Internet Law Predictions for 2013

The Internet seems to be forever evolving. As we close out 2012, the lack of a Mayan doomsday suggests it is time to look forward to 2013 and make a few predictions.

FTC vs. Mobile App Developers

The Federal Trade Commission polices the Internet for the federal government. The Agency doesn’t have the resources to do this effectively, so it focuses on areas where there are significant complaints.

The FTC appears to be preparing to make 2013 the year to go after mobile app developers. The specific focus will be on privacy issues with particular emphasis placed on gathering data from children. In December 2012, the FTC issued new regulations for the application of the Children’s Online Privacy Protection Act of 1998 to the digital world and added an entire new section regarding mobile app developers. Mobile app developers should recognize this as a declaration of war and prepare to defend themselves by getting into compliance with the law.

Federal Sales Tax

2013 is starting off with the country staring over the fiscal cliff. It appears for all the world the politicians will let us go over it, but sooner or later they will come up with a deal. When they do, the issue of raising “revenues” will become paramount. Part and parcel to this will be a revision of the tax code.

With Amazon.com giving up the state sales tax fight, there is no significant online party positioned to fight a federal sales tax on purchases made on the web. Given the dire financial situation facing the federal government, a sales tax of say 2 percent on all internet purchases just might occur. 2 percent isn’t too bad. The problem, of course, is the government will only raise the rate in the future as e-commerce continues to become a dominant force in the economy.

DMCA Abuse Issues

The is significant criticism of the Digital Millennium Copyright Act, but it is actually a great law for website owners. Why? When applied correctly, the law creates immunity for websites from liability arising from the actions of their users. It doesn’t get much better than blanket immunity in the legal arena.

This doesn’t mean the “DMCA” is perfect. It clearly is not. One area where there are problems is with copyright holders abusing the system by filing nonsense complaints designed to deter or eliminate criticism or competition. This abuse has always existed, but it started to get really out of control at the end of 2012. If the trend continues into 2013, we can expect to see politicians pressured to revisit the law and create some form of penalty for such abuses. I happen to be in favor of such a penalty.

Return of Poker

Online poker was outlawed through a slight of hand in Congress. A rider was attached to the Safe Harbor Act [a terrorism law] prohibiting banks from processing financial transactions involving poker sites. In the land of the free, this made playing poker online for money illegal notwithstanding the fact one could still do so in Las Vegas or at various Indian casinos across the land.

Simply put, we are talking about an ill-advised law. There were rumblings about correcting this wrong during the first Obama term. While not a priority, most people expect the President to revisit the issue and sign off on the legalization of online poker and funding it should a bill reach his desk. While this might happen in 2013, it is probably more likely to occur in 2014 or 2015.

Website Terms of Use Debate

The great debate over whether website terms of use are binding on users will continue into 2013. The primary issue has to do with sites where a user is not required to join. Courts are starting to require that websites must obtain an affirmative indication of acceptance from a user indicating the user has read and accepted the terms of use before the court will find the terms binding. Checking a box is considered such an action.

This new requirement creates a problem for sites where the user isn’t required to sign up for an account, such as on a blog. How can such sites acquire the affirmative indication from users of acceptance of the terms? Visitors can view the entire site without needing to check a box. There is no optimal solution at this time. The hope is courts will provide on this year.

As with all predictions, these should be taken with a grain of salt. While each of the topics above will be an issue in 2013, we are likely to see a crop of unexpected hot button subjects pop up as well. One never knows when a site such as Instagram is going to do something stupid and cause an uproar.

Richard A. Chapo, Esq.

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