Laws of everything and the digital economy (1)

ComputersTHE buzzword around ICT circles in Nigeria these days is “Broadband”. Technically, it refers to high-speed data transmissions over the Internet using different technologies such as 4G, LTE and WIM AX. The Broadband ecosystem comprises of the Networks, devices, applications and content.

This presupposes that a lot of Bandwidth will be required to transmit large amounts of voice, data and video information at accelerated Megabits or terabytes per second. A common scenario for Nigerian businesses is when you want to download work related documents from a server located several miles across the Atlantic and you literally can go and make a cup of coffee while you wait for your document to download, coupled with public electricity access bottlenecks that greatly hinder productivity. This equates to a low Broadband quality index and a digital divide gap.

Leveraging on Nigeria’s success with GSM networks and the current reforms in the power sector, Nigeria is well positioned to realise her 2020-plus goals and objectives. Broadband is the modern tool for global competitiveness. Countries without it will drift into economic and industrial oblivion. Voice, data, video, Digital Broadcasting, Smart Electricity grids, Fluid accounting and metering using –Electronic Pipeline Surveillance Systems (EPSS) in the oil and gas sector and Mobile Money infrastructure for financial inclusion will depend heavily on robust Broadband Networks.

Nigeria has unique economic, institutional and demographic challenges; our broadband policy must take cognizance of these factors so as to spur economic growth and innovation, Policy should also be geared towards stimulating both the supply and demand for Broadband. Many international Broadband plans focus on speed and networks as a measure of a successful broadband system. However, a holistic plan should also include how to use these networks more efficiently and effectively.

The Broadband policy should include tax incentives for investors and removal of regulatory barriers to infrastructure deployment. Such barriers may include non-transparent spectrum policies, rights of way for fiber deployment, universal service Funds for rural build-out across the six geopolitical zones; attracting investments in the neighbourhood of $75 billion. Performance disclosure requirements must be insisted upon by the NCC from service providers as well as broadband standards. Special access rates for consumers must be reasonable and just. Affordability should be at the heart of the policy and clarifications should be sought on interconnection rights and obligations of all network providers.

Data roaming policy should be well articulated to reflect global best trends while trusted third parties may assist with managing online identities in a way that maximises privacy and information security. Spectrum fees should reflect its true value. Allocation, licensing and utilisation should be geared towards efficiency as well as accommodating new technologies like cloud computing and digital broadcasting.

Law is currently on the digital frontier. Transactions that were formerly conducted offline are now largely done online with parties not having any physical contact. This makes business organisations vulnerable to online fraud and insecure information systems that harbor critical proprietary business assets. In any e-commerce strategy stakeholders should identify legal issues that may hinder the contractual relationships leading sometimes to huge financial losses especially in a global context where multinationals trade across borders. Consequently, rudimentary matters such as libel and defamation, trademark and copyright, to more advanced issues like restrictions placed on product or service in specific jurisdictions or even online taxation, as well as legal aspects of information- security and third party rights of access will become imperative.

Google, the search engine giant, was a few years ago queried by the government of the United Kingdom for avoiding to pay corporate tax, claiming it was only doing promotional activity in that jurisdiction and not selling to UK clients. It relied on this position to shield its income derived from the UK from the tax authorities. It also maintains an Ireland office but claimed that it was closing most of its deals in Bermuda. In 2011 alone Google generated a revenue of $18 billion but only paid tax of $16 million to the UK government. The UK tax authorities are saying Google is deliberately misleading the UK. This scenario has implications both for taxation and multi-jurisdictional corporate governance of transnational corporations such as Google, Facebook, and LinkedIn.

Nigeria is gradually becoming more compliant with global trends by the passing into law of various enactments. Other e-commerce law proposals are receiving the attention of our legislators. The Evidence Act as amended 2011 now profiles in Section 84 instances of admissibility of statements in documents produced by computers. Before this time the old Evidence Act enacted in 1945 could not have contemplated this scenario because technology is always in advance of the law. It is reported that a former Aviation minister was able to exploit the lacuna in the law before the amendment to escape liability for alleged financial impropriety charges in one of the cases brought against him. The Nigerian Communications Act 2003(5) enacted after the liberalisation of the telecommunications sector in 2001 laid out the framework for regulation and investments in the industry; which in no small measure has led to a successful ICT regime that is the envy of the entire global investment community.

The Economic and Financial Crimes Act 2004 makes EFCC the coordinating agency for the enforcement of the Advance Fee Fraud and other related offences. Efforts like these and consistent legal advocacy over the years since 2001 have culminated in the promulgation of the cybercrime ACT 2015 by the National Assembly, which criminalises misuse of computers for unauthorised purposes, identity theft, corporate espionage, Financial – Fraud, hacking, spoofing and information theft. Nigerian E-Commerce pioneers such as PAGA.COM, KONGA.COM, JUMIA.COM, V-CONNECT and OLX.COM should be mindful of these new cyber-laws in order to mitigate financial losses in the context of globalisation.

The Judiciary IT Policy contemplates a situation where the justice delivery system is enhanced by modern ICT and Broadband tools that will reduce time in which Nigerians get justice, as well as a robust database of pending and decided cases for preservation and reference. Broadband will enhance access to government held information for use by all citizens to hold government accountable within the legal boundaries of the Freedom of Information ACT 2010(6). Coordination of all MDA activities for better service delivery to all Nigerians will similarly be enhanced by the fruits of Broadband technologies.

Businesses that ignore cyber-laws do this at their own peril. Strategies must be developed to mitigate loses because the Internet is now well within the reach of terrestrial governments. Countries these days are quick to claim jurisdiction over Internet activity even if the infringing website is hosted on another continent. Civil sanctions have been invoked such as injunctions and damages running into billions of dollars. The recent patent wars between APPLE & SAMSUNG which saw the latter incurring damages in excess of $1 billion for infringing the patent of the former is instructive. Also ALIBABA the Chinese E-Commerce giant was recently sued by GUCCI, YSL, PUMA and other fashion brands, alleging that ALIBABA made it possible for shoppers in the United States to order counterfeit goods from its various websites.

There are basically three types of websites: The static – shop window type like a company brochure which simply provides company information will attract such legal issues as copyright Infringement where materials or logos are used without a license from the right owners. The second type is the quasi-dynamic type which encourages visitors to post opinions and discussion in a chat-room with the risk of defamatory, obscene, blasphemous and racially objectionable statements. While the third is the dynamic full e-commerce type where visitors can purchase various goods and services. This creates more complex issues. Goods may be manufactured by the website owner or by third parties trading through the website; who should be imputed with liability if the goods are not fit for purpose? Some products come with government restrictions, for example, sale of pharmaceutical goods, alcohol, financial services and online Art auctions. Therefore, clear information must be provided to visitors reduced to contractual terms, sometimes including the identity of the supplier and payment /delivery arrangements.

• Onikosi is partner, AOCSOLICITORZ Business/ICT Lawyers & Regulatory Consultants, Suite 12, Block 11, Sura Business Place, Ikoyi Lagos. Tel: 234-08037860869 EMAIL:

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