development company providing
services for Mercedes-Benz, comments, “Ultimately,
we will have a virtual showroom that will allow people
to view different colours and options, walk around,
see what the vehicle’s inside looks like—even
test-drive an offroad course.” Getting technology
sufficiently advanced to support virtual reality is
the continuing challenge.
With
advancements in technology come requirements for new
business strategies and models, coupled with new
legislation and legalities. Caution in protecting
intellectual property is critical. According to
Euromoney,2 dot-coms are notorious for not
protecting their only source of value—intangible
assets. In fact, in a survey of 400 managers in
European dot-coms (split between the United Kingdom,
France, Germany, and the Netherlands), there was
little interest in the threat that legal risk posed to
their survival—and a full 20% of dot-coms surveyed
were not worried about any legal risk. Moreover, a
large number of dot-coms fail to protect trademarks
and patents. In an unforgiving marketplace, lack of
attention to legal risk management can severely
undermine the development of trust-based customer
relationships, especially when security is of concern.
International
legal risk is a continuing and serious challenge for
both larger and smaller e-business companies. The Net
has spawned a multijurisdictional legal minefield,
with ebusiness regulation a priority around the world.
With the advent of electronic agents and
click/shrink/Web wrap contracts, basic legal
principles on the formation of contracts and their
enforceability are currently being reexamined in the
EU, the United States, and other countries with
significant e-business activity. Competition law or
the abolition of barriers to trade between countries
will also have an enormous impact on products such as
sound recordings, movies, and software.3
One
recent technology development with legal implications
includes fingerprinting software. The latest version
of Napster’s file exchange software includes
technology that can be used to identify
characteristics of sound. According to Associated
Press, in a posting on Napster’s Web site, “the
company said sound fingerprinting will be used to
comply with a federal judge’s order to block the
free exchange of copyright songs. … As the
technology available for the identification and
tracking of music files has evolved extremely rapidly
over the past few months, Napster has quickly embraced
it in order to better protect copyright holders and
improve our users’ experience.”4
Presumably companies like Napster are pushing the
envelope not only for new technologies, but also for
new business models that respond to a world of music
on the Web.
Technology
is also leading the way for legally binding
e-documents. However, it is expected to be a year or
two before a digital signature in an electronic
document replaces an ink signature on paper. The
e-signature is turning out to be costly and difficult,
with legal, technical, and psychological obstacles.
According to Douglas Graham of KPMG, the biggest
difficulty in adopting digitally signed e-documents is
the confusing patchwork of laws and regulations and
the absence of a global commercial code.5
NOTES
1. J. Hoffman, “E-doing it right,” Oil and Gas
Investor, 21(2001)(3): 85–87.
2. N. Page, “Dot coms don’t appreciate legal risk,”
Euromoney, 383(2001)(24): 24–25.
3. The authors would like to thank Tony Fogarassy,
legal counsel at TechBC, for his contributions about
contracts and competition law.
4. “Napster has fingerprinting software,”
Associated Press, May 7, 2001.
5. C. Wilde, “Legally binding E-documents move
closer to reality,” Informationweek, 776(2001).
Part 1: Technology
Issues
Part 2: Legal
Issues |