1. E-Business Law in Malaysia
SME Workshop – IIUM/SME Corp
Dr. Sonny Zulhuda
Ahmad Ibrahim Kulliyyah of Laws
International Islamic University Malaysia

2. Outline
• What is e-Business?
• Why e-Business?
• Web-based Business
• Consumer Issues
• Identity Theft
• What Law Says
• Setting up Your e-Business
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3. What is E-Business?
• Electronic Business:
Business/Commerce + Electronic
Processing
• Electronic processing: use,
storage, transmission or
representation of electronic data,
including text, sounds and visual
images.
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4. What is E-Business?
• E-Business is not about a new type of business, but a new
method of business
• So e-business is a new option for business people and
enterprises to trade, market, sell and offer their old or
existing products and services, e.g.:
– Selling books online
– Selling phones online
• With this new method, new products and services also
emerge with the growth of innovation and technologies, e.g.:
– Web design service
– Selling ring tones for mobile phones
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5. „Business relationship‟
Include matters arising from all relationships of a commercial
nature, whether contractual or not.
EXPLOITATION JOINT VENTURE
DISTRIBUTION
AGREEMENT OR & OTHERS
AGREEMENT
CONCESSION
COMMERCIAL
INSURANCE
REPRESENTATION
OR AGENCY
COMMERCIAL RELATIONSHIP
INVESTMENT,
FINANCING, CONSTRUCTION FACTORING,
BANKING OF WORKS LEASING
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6. Why E-Business?
 Worldwide access and greater choice
 Enhanced competitiveness and quality of
service
 Customization and personalized
products
 Elimination of intermediaries
 Greater efficiency and lower costs
 New business opportunities and new
products and services
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7. Facts and Figures
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9. Shapes of E-Commerce
E-GOVERNMENT
Government
Individuals Business
E-BUSINESS
E-EVERYTHING E-CORPORATIONS
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10. Consumer Concerns
• Concern over the Product/service: lack of
information, safety, originality, legality, halal, etc.
• Insecure payment methods
• Loss of personal privacy – Risk of misuse of
personal information, e.g. use of Cookies; opt-in
or opt-out
• Cyber crimes: Computer fraud, hacking, virus,
phishing, etc.
• Sharing of Liability  to avoid BLAME GAME!
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11. Types of E-Commerce Websites
• Informational
• Interactive
• Transactional
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12. Consumers-friendly
Commercial Websites
• Information about business; e.g. information on the company
including its legal name, its principal geographic address, a
telephone number, an e-mail address for questions related to sales
and service, credentials, etc.
• Information about goods and services, e.g. specifications, terms of
use, sample pictures, etc.
• Information about transactions, e.g. costs, currency, payment
process, delivery terms, warranties, confirmation process.
• Effective communication, e.g. language, timing, records
maintenance.
(Guidelines by the OECD)
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13. Some Practices of E-Business
• Online employment agency services
– E.g. www.jobstreet.com
• Online bookshops
– E.g. www.amazon.com
• Online auctions
– E.g. www.lelong.com.my, www.e-bay.com
• Online banking
– E.g. www.maybank2u.com.my
• Online travel services
– E.g. www.airasia.com
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14. Online Employment Services
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15. Online Bookshops
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16. Online Auction
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17. Online Banking
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18. Online Travel Services
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19. Identity Theft

20. What is Identity Theft?
• “Identity”
– Ie. personal credentials (name, IC#, Passport#,
address, contact#, medical records, financial records,
credit worthiness, designation, brand name…)
• “Theft”?
– It seeks to include any form of
misappropriation/abuse, not specifically a stealing.
– Thus may include fraud, trespass, impersonation, etc.
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21. Incidents of ID Theft
• In the US, nearly 10 million Americans fell
victim of ID theft each year;
• In 2003, FTC reported that ID theft alone
costs nearly US$48 billion as annual costs for
the businesses and an additional 5 bil per
year for consumers;
• In the UK, the ICO has reported over 277
breaches of significant volume since the His
Majesty Revenue & Customs (HMRC) breach
in November 2007;
• MyCert of Malaysia reported in 2008 that
Internet-related fraud dominates the security
incidents attack.Zulhuda
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22. Top 5 ways youth‟s identities
are stolen
Qwest Communications Teen Council Program
1. Posting their real name, address, date of birth and school
on social networking sites;
2. Talking with strangers through their social networking
page -- and in some cases meeting in person
3. Divulging social security numbers (like IC No.) on online
job applications
4. Unable to recognize "phishing" emails
5. Storing personal information like their social security
number and passwords in cell phones
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23. Essential#1
Be moderate in your Social Networking
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24. Do‟s dan Don‟ts of Social
Networking
• Be Moderate
• Define your „friends‟
• Make use of privacy setting tools
• Think twice or thrice before posting
• Mind the existing rules: legal and
ethical
• Social networking or Social not-
working?
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25. Essential#2
Beware of PHISHING e-mails
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26. Phishing  Fishing
• Phishing identities can go through phone,
sms, video or e-mails.
• Phishing e-mails commonly involve the lure,
the hook and the catch
– The lure: a phisher who emails a large number
of users with a message that appears to be
from some legitimate institution.
– The hook: a website that mimics the
appearance of a legitimate target institution.
– The catch: the making use of the collected
information for fraud, forgery or theft.
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27. Some “Social Engineering” Methods
• Winning a prize, lottery, gift, year-end bonus, etc.;
• Business opportunities, investment, joint capital
venture;
• Romantic engagement, date, social relationship;
• Security alert, password change, non-active online
account;
• Administrative works, database upgrading, status
update;
• Emergency nature, lost and found, criminal victims;
• Personal problems, health, sex drugs, etc.
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28. The Legal Framework
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29. LEGAL FRAMEWORK FOR E-BUSINESS
• E-Commerce Act • Computer
2006 Crimes Act 1997
• Evidence Act • Penal Code
1950 • Comm &
Multimedia Act
1998
Admissibility &
Criminalisation of
Enforceability of E-
Abuse
transaction
Data Privacy & Consumer
Security Protection
• Personal Data • Consumer
Protection Act Protection Act
2010 1999
• Sale of Goods
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30. E-commerce is based on Contract
Online banking
Online book purchase
Online movie ticketing
Based on What type of
Online marketing contract law contract??
Online flight booking
Online investment
Online auction
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31. E-transaction Law in Malaysia
• In 2006, Malaysian parliament passed the Electronic
Commerce Act (ECA) 2006 that:
– Provides for legal recognition of electronic messages in
commercial transactions
– Provides for the use of e-messages to fulfill legal requirements
– Enables and facilitates commercial transactions through the use
of electronic means
• This law adopted international guidelines by the
UNCITRAL (a commission under the UN)
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32. Legal issues addressed by
the ECA 2006
• The admissibility of electronic
message
• The legality of paperless document
• The requirement of signature
• The originality of document
• Formation of e-contract: Offer and
Acceptance
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33. Formation and validity of contracts
• In e-contract, an offer and the acceptance of an offer may
be expressed by means of data messages.
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34. Non-applicability of ECA 2006
• Power of Attorney
• The creation of wills and codicils
• The creation of trusts
• Negotiable instruments
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35. How to start your own e-Business?
• Set up a website:
– Social networking page
– Free blog
– Paid blog
– Full website/portal
• Consider:
– Your need?
– Practicality& Affordability
– Risks
– Control
– Regulation
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36. Following up…
• Introduce yourself
• Introduce your products/services
• Explain your terms and conditions
• Introduce your business process
– Queries
– Purchasing order
– Transaction & payment
– Delivery
– After-sales?
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37. Exercise:
Terms and Conditions of e-Business
• Visit the selected e-commerce website and assess their
compliance to the legal rules and best practices that you
know, in terms of:
a) Identity of the vendor and the products
b) Privacy and security
c) Consumer protection
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38. Exercise:
Terms and Conditions of e-Business
• Choose from the following web:
– www.mudah.my
– www.lelong.com.my
– www.myeg.com.my
– www.airasia.com
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39. THE END
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