Legal Issues Posed by Mobile Commerce (M-Commerce) By Rami Olwan Al Tamimi & Company Advocates and Legal Consultants E-commerce

, which is conducted by personal computers (PC’s), is expanding due to the widespread use of mobiles and personal digital assistants (PDA’s), and other handheld devices used for Internet purchasing. New type of e-commerce is emerging and it is called M-Commerce. In this type of commerce, known as mobile e-commerce or M-Commerce, the user uses an Internet connection to access the World Wide Web (“web”) from different locations and can engage in purchasing and trading from virtually anywhere. Mobile commerce involves a party using his/ her mobile or PDA to conduct purchasing transactions. Mobile commerce is a unique form of electronic commerce in that electronic transactions are conducted by wireless mobiles instead of ordinary PC’s. Mobile commerce is becoming increasingly popular in countries like Japan where people use mobiles and i-mode services, as part of their normal daily routine, to check email, browse the web, chat, shop, make airline reservations, search and conduct purchasing and banking transactions etc. In order to access the Internet and conduct purchasing transactions the cellular device or PDA must support such capability i.e wireless application protocol (WAP) or other competing protocol such as general packet radio service (GPRS) using wireless mark up language/ WML and WML Script to make the interface between the mobile and the Internet. Businesses wishing to conduct sale and purchase transactions through mobile must create WAP or i-mode portals that allow them to adapt webpages for individual mobile and optimise them so they fit the mobile screen which is relatively small compared to the screen of an ordinary PC’s. Mobile commerce raises legal challenges and various issues, which will be explained using practical examples that show the difficulty in applying traditional laws and principles to the use of those new technologies. When a person uses his/ her mobile or PDA to submit or confirm a purchase order or when a seller sells goods and services through portals allocated to receive requests from wireless devices via specific network providers, the resulting interrelationship between the various parties poses many legal questions which concern the nature of the relationships and how, ideally, they should be regulated, and by whom. Among the legal issues, which need to be considered, are the various forms of mcommerce contracts, identifying the contracting parties and their legal capacity to

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contract, when the contract will be formed and how they can be proved and other traditional issues of e-commerce contracts, which are beyond the scope of this article. Another legal challenge is determining the ideal method of payment. What is the acceptable method of payment for purchases made through one’s mobile? Will payment be processed by Internet credit card, which is already widely used in e-commerce, or by another method specifically devised for mobile commerce? An important question is, of course, applicable law and the courts having jurisdiction in disputes arising from the use of mobile to transact business and conclude m-commerce contracts. Now if an Emarati customer residing in Lebanon uses his/ her mobile while traveling to Syria to purchase software from a German firm whose server is located in the USA, what law would apply? Is it the law of the country of citizenship of the customer, the law of his/ her domicile, the law of the jurisdiction in which he/ she purchased the software, the law of the jurisdiction in which the seller is located, the law of the jurisdiction in which the server on which the seller receives requests is located or the law of another jurisdiction? Which courts have jurisdiction in a dispute arising between a buyer and seller, the courts of the seller’s country, the courts of the buyer’s country or the courts agreed by the parties? A mobile user can use a digital camera installed on a wireless device to take photos, exchange with other users and sending them over the Internet. This may, if done without authorisation, result in an infringement of intellectual property rights, including, among others, copyright. But then who would be liable for the infringement? Is it the person who exchanged the photos and images or the network operators who facilitated the exchange? Is it possible to identify particular infringers? And how can they be followed and brought to justice? A slightly different, but no less important issue, is privacy. The new generation of mobiles and other technology conveys a lot of information about the user to the network operator who is able to pinpoint the user’s whereabouts and track his/ her comings and goings. Companies can purchase such information, which may lead to a larger scale breach of privacy, as presently witnessed with PCs and even more. Do effective measures exist in the form of legal and technical protection to counter those threats? Will privacy laws be revised, domestically and internationally, to reflect the latest developments in the field of wireless communications? The last issue is crime. Wireless networks carry a high crime risk. Hackers can steal and erase information and data from mobiles and disrupt wireless network traffic by overloading the network with information and phone messages. Viruses often infect mobiles causing them to switch off randomly or erasing all addresses and information stored within. The key question is whether existing criminal laws will be amended to incorporate penalties for these new types of crime and how will those penalties be enforced

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Wireless communication will clearly have a greater impact on our daily lives but with technology changing so rapidly and the inability to forecast its future direction, it is impossible at this time to identify what challenges and difficulties will come from the use of mobiles for commercial transactions. This article highlighted some of the legal questions raised by m-commerce which are somewhat similar to the legal challenges facing e-commerce but different in other respect due to the sophistication and the distinguished characteristics of the new technologies.

4146 21.11.04 Article on M-Commerce