E-commerce Law

In layman terms, e-commerce deals with buying and selling of goods and/ or services via the Internet. The e-commerce industry in Pakistan is still in its initial stages; and hence, there are not many laws that protect or recognize this discipline. In general, e-commerce law deals with online transactions, protects your online data, and regulates terms and conditions related to online privacy. Keep reading if you want to dig in deeper quickly.

 

 

What does e-commerce law deal with?

It deals with protecting your rights and online information related to your e-commerce business ventures. Moreover, it also deals with consumer protection laws pertaining to the development of technology along with its use and distribution.

 

What is the goal of e-commerce law?

E-commerce law aims to protect your online commercial interests by designing, implementing, and/or revising the online marketing strategy of your online business. Moreover, it protects your information and rights and ensures that minimum litigation is required without compromising on the value of your online business.

 

How does Pakistani law protect e-commerce?

Pakistani law primarily protects electronic transactions which include payments via cards, online banking, branchless banking, PSOs (Payment System Operators), and PSPs (Payment System Providers). The existing laws only protect and recognize the following:

  • Online payments and transactions

  • E-signatures

  • Basics of e-commerce

 

Are there any legal requirements for starting an e-business?

In general, there are no legal preconditions for starting an e-business. However, the businessman should decide a few legal matters before stepping into the world of e-commerce which deals with partnerships, registration of the business, buying a domain for the website etc.

 

What other disciplines of law deal with e-commerce in Pakistan?

The following disciplines of law deal with e-commerce in Pakistan:

  • Business law

  • IP (Intellectual Property) laws, such as copyright and trademark etc.

  • Telecom and IT laws

  • Contract law

  • Franchising law

  • Due Diligence

  • Investment law

  • Insolvency law

  • Mergers and Acquisition law

  • Other laws of specific industries and sectors related to online businesses

 

What are some existing statutes that deal with e-commerce in Pakistan?

The following statutes specifically deal with e-commerce in Pakistan:

  • Payment Systems and Electronic Fund Transfers Act, 2007 (PSEFT 2007): It deals with PSOs and PSPs

  • Electronic Transactions Ordinance, 2002 (ETO 2002): It was the first ever legislation in Pakistan to recognize electronic documents, information, records, signatures, transactions, and communications.

  • Pakistan Electronic Crimes Act, 2016: This Act defines the offences related to e-commerce and the punishments of committing those offences. 

  • Imports and Exports (Control) Act, 1950: It deals with trade across the borders along with export and import policies.

  • Customs Act, 1969: This Act deals with the collection of custom duties. 

  • The Prevention of Electronic Crimes Ordinance, 2007: It deals with online crime and frauds.

  • The Pakistan Telecommunication (Re-Organization) Act, 1996: This Act deals with IT and telecommunication and all the disputes related to it.

  • Various SBP policies: These policies deal with receipt and remission of payments along with regulations related to electronic money, branchless banking, payment cards, secure internet banking, and cyber security.

 

What is the scope of the Payment Systems and Electronic Fund Transfers Act, 2007 (PSEFT 2007) regarding e-commerce?

This Act provides a framework for the transfer of electronic funds and payments. It deals with the money transferred through ATMs, electronic terminals, computers, telephone instrument, magnetic medium, or through any other electronic devices. As e-commerce deals with e-transactions so, an act recognizing these means and mechanisms helps in protecting the rights of both parties involved in the e-business, such as the businessmen and the consumers.

 

What is the scope of the Pakistan Electronic Crimes Act, 2016 regarding e-commerce?

This Act ensures the prevention of electronic crimes which include violation and misuse of confidentiality, data, integrity, systems, and networks. Moreover, this Act provides means and mechanisms for investigation and punishments of such violations. Furthermore, this Act deals with the following aspects, which are also heavily related to e-commerce:

  • Criminal access to data

  • Data damage

  • Electronic fraud

  • Misuse of electronic system

  • Misusing encryption

  • Spoofing and spamming

  • Releasing malicious code

  • Electronic forgery

  • Unauthorized interception

  • Cyber stalking and terrorism

 

What is the scope of the Electronic Transactions Ordinance, 2002 (ETO 2002) regarding e-commerce?

The Electronic Transactions Ordinance, 2002 recognized records, documents, information, transactions, and communications that were in electronic form. The field of e-commerce heavily deals with electronic documents, transactions, information, records, and communication. Hence, without this Act, resolving e-commerce disputes would have been hard if not impossible. Moreover, the rights and duties of people in e-commerce would not have been protected and recognized, respectively.

 

What is a privacy agreement? How important is it?

A privacy agreement is a very important part of e-commerce as it elaborates the manner and mode of collection and use of a customer’s personal information. It protects the business against legal actions conducted by the customers.

What is a “terms of use” agreement?

The “terms of use” agreement notifies the visitors on the website about the copyright and conditions in which their account shall be suspended or terminated. It protects the business against legal actions conducted by the customers.

How will an attorney help me with my e-business?

A lawyer will help you swiftly deal with the following important aspects of e-commerce which if not dealt with care can result in severe disputes.

  • Drafting, reviewing and negotiating contracts

    • Website development agreements

    • Privacy policy contract

    • Terms and conditions of using the website

    • Collaboration and licensing contracts

    • IT procurement contract

    • Outsourcing agreement

    • App and/or software development agreements

  • Data Protection and Privacy issues

  • Protection of Consumers

    • Affordability issues

    • Product variety issues

    • Online Identity Theft

    • Misrepresentation of product

  • Matters relating to Advertisements

  • Protection of Intellectual Property

  • Legal Compliance of Website

    • Legal audit

    • Legal review

  • Dispute Resolution Mechanisms

Caution: 

Information contained in the above FAQs is for general understanding purposes only and may have altered or have become incorrect owing to variation in factual aspects and evolving laws, therefore, should not be treated as an alternate to professional legal advice.