Myles M. Mattenson
ATTORNEY AT LAW
5550 Topanga Canyon Blvd.
Woodland Hills, California 91367
Telephone (818) 313-9060
Facsimile (818) 313-9260
|"The Mediterranean Sea And Cyberspace. Standing On The Threshold!"|
The Mediterranean Sea And Cyberspace. Standing On The Threshold! Early Greeks, Phoenicians and Egyptians conducted extensive commerce in the Mediterranean Sea. Initially undertaken by adventuresome risk takers, the activity expanded to become a dominant economic force in the region. As maritime activity expanded, various tribunals were set up in Mediterranean port towns to determine disputes arising among the seafarers. After some time had passed, the tribunal activity eventually led to a codification of the customary rules by which various courts became bound. This body of law, known as admiralty law, governed the legal relationships arising from the transportation of cargo and passengers on the high seas and other navigable waters. At this point, "So what!" is probably an expression which crosses your mind. But reflect for a moment. Just as early travelers stood at the edge of the Mediterranean Sea and pondered the rules and principles which might govern their travel on that body of water, so we now stand at the edge of cyberspace and wonder what rules and principles will guide our travels through the Internet. Legislation has been introduced in Congress recently to permanently ban new Internet sales taxes. The Chairman of the National Governors' Association, however, argues against the ban. He observes "it's fundamentally bad tax policy to treat one method of selling different from another. The Internet doesn't need any special privileges." It is said that state and local governmental officials fear that a growing Internet economy will erode the tax revenues that has sustained basic government services, such as schools, roads and highways. According to Washington Technology, a business newspaper directed toward governmental concerns, state and local governments lost an estimated $170,000,000 in potential sales taxes in 1998. This amount, however, is equivalent to only one-tenth of one percent of total sales in use taxes collected by all state and local governments. As consumers flock to tax-free online business activity, this amount will undoubtedly increase exponentially. The issue of sales tax is not the only problem confronting consumers and governments as we began our early sojourn into cyberspace. The St. Louis Galleria, according to the Wall Street Journal, recently informed its 170 retail tenants of a new policy prohibiting any in store "signs, insignias, decals or other advertising or display devices which promote and encourage the purchase of merchandise via e-commerce." Since mall tenants pay percentage rental in addition to a base amount of rent, the Galleria landlord expressed a concern that "if a sale is rung up on the Internet, then it's not rung up in the store . . . and conceivably the retailer could charge online returns against store sales." Although it is reported that some retailers have complied with the policy, most tenants continue to promote their website. Internet related disputes are on the rise. Lawyers gather together to discuss problems such as security and potential liability of conducting business over the Internet, laws on privacy and cyberspace, and whether a website subjects an individual or company to jurisdiction in other states or countries. Just as sailors in ancient times struggled to reach consensus regarding the rules of travel on the high seas, we too now stand at the edge of cyberspace and find ourselves challenged by the multitude of issues presented by cyberspace commerce.
[This column is intended to provide general information only and is not intended to provide specific legal advice; if you have a specific question regarding the law, you should contact an attorney of your choice. Suggestions for topics to be discussed in this column are welcome.] Reprinted from New Era Magazine Myles M. Mattenson © 2000-2002