7 Internet Lawyer Predictions to Help You Prepare for 2013

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internet lawyer predictions

Internet Lawyer Mike Young’s 2013 Predictions

If you’re doing business online, here are seven Internet lawyer predictions of what to expect in 2013.

The crystal ball might be cracked. However, if you own a website, it’s worth reading to see where Internet law is heading and how it can affect you.

1. Internet Sales Tax Spree

A broke Uncle Sam will raise revenue by passing a federal Internet sales tax in the interest of “fairness” (Marketplace Fairness Act, Main Street Fairness Act, We Want Your Money Fairness Act, etc.). More states will pile on to pass state Internet sales taxes too even though existing ones are being challenged as unconstitutional.

These are another big hurdle for small ecommerce websites. The big sites (Apple, Amazon, etc.) already have the infrastructure in place to handle collecting and remitting new sales taxes.

2. FTC Makes Headlines Protecting Children and Aspiring Business Owners

The U.S. Federal Trade Commission (FTC) will force a few bad apples into big settlements that grab headlines. These settlements will involve allegations that certain website owners violated the business opportunity rules that were updated in 2012 and the new children’s online privacy rules that go into effect July 1, 2013.

A few smaller fish will also get caught by the FTC too. The big fish make the headlines. The little fish are a reminder that the regulations apply to website owners regardless of size.

3. Internet Marketing Guru Witless Protection Program Expands

Flying Amelia Earhart Airlines, many of the Internet marketing gurus disappeared from the scene in 2012.

Why?

Some are broke. They can barely afford to renew their domain registration fees in order to sell recycled garbage.

Many are scared witless…they are keeping a low profile hoping that past marketing sins don’t land them in trouble with the government and private civil lawsuits. You’ll find them hawking “geolocal” and mobile marketing scams to small brick-and-mortar businesses.

Love him or hate him, Salty Droid / Jason Jones played a large part in exposing some of the worst deceptive and fraudulent practices online. Although I didn’t always agree with the targets he chose, at least 90% of the time he shed light on sociopaths and psychopaths who preyed upon ordinary people and fleeced them with info products that were either stale or never worked in the first place.

4. Stupid Federal Internet Privacy Laws Will Pass

Claiming to protect the Intertubes, bipartisan idiots will pass privacy legislation that does nothing to protect privacy but creates unworkable and burdensome mandates for website owners to comply with. These ignorant pointy-haired bosses will punt issue to the FTC to create regulations to enforce the bad law.

Somehow true Internet privacy protection never enters the mix. For example, congressional grifters will continue to turn a blind eye to federal, state, and local law enforcement searching your Gmail accounts without a warrant. Got to protect that “homeland security” after all by snooping through your email.

5. Social Media Sites Gut Internet Privacy – Nearly Everyone Yawns

Wall Street, and even journalists, are starting to figure out that having a big social media site that goes public is more like a pump-and-dump scheme because there’s little underlying revenue to support stock price.

Existing stockholders who overpaid (dupes) and venture capitalists wanting to go public with the “next Facebook” are going to demand some real revenues as part of the business model.

This means selling user data and intellectual property, and gutting social media privacy policies in order to legally do so. To be sure, there will be Instagram-type backlash by the same idiots who would be shocked to discover gambling exists in Las Vegas.

Yet 95% of users will accept modified privacy terms, no matter what they give away in the process, in order to keep using their favorite social media sites. The other 5% will quit and will be replaced over time.

6. Internet Gambling Interests Roll the Dice

Although unlikely to pass in 2013, major casinos will push hard for legalizing Internet gambling like the bill sponsored by Congressman Joe Barton. Some of these casinos have already inked joint venture deals with online gambling outfits that operate outside of the United States.

The coming year will set the stage for eventual passage of a federal Internet gambling bill. The primary roadblock in 2013 will be states that don’t want to lose revenues from their lotteries to online gambling.

Once the federal and state governments can agree on a system of divvying up the new tax revenue, online gambling will be sold/auctioned off to existing gambling powerhouses. The capital and regulatory requirements will make it difficult, if not impossible, for an entrepreneur to set up a startup to compete head-to-head with these interests.

7. SOPA/PIPA Piecemeal Passage

Hollywood’s trained monkeys, like Congressman Lamar Smith and former Senator Christopher Dodd, will cherry pick parts of the Stop Online Piracy Act (SOPA) and the Preventing Real Online Threats to Economic Creativity and Theft of Intellectual Property Act (PROTECT IP Act or PIPA) to pass into law in pieces under the public’s radar.

Having been cyber tarred and feathered in early 2012, these Honey Boo Boo rejects are likely to attempt passing bits and pieces of this bad legislation rather than repackaging all of it into a renamed bill that will face overwhelming opposition again. Knowing how UnRepresentative Smith and his ilk operate, you should expect parts to be attached as riders to appropriations and other key bills typically pass without controversy.

As a general rule, if an intellectual property bill is supported by Congressman Smith or his lobbyist cronies at the Motion Picture Association of America (MPAA) or the Recording Industry Association of America (RIAA), the proposed legislation is bad for ecommerce, free speech, and intellectual property rights.

…That’s it for the coming year. If you’d like to see how well the crystal ball did for the past year, check out my Internet lawyer predictions for 2012.

GoDaddy Outage: Dangers of Domain Name Registration and Hosting

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When website hosting at GoDaddy went out for six hours, site owners were ticked off. Whether caused by tech gremlins or hackers, there’s a bigger point that needs to be made for business website owners…
Never have your website hosted by the same company where your site’s domain name is registered.
If your site goes down for any reason (hacking, IT problems, copyright infringement claims, etc.), it’s a lot harder to go live again if your website’s domain name is registered with the same company that hosts your content. You’re at the mercy of one company that’s probably being swamped with client support calls if there’s a mass web hosting outage.
Instead, use separate companies to register your domains and host the content for the related sites. If your content goes down, you should be able to quickly point the domain name to new servers at an alternative host.
In other words, don’t put your domain name registrations and website hosting in one basket of risk.
As a final note, let me say that I generally like and have used GoDaddy as a registrar. Other than the GoDaddy’s dumb initial support of the Stop Online Piracy Act (SOPA) that it retracted, GoDaddy is a pretty decent company. But like its competing hosts and domain registrars, you should seriously consider picking them to do one thing for you and finding another company to handle the other.

CISPA: Just say no to the Cyber Intelligence Sharing and Protection Act

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Sponsoring the Cyber Intelligence Sharing and Protection Act of 2011 (CISPA) Congressman Mike Rogers (R-Michigan) is competing to see if he is more evil than SOPA sponsor Lamar Smith (R – Texas).

The bill’s stated purpose is…

[t]oprovide for the sharing of certain cyber threat intelligence and cyber threat information between the intelligence community and cybersecurity entities, and for other purposes.

The official summary of the bill by the Congressional Research Service states that CISPA…

[a]mends the National Security Act of 1947 to add provisions concerning cyber threat intelligence and information sharing. Defines “cyber threat intelligence” as information in the possession of an element of the intelligence community directly pertaining to a vulnerability of, or threat to, a system or network of a government or private entity, including information pertaining to the protection of a system or network from: (1) efforts to degrade, disrupt, or destroy such system or network; or (2) theft or misappropriation of private or government information, intellectual property, or personally identifiable information. Requires the Director of National Intelligence to: (1) establish procedures to allow intelligence community elements to share cyber threat intelligence with private-sector entities, and (2) encourage the sharing of such intelligence. Requires the procedures established to ensure that such intelligence is only: (1) shared with certified entities or a person with an appropriate security clearance, (2) shared consistent with the need to protect U.S. national security, and (3) used in a manner that protects such intelligence from unauthorized disclosure. Provides for guidelines for the granting of security clearance approvals to certified entities or officers or employees of such entities. Authorizes a cybersecurity provider (a non-governmental entity that provides goods or services intended to be used for cybersecurity purposes), with the express consent of a protected entity (an entity that contracts with a cybersecurity provider) to: (1) use cybersecurity systems to identify and obtain cyber threat information in order to protect the rights and property of the protected entity; and (2) share cyber threat information with any other entity designated by the protected entity, including the federal government. Regulates the use and protection of shared information, including prohibiting the use of such information to gain a competitive advantage and, if shared with the federal government, exempts such information from public disclosure. Prohibits a civil or criminal cause of action against a protected entity, a self-protected entity (an entity that provides goods or services for cybersecurity purposes to itself), or a cybersecurity provider acting in good faith under the above circumstances. Directs the Privacy and Civil Liberties Oversight Board to submit annually to Congress a review of the sharing and use of such information by the federal government, as well as recommendations for improvements and modifications to address privacy and civil liberties concerns. Preempts any state statute that restricts or otherwise regulates an activity authorized by the Act.

Under the guise of protecting cyber and national security, the bill would allow the government and private companies — like your Internet Service Provider (ISP) or Facebook — to share information with each other about “threats.” Those threats are not clearly defined and there’s no requirement that any information shared be stripped of personally identifiable information either. At a minimum, this bill encourages companies to become spies for the government.

Like the SOPA debacle, the Electronic Frontier Foundation is fighting against CISPA. Join the fight against this attempt to destroy your online privacy.

7 Internet Law Predictions for 2012

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1. Hollywood Retreats

The entertainment industry thought it had bought enough politicians, plus foolish support by GoDaddy (now retracted), to ram through SOPA/PIPA legislation. Pretending to be about property rights, this horrible legislation would cripple ecommerce while allowing politicians in power to crush free speech online.

Now that Google, Amazon, Facebook, etc. are fighting back, together with civil rights groups and social media, it looks like Hollywood will retrench and regroup until after the November 2012 elections. This battle isn’t over by a long shot. Look for the entertainment industry to try one last shot to push through SOPA/PIPA when Congress critters return to D.C. More lipstick will be put on this legislative pig and it will come back in 2013 under a different name (Protect the Children Act, Save the Puppies Act, Don’t Starve Grandma Act, etc.) designed to create more sympathy.

Let’s hope large ecommerce sites continue to fight and GoDaddy has learned its lesson.

2. Privacy Changes

As Congress deadlocks on Internet privacy legislation, look for the Federal Trade Commission (FTC) to move forward with additional regulatory protection for children. Either in 2012 or the following year, look for bans or severe restrictions on GPS tracking of children by smart phone apps.

In the meantime, the private sector will come up with additional ways to both protect and circumvent Internet privacy. Whatever comes out of Washington will be obsolete before it becomes law.

3. New Biz Opp Disclosure Requirements Ignored

Effective March 1, 2012, there are new FTC biz opp/work-at-home disclosure requirements. Expect most Internet marketers to ignore this requirement. Some will make disclosures that contain misleading information designed to fool consumers. Few will get caught. The FTC will grab some headlines by suing and confiscating assets of a couple of the really bad apples.

4. Internet Sales Taxes Move Forward

The Federal “main street fairness” Internet sales tax legislation will have the support of both Wal-Mart and Amazon. Expect crony capitalists at the U.S. Chamber of Commerce to jump on the bandwagon.

Broke states (California, Illinois, etc.) will push heavily for a federal Internet sales tax on the mistaken assumption they will receive a chunk of the tax money from D.C.

The primary advantage that small business website owners have is that the November 2012 elections provide no incentive for the Republican House and the Democrat Senate to cooperate on agreeing to the time of day or anything else. Plus, there seem to be few Republicans in either house that want to face their constituents to defend imposing a new tax in the middle of an economic recession.

5. Want to bet?

It looks like the U.S. Department of Justice is rethinking its use of a 1961 law to arrest and prosecute the owners of Internet gambling sites. Expect broke state governments to push heavily for legalization of intra-state Internet gambling. In other words, these state governments are going to want the federal government to permit gambling sites to be licensed on a state-by-state basis for gambling only by residents within the one state where each site is licensed.

It remains to be seen whether traditional offline gambling interests will support or oppose such plans. Some of the major U.S. casino companies are already investing in joint ventures with European gambling sites with the expectation of rolling out U.S.-based sites once they become legal.

6. Denial of Service

In the interest of “homeland security,” the U.S. government will continue to arbitrarily shut down websites without affording due process in court. There will not be a backlash until the government overreaches and shuts down a social media website that has political backers on Capitol Hill willing to subpoena and grill those involved.

7. Icann of .Coke

The FTC will continue to pressure Internet Corporation for Assigned Names and Numbers (ICANN) about the foolish decision to sell .brands generic top level domain extensions for six figures. If ICANN proceeds, expect a wave of lawsuits to swamp the courts as Competitor A buys the .CompetitorB extension to steal traffic away from Competitor B.

…Wishing you the best in the coming year. Let’s hope the politicians don’t muck up ecommerce for small business owners. Congress doesn’t understand the Internet so it should just stay on the sidelines instead of ruining it for the rest of us.