Legal Risk Management in a Global Electronic Marketplace

This article discusses how businesses can manage the risk of cross-border law enforcement in connection to its Internet activities. A website is usually available in several jurisdictions and it is not possible to completely avoid the risk of infringing the law of those jurisdictions. In order to carry out legal risk management, the business needs to understand the risks involved and consider measures to handle the risk of cross-border law enforcement, including geographical delimitation and choice of venue and applicable law. This article focuses on the enforcement of unfair competition law. It is found that 1) activities on the Internet are subject to geographical borders, and it is possible to identify factors that are relevant in assessing where activities on a website are directed, 2) private parties are better able to carry out traditional cross-border law enforcement than public authorities, 3) the freedom to provide goods and services in combination with the 2000 E-Commerce Directive restricts the possibilities of crossborder law enforcement, and 4) businesses can mitigate the risks of cross-border law enforcement by applying geographical delimitation and by entering into agreements on forum and applicable law.