Liability Risks For Businesses That Provide Free Wi-Fi to Customers

What have companies done to increase business?

In an increasingly online world, many companies throughout the country have enticed customers into doing business by offering free internet access.

For example, coffee shops, automotive repair centers, and restaurants have all considered it economically advantageous to offer customers access to the internet as a means of getting them to purchase goods. This setup has benefitted both businesses, who don’t mind paying for the internet if it means an increase in traffic to their stores, and consumers, who now can access the internet for free in a variety of different stores. However, with new changes in regulations affecting the internet, businesses might implement stronger security controls over their internet networks.

Why has providing internet access to customers caused problems for businesses?

On July 6, the Recording Industry Association of America (RIAA) and the Motion Picture Association of America (MPAA) announced their plan to cut down on piracy over the internet. Through an agreement with internet service providers like AT&T and Verizon, suspected internet pirates will be sent a sequence of five messages which encourage the suspects to cease and desist suspicious conduct. If illegal conduct continues, internet service providers have agreed to slow internet speeds, or even remove a person’s access from the internet unless change occurs.

Given the risky nature of downloading illegal content over the internet, internet pirates have incentive to use the free internet access provided to them by numerous companies courting their business. By doing so, pirates can more easily evade punishments internet service providers, the RIAA and the MPAA wish to impose. Businesses however, can suffer fines up to $150,000 if they are found vicarious or contributing to illegal content being downloaded through their internet connections.

What can businesses do to protect themselves?

Since businesses are liable if they find out about illegal downloads taking place through their business and do nothing to stop those downloads, businesses should immediately report suspicious activities conducted over through their internet connections. Other actions such as posting signs, and verbally indicating to customers disapproval for illegal downloading could deter individuals from questionable activities. Businesses can also use password protection technology to deter unwanted individuals from secretly using a company’s internet access without that company’s consent.

Other options such as censoring internet access to sites suspected of illegal piracy could further bolster businesses ability to combat internet piracy on over their own networks. Though none of these protections are perfect, perhaps they can help the RIAA and the MPAA prevent internet piracy while allowing businesses to avoid the serious legal consequences possible if individuals download illegally through their networks.

Filed Under: Internet Lawyer, Privacy Tagged With: free internet access, Internet privacy, internet service provider, internet service providers, internet-lawyer, liability risks for businesses that provide free wifi to customers, motion picture association of america, recording industry association of america, wi fi privacy, wifi privacy

Connecticut Internet Sales Tax Hurts Affiliate Marketers

What is the new Connecticut Internet Sales Tax supposed to do?

Connecticut has recently passed a bill which requires internet retailers to charge a sales tax on all goods sold in Connecticut if the internet retailer has a physical presence in the state.

Connecticut lawmakers considered the law necessary to hold Amazon.com and other online retailers accountable like all other businesses in the state. Lawmakers argue that it is not fair for Connecticut based ‘brick and mortar’ business to be subject to the state’s sales tax while Amazon.com is not. Aside from raising funds for the state in this time of economic uncertainty, the bill was also designed to protect Connecticut business from being unfairly outsold by online retailers not subject to the same tax laws.

Why did Amazon.com pull out of Connecticut?

The United States Supreme Court has ruled that a state can only tax an entity if that entity has some kind of a physical presence in the state. Regardless of whether Amazon.com has an actual physical ‘brick and mortar’ presence in Connecticut, the Connecticut legislature’s bill considers Connecticut-based bloggers and other internet content providers who advertise for Amazon.com a sufficient physical presence to subject Amazon.com to the tax. These bloggers and others or ‘affiliates’ advertise for Amazon.com because they receive a portion of the revenue generated by users accessing Amazon through their site.

After the new Connecticut Internet Sales Tax was passed, Amazon.com decided that it would rather give up on Connecticut based affiliates than be forced to pay Connecticut’s sales tax. In its economic calculation, Amazon probably found it more profitable to continue selling goods in Connecticut without having to pay the tax, than it would have been to continue advertising with Connecticut-based affiliates, while being subject on all sales to Connecticut’s new tax.

What effect will the Connecticut Internet Sales Tax have on Connecticut and on Amazon.com?

The immediate effect of the Connecticut Internet Sales Tax has been both a loss to Amazon.com and a loss to the Connecticut based affiliates that had previously generated income from Amazon’s advertisements on their websites. Amazon.com suffers to some extent because it can no longer advertise on the popular Connecticut blogs and websites it on which it had previously been an active advertiser.

To the Connecticut based affiliates, the Connecticut Internet Sales Tax will be perhaps even more traumatic. Not only is Amazon.com prevented from advertising on Connecticut based websites, but other online retailers might also fear subjugation to the Connecticut Internet Sales Tax, and avoid placing any advertisements on Connecticut affiliates websites. Perhaps the law is fair in the long run, as it prevents online retailers from having an unfair advantage, but in the short term, the Connecticut Internet Sales Tax cannot be said to be popular with either online retailers or the Connecticut-based affiliates that were once dependent on them.

Filed Under: Internet Lawyer, Internet Marketing, Internet Sales Tax, Marketing, Taxes Tagged With: Affiliate Marketing, affiliate-marketers, connecticut internet, connecticut internet sales, connecticut internet sales tax, connecticut internet sales tax hurts affiliate marketers, internet sales tax, internet-lawyer, new connecticut internet, sales tax

Law School Dean Goes to Prison for Making Internet Threats

What happened regarding a former dean of the Kaplan University Law School?

Former dean of Kaplan University Law School, Bennie Wilcox, was sentenced to a prison term of one year and one day following his conviction.

Last year, prosecutors sufficiently convinced a jury that Wilcox sent emails which threatened both the school in general, and Kaplan Inc. Chief Executive Officer Andrew Rosen in particular. Just recently, the judge of the US District Court for the Northern District of Illinois, Blanche Manning, sentenced Wilcox to confinement starting on September 16, and recommended that Wilcox serve his time at a federal institution in Florida.

What was Bernie Wilcox’s motivation for sending the threatening messages?

In 2007 Wilcox filed a suit with two other individuals against Kaplan, alleging that they had received student loan proceeds under false pretenses. Though Wilcox maintains that Kaplan acted in an illegal way, prosecutors encouraged the jury to ignore claims against Kaplan, and to instead look to the evidence of Wilcox sending the threatening messages to the school and its representatives. Despite the allegations from Wilcox, Kaplan continues to maintain its innocence, and asserts that Wilcox merely acted as a disgruntled former employee by filing suit against the education company.

The controversy emerges just as for-profit schools in the nation face close scrutiny by consumers and federal lawmaking officials. Statistics show that students at for-profit colleges default on their loans twice as often as students at public colleges and universities, and three times as high as students at non-profit private schools. In response to the statistics demonstrating difficulties experienced by for-profit institutions, the Obama administration announced it would strip for-profit institutions of the ability to participate in US student loan programs if for-profit schools continue to improperly prepare their students to repay the loans.

Why was Bennie Wilcox convicted?

Though Wilcox at trial denied transmitting the threatening emails, prosecutors presented both handwritten and videotape confessions Wilcox had made prior to trial in which Wilcox admitted to having sent the messages. At trial Wilcox claimed the confessions were made in an effort to protect his wife, who he claimed might have written the threatening emails following her alleged sexual abuse by a Kaplan executive. This argument, however, did not persuade a jury to find Wilcox not guilty.

Despite evidence that at least one of the threatening emails was sent via an account not belonging to Wilcox, prosecutors still prevailed in proving that Wilcox was, in fact, responsible for the threatening messages. In a world where determining who responsible for what submission on the internet is difficult, this case proves the possibility for conviction in such circumstances.

Filed Under: CyberCrime, Internet Lawyer Tagged With: federal lawmaking officials, internet harassment, internet threats, internet-lawyer, kaplan university law, law school dean, law school dean goes to prison for making internet threats, law-school, northern district of illinois, university law school