The Voice of the eCommerce Industry

Age Verification a Favorite in State Legislatures

There's a good opinion piece on age verification and social networking websites by CDT's Leslie Harris on the ABC news site.

Third, can we verify age or identity and still protect privacy? Would personal information about minors have to be submitted and maintained in large databases, or would Internet users have to have an authenticated identification card to go online?

CDT is on the Berkman Center task force setup by the MySpace & Attorneys General joint statement to study online authentication techniques. Intelligent study of the issue is much needed, as age verification is a hot topic in the states.

So far this year we've seen age verification bills introduced in Georgia, Illinois, Iowa, and Mississippi (last year also saw Connecticut and North Carolina). These bills would force the sites to age verify its users and obtain parental consent before kids under 18 could register.  I'm happy to say that Mississippi's bill failed to make crossover and is dead, and Georgia's bill is effectively dead.

Age verification is looked upon as a way to keep our kids safer online, but it's really an access control device that by itself does nothing to limit opportunities for sexual predators. Politicians should avoid age verification mandates, particularly as we have a panel of experts to study the issue over the next year!

-Braden

News from around the Web...

In the case against WikiLeaks.org, news that the judge who signed the order to take down the site and lock the domain to prevent transfer of the domain name to a different domain registrar is now reconsidering his actions after pressure from privacy and civil rights advocates.

Top brands face up to 10,000 “brandjacking” incidents a week from cybersquatters who are trying to pass off fake sites as genuine, according to new reports.

An op-ed in Forbes takes on the challenges of Internet sovereignty.  Online businesses have traditionally taken the position that they would be subject to onerous burdens if they had to comply with the laws of every jurisdiction.  Yet, there are now legal precedents established that companies must obey local laws despite the unwritten law of Internet freedom.

MySpace’s agreement last month with 49 state attorneys general to make social networking sites safer created an investigative task force to forestall pre-emptive legal or legislative solutions on the issue.  A member of the task force cautions the task force to acknowledge that the scope of its investigation must not begin and end with a search for a workable age verification technology. The legal and policy issues raised by age verification must be considered as well.  The task force will release quarterly updates and make recommendations by the end of the year.

The business industry weighed in yesterday at an NTIA meeting on the agency's mid-term review of its joint project agreement (JPA) with ICANN.  NetChoice Coalition Executive Director Steve DelBianco said a "false sense of security" marks the mid-term review, which is like the first half of a school semester.  ICANN's fast-track development of internationalized domain names contrasts with the world's view of the project as an "abject failure," and the Internet Governance Forum is "waiting for a failure" at ICANN to strengthen its hand in moving Internet governance to the UN, he said, reported by Washington Internet Daily.

Gone Phishing?

For those engaged in this past time, they may want to think again.  A bi-partisan bill was introduced this week aimed at ending the practice known as phishing.  The Anti-Phishing Consumer Protection Act of 2008 would prohibit this deceptive solicitation of a consumer’s personal information through the use of emails, instant messages, and misleading websites that trick recipients into divulging their information for the purpose of identity theft. 

We believe this is a step in the right direction.  Phishing and on-line fraud has a detrimental effect on consumers’ trust and confidence and can eventually erode their desire to conduct e-commerce. These scams have increased dramatically with more than 3.5 million Americans (a 57% increase from last year) falling victim to phishing schemes and online identity theft throughout the past year. This came at a significant cost of $3.2 billion dollars.

This new legislation targets phishing attempts and the use of fraudulent or misleading domain names, by defining them as deceptive practices under the Federal Trade Commission (FTC) Act.

It also seeks to solidify the integrity of domain name registration by making it illegal for a domain name registrant to provide false or misleading identifying contact information to the WHOIS database.  Ensuring that the database is accurate and accessible is a goal for the e-commerce industry.

We commend Senators Ted Stevens (R-AK), Olympia Snowe (R-ME) and Bill Nelson (D-FL) for understanding the complexity and importance of this issue and introducing this legislation.

In case you missed it....

Network Solutions is being sued for its controversial practice of holding a domain name in reserve if someone checks for its availability but does not buy it right away, which makes it difficult for interested parties to shop around for better prices. The lawsuit calls for an end to the practice.

Kentucky’s Attorney General outlined legislation that to help keep families safe by strengthening laws prohibiting internet child predators.  The legislation prohibits registered sex offenders from using social-networking websites that are frequented by minors and will allow Kentucky prosecutors to criminally charge sex offenders removed from the sites.

TOP STORIES

The landrush for the .asia domain name suffix has begun.  Companies have been able to reserve domains to match their trademarks, called a sunrise period, since October. Now the process is open for anyone to register and the first .asia domains will go live on the internet in March. Other regional suffixes for Africa and Latin Americaare expected to follow.

Europe makes a move towards Internet censorship over the use of Internet filtering.  Privacy advocates and carriers are going head to head with authorities.  The EU called last September for ISPs to block access to Web sites hosting information about bomb-making, and the UK said in January that she wanted action taken against sites that encouraged terrorism, including social networking sites.

ICANN found no evidence of front running, a form of deceptive domain name acquisition, following an investigation of 120 supposed examples of the cheating.

Top Stories

Massachusetts Attorney General announced plans to launch a new, high-tech computer forensics lab to fight cybercrime and train law enforcement to handle electronic evidence without additional funding. In October, the AG unveiled a 12-page plan to tackle cybercrime.

Wikileaks.org was shut down by a federal judge ruling in San Francisco on Monday for posting several hundred internal documents from a Swiss Bank.  The domain name registrar, Dynadot received a permanent injunction to disable the domain to prevent transfer of wikileaks.org to a different domain registrar. The ruling may present a test of First Amendment rights in the Internet era.

News from NY, news from ICANN

The New York state Senate passed legislation Tuesday intended to protect teenagers who use social-networking sites from online predators.  AG Cuomo's proposal would ban thousands of the state’s sex offenders from communicating with minors online.

New York’s Attorney General wants to require online companies to collect sales taxes from shoppers in New York, whether the companies are in New York or not. 

The Anti-Phishing Working Group (APWG), a consortium of cybersecurity firms and Web businesses, is pushing a new initiative to streamline the process of permanently deleting fraud sites from the Internet. APWG is crafting a system that would accredit security organizations to act as the Web's watchdogs, identifying phishing sites. The flagged sites are then pulled from registries and so banished from the Internet.  The plan is drawing controversy. Critics say that shortening the time it takes to pull the plug on a site could lead to innocent victims.

Online dating sites, and the big business of domain tasting

Last month, New Jersey became the first state to enact a law requiring online dating sties to disclose whether they perform background checks. True.com already performs criminal background checks of would-be daters and hopes other sites will follow their lead.  Critics say such background checks are flawed and create a false sense of security to users.  "It's so superficial that it's worthless," said Braden Cox, policy counsel with NetChoice, in an interview with Associated Press.

The emergence of ad networks and search navigation trends has fueled the business of buying and selling domain names over the years, in a report on CNN Money. 

Washington Internet Daily (subscription only) reports that two domain name registries released plans to stop "domain-tasting." In proposals to ICANN last week, .biz registry NeuStar and .info operator Afilias said they will cap the number of no-fee deletions made by registrars during the five-day "add grace period" when registrars can strike domains and get back a per-name fee paid to registries. Both proposals are still subject to ICANN approval.  Last month, ICANN announced it plans to charge annual fees on all registered domains.

Selling Grandma’s Old Earrings? In Colorado You Could be Committing a Crime

The Colorado General Assembly is evaluating a bill that would make it a criminal offense to sell common consumer goods such as cosmetics, value-loaded “gift” cards, non-prescription drugs and baby food via an internet auction.  The “company line” is that this will help address the sale of stolen goods online, but we believe it’s really a bill to prevent online auctions from competing with traditional retailers. 

Online auction sites would be required to interrogate people about how they acquired an item they want to list for sale…or be subject to criminal penalties.  This is preposterous and would earn Colorado the distinction of having the harshest anti-Internet commerce bill in the country.

It’s clearly an attempt to limit competition from online auctions since newspaper classifieds and other “off-line” sales are not affected, nor are non-auction Internet listings.

Blaming online marketplaces for organized retail crime ignores the root cause of the retail theft problem. The National Retail Federation conducted its own study of the problem in 2005, and found that:

•    Most retail theft occurs from a store’s own employees and retail vendors. Shoplifting accounted for less than one-third.
•    Retailers have pursued fewer prosecutions, arrests, and invoked civil recovery laws less frequently in 2005 compared to previous years.
•    Retail theft is not increasing. The rate has generally declined over the years, and is 12% lower that it was just 4 years earlier.

If enacted into law, this would impose extraordinary and discriminatory restrictions on Internet marketplaces and the thousands of Colorado consumers that use them every day.

Nebraska Attempting to Criminalize Ticket Resales

Similar to the Tennessee legislation we blogged about last week, the Nebraska legislature is trying to make it a crime to re-sell a ticket for more than 25% above the asking price.  As we did with Tennessee, we sent a letter voicing our concern to the Nebraska legislators.

It’s unfortunate that while Hannah Montana brought so much pleasure to her concert-fans, she brought as much angst to legislators, who are losing sight of how convenient and efficient secondary markets have become.   Again, we encourage lawmakers around the nation considering this kind of bill to step back and assess the business practices of the promoters and the primary market. 

We think they’ll be surprised.