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Mobile commerce or m-commerce is one of the latest waves to hit the Internet beachhead. M-commerce applications enable wireless devices to be used for purchasing goods; reserving, purchasing and taking delivery of tickets; making banking transactions; paying bills; receiving and using e-coupons and vouchers; accumulating royalty points; paying highway tolls; and locating the nearest gas station or favorite restaurant. Because m-commerce is e-commerce with a twist — the user display is much smaller and the user’s location is not fixed — some of the same legal issues also face transactions conducted using wireless devices. The biggest legal concerns for m-commerce are authentication, security and privacy. The Electronic Signatures in Global and National Commerce, signed into law last year, allows the parties in the transaction to decide what is an accepted e-signature. The act states that an e-signature may be an “electronic sound, symbol or process” that is “attached to or logically associated with a contract or other record and executed or adopted by a person with the intent to sign the record.” M-commerce-enabled wireless devices may be encoded with a unique identifier that can be linked to an individual, a telephone number, location information and other data. Public Key Infrastructure (PKI), which is used to authenticate credit card transactions over the Web, is expected by many to play a prominent role in e-signatures for wireless transactions. M-commerce on WAP-enabled (wireless application protocol) phones may be secured by Java and wireless identity modules using PKI. Other authentication technologies are being developed, such as personal smart cards and biometric identification (finger prints, voice recognition, iris scans). The financial and banking institutions may be the first off the block in adopting e-signature technologies to be used routinely for financial transactions. Whether the courts will recognize these various authentication methods and technologies remains to be seen. Security for m-commerce transactions is needed to ensure that the data passing between the parties cannot be hijacked. Unlike a wallet taken at gunpoint, a credit card number that was intercepted while transmitted to a merchant’s Web site remains undetected by the user — until the monthly statement arrives. Wireless transport layer security, the security layer for WAP, and encryption techniques, such as public-key encryption, have been developed to protect the transmitted information. Unlawful intentional interception and disclosure and use of electronic communications are prohibited by the Electronics Communications Privacy Act (ECPA). Electronic communications are defined by the act as “any transfer of signs, signals, writing, images, sound, data or intelligence of any nature transmitted in whole or in part by a wire, radio, electromagnetic, photoelectric or photo-optical system.” ECPA applies privacy protection to communications using radio paging devices, electronic mail, cellular phones, private communication carriers and computer transmissions. The act further prohibits obtaining, altering or preventing authorized access to stored wire or electronic communication at a facility where electronic communication service is provided. Criminal as well as civil penalties are provided by the act. It remains unclear whether the ECPA protects the wireless transfer of data since its definitions rely heavily on wired transmission systems and oral communications. In 1994, Congress passed a provision making it clear that the privacy of wireless data transfers was protected by ECPA; however, less than two years later, Congress repealed the provision in the Anti-Terrorism and Effective Death Penalty Act of 1996. For m-commerce to move forward, the security of wireless communications must be protected on the same footing as wired communications. THE NEXT KILLER APP Privacy in the wireless arena is another legal issue yet to be addressed. A common denominator of proposed state and federal privacy legislation is the posting of a prominent notice and the provision of a privacy policy for Web sites. It will be interesting to see what the display of a prominent notice means on small screens typically found on wireless phones and personal digital assistants. Online surfers do not have protection from activities that track online behavior by using cookies, Web bugs and new technology developed in the future. As members of Congress have introduced numerous bills to address issues such as the notice requirements, opt-in or opt-out consent requirements for collection and disclosure of personal information, allowing consumers to access their own data collected by companies and other issues, this body of law is in flux and will not be settled for quite some time. Whether it’s B2C or B2B (business to consumer or business to business), m-commerce won’t be widely used in the United States if these legal issues are not addressed by the legislature and the courts. Widespread usage also depends on companies and institutions finding the next killer application that will bring m-commerce to the forefront of commercial transactions — the United States now lags behind Japan and Europe. Sabeer Bhatia, a co-founder of Hotmail, predicted at a March TiE (The IndUS Entrepreneurs) meeting in Dallas that m-commerce will not be as widely accepted in America as in Japan and Europe because of the deeper penetration of the desktop PC in the United States. He reasoned that most Americans would prefer to use a desktop computer to surf the Web and conduct transactions rather than a small-screened wireless device. However, he may be underestimating the power of new applications that can provide location-dependent information and transactions to today’s highly mobile consumers and Internet users who always look for shortcuts. Only the future will tell.

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