Sunday, December 10, 2000

Cyber Crime: Weak Laws Threaten eCommerce

Gaps in national criminal laws make successful prosecution of international cyber crimes uncertain in many countries, according to a report issued today by McConnell International LLC, a global policy and technology management consulting firm. The report, Cyber Crime . . . and Punishment? Archaic Laws Threaten Global Information, finds that only nine of 52 countries analyzed have extended their criminal laws into cyberspace to cover most types of cyber crimes.

“The long arm of the law does not yet reach across the global Internet,” said Bruce W. McConnell, the firm’s president. “Organizations must rely on their own defenses for now. Governments, industry, and civil society must work together to develop consistent and enforceable national laws to deter future crime in cyberspace.”

The report looked at ten different types of cyber crime in four categories: data-related crimes, including interception, modification, and theft; network-related crimes, including interference and sabotage; crimes of access, including hacking and virus distribution; and associated computer-related crimes, including aiding and abetting cyber criminals, computer fraud, and computer forgery. The report analyzed Albania, Australia, Brazil, Bulgaria, Burundi, Canada, Chile, China, Cuba, Czech Republic, Denmark, Dominican Republic, Egypt, Estonia, Ethiopia, Fiji, France, Gambia, Hungary, Iceland, India, Iran, Italy, Japan, Jordan, Kazakhstan, Latvia, Lebanon, Lesotho, Malaysia, Malta, Mauritius, Moldova, Morocco, New Zealand, Nicaragua, Nigeria, Norway, Peru, Philippines, Poland, Romania, South Africa, Spain, Sudan, Turkey, United Kingdom, United States, Vietnam, Yugoslavia, Zambia, and Zimbabwe to determine whether their laws had been amended to cover these crimes.

. Thirty-three of the countries surveyed have not yet updated their laws to address any type of cyber crime. Of the remaining countries, ten have enacted legislation to address five or fewer types of cyber crime, and nine have updated their laws to prosecute against six or more of the ten types. Of those countries, only one, the Philippines, indicated that updated legislation is currently in place to prosecute a future perpetrator of all of types of crimes.

Harris Miller, President of the World Information Technology Services Alliance (WITSA), stated, “This report underscores the importance of ongoing public and private sector efforts to improve the security of cyberspace. By working closely with industry, governments can create legal regimes that deter cyber crimes while assuring continued technological growth and innovation.”

In addition to highlighting the efforts of 19 countries that have partially or fully updated their criminal laws, the report identifies efforts underway in 17 countries that have not updated their laws, including Cuba, Latvia, New Zealand, and Zambia.

Entertainment Industry Missing Out On Major Online Revenue Opportunities
Entertainment properties are under-leveraged online, according to Jupiter Research, the worldwide authority on Internet commerce. While "official sites" - branded online entertainment properties - benefit from off-line promotions, branded URLs and exclusive content to drive large numbers of site visitors, they consistently underperform rights holders' expectations. Entertainment companies undervalue their online properties by limiting online exposure to a single "official" site or by granting all online rights to a single partner.

A Jupiter Research Executive Survey found that the majority of entertainment executives describe the role of an entertainment brand's Web site as: for distribution of existing content (82%), distribution of original content and existing brand (82%), for marketing off-line assets (77%) and for the sale of merchandise online (68%).

"While entertainment executives are on target in their thinking about the diverse role of an entertainment brand's Web site, they are not taking the appropriate steps toward fulfilling these goals," said Aram Sinnreich, lead analyst of Jupiter Research's report: Valuing Entertainment Rights.

According to Jupiter, to maximize the value of entertainment properties and minimize the costs of bringing those properties online, rights holders must explore partnerships with several licensees, parceling only the rights necessary to each. This will maximize the value of each deal and increase the number of viable online channels for a given property.

To structure these deals entertainment companies must look to licensing relationships with partners that possess the expertise the rights holders lack, such as programming, marketing, and selling on the Internet. Because no rate card yet exists, these deals must be constructed with both a performance based and upfront cash component.

"Most entertainment executives are concerned that granting rights to multiple licensees will damage the integrity of their brand online," said Sinnreich. "However, parsing licensing agreements among various partners is the only strategy that will allow entertainment companies to maximize their online value. Entertainment companies must stop viewing the Internet as a distribution medium equivalent to broadcast or film, and recognize it as a platform that offers a virtually limitless number of products. Brand integrity can be maintained despite multiple licensing relationships by operating an umbrella site with links to various licensee sites, which in turn would link back to the main site."

Jupiter predicts that ultimately, digital rights will splinter into as many different fragments as there are viable uses for an entertainment property online. The possibilities are vast, since the Internet is not so much a distribution medium, like television, as it is a virtual reflection of the off-line world--one that can serve as a distribution platform, commerce platform, marketing platform, and communications platform.

News Tidbits (appears every day on front page)
- In what is being hailed as the Internet's first libel verdict, a doctor posting an anonymous message on Yahoo has been ordered to pay the doctor he libeled a total of $675,000. The message made false allegations that caused a doctor to have to resign his position.

- Using your fingerprint as password protection is one step closer. A German electronic manufacturer is making a device called ID Mouse, which has sensors on the mouse that can instantly scan your fingertip with the use of 65,000 sensor elements.