Today most businesses use the Internet to either conduct business or promote themselves, and there are several legal issues to be aware of. The digital world presents unique challenges that existing laws did not adequately cover, so several new laws were enacted beginning in the late 1990s.

Digital Millennium Copyright Act of 1998 (DMCA)

The DMCA has a lot of parts, but in essence it was created to ensure that copyrightable works are protected even if created in digital form. You automatically gain copyright protection as soon as you create a work (write a song or article, for example), and since Jan. 1, 1978 this protection lasts for 70 years after the creator's death. It does not matter what form the work takes, but because it is so easy to copy and redistribute digital creations, this act specifically protects them.

Three of the main provisions are:

  • You cannot distribute digital materials you do not hold the copyrights to without permission from the copyright holder. This includes written works, music and software.
  • You cannot circumvent protective measures intended to control access or copying, like the digital rights management (DRM) on music or video.
  • ISPs and other companies that allow users to post content are not responsible for violations committed by those users. The company does need to remove the content in question or otherwise block the user from continuing to violate copyrights.

The DMCA also provides a way for copyright holders to take action against violators. If someone uses your material without permission, you can send a DMCA takedown notice, informing him or her of your copyright and requesting removal of the offending material. You can send the notice directly to the person or to the webhost, who will forward it to the offender. Often the violator will agree to take down the material, but if he or she sends a counter-notice, you may have to go to court.

The government can also bring criminal charges for copyright infringement. First-time offenders may get as much as five years in prison and a $500,000 fine and second-time offenders twice that.

Communications Decency Act, Section 230 (CDA 230)

CDA 230 is part of the Communications Decency Act of 1996. This act was passed to regulate indecent or obscene materials on the Internet, and it forbids sending or granting access to sexual or otherwise obscene materials to children under 18 years.

Section 230 protects companies and individuals who allow users to publish their own content, even if that content is controversial or obscene, from liability for their users' statements. So, hosts of message boards or classified ads are not legally responsible for the content of posts. Likewise, social media companies, like Facebook or Twitter, cannot be held liable for members' updates. And bloggers are not responsible for readers' comments or even the contents of guest bloggers' posts. This is true even if they approved the material before publication or don't take action after receiving notice of the offensive content.

Uniform Domain-Name Dispute-Resolution Policy (UDRP)

This policy regulates disputes over domain names and is applicable to all top level domains (TDLs). It was passed to protect trademark holders and prevent cybersquatting, which is when someone registers domain names related to other companies' trademarks, hoping to benefit or profit in some way from the use or sale of the domain.

All domain-name registrars accredited by the Internet Corporation for Assigned Names and Numbers (ICANN) follow the UDRP. Under this policy, when you register or renew a domain name, you are also promising that:

  • The name does not infringe on or otherwise violate another's rights. It is your responsibility to make sure this is true.
  • You will not use the domain name for unlawful purposes or knowingly violate any laws or regulations.
  • If you do register or use the name unlawfully or if the name is identical or similar enough to be confused with someone else's trademark, you will take part in a mandatory administrative proceeding with a dispute resolution provider.

Dispute resolution under UDRP is similar to arbitration. Both sides submit written arguments, either paper or electronic. Panelists, generally legal professionals, review the submissions and issue a written opinion. The panel may:

  • Deny the complaint, allowing the domain-name holder to keep it
  • Order transfer of the name to the person or business who filed the complaint
  • Order cancellation of the name