114a evidence act

Bread & Kaya: How the ‘new’ Sedition Act affects netizens

Bread & Kaya: How the ‘new’ Sedition Act affects netizens
By Foong Cheng Leong
Apr 08, 2015

– As with Section 114A, website hosts and FB page owners can be held liable
– Particularly thorny are comments left by others on your portal

BY the time you read this article, the Sedition (Amendment) Bill 2015 – which seeks to amend the Sedition Act 1948 – will be debated in Parliament. The Bill is now published on the Parliament of Malaysia’s website. Click here to download a copy.

The Najib Administration is seeking to update the 1948 Act to now cover electronic publications, and this article will focus on how these amendments may affect the netizens of Malaysia, and website operators in particular.

The purpose of introducing the amendments is stated in the Explanatory Statement of the Bill.

On the eve of Malaysia Day 2011, Malaysian Prime Minister Najib Razak pledged watershed changes to enhance the parliamentary democracy system in Malaysia. This pledge was reiterated in July 2012 and a decision was made to repeal the Sedition Act 1948.

“However, events since that date have demonstrated the continued relevance of the Sedition Act 1948 in tandem with recognition for the need for enhanced safeguards against its misuse to stem legitimate criticism of Government and discussion of issues of concern to Malaysians,” the explanatory statement reads.

“Among the issues of concern are the increasingly harmful and malicious comments, postings and publications that jeopardise that most valued ideals of Malaysia – tolerance and racial and religious harmony in a multiracial, multireligious and multicultural nation.

“Even more alarming are calls for the secession of States in the Federation of Malaysia established by the consensus of the peoples of Malaysia and unwarranted attacks against the sovereign institutions of Malaysia, the Yang di-Pertuan Agong and the Rulers of the States.

“It is against this background that the Government has decided to retain the Sedition Act 1948 (‘Act 15’) at this time with the addition of enhanced measures and penalties to deal with the threats against peace, public order and the security of Malaysia, in particular through the irresponsible misuse of social media platforms and other communication devices to spread divisiveness and to insult the race, religion, culture, etc. of particular groups of Malaysians without regard for the consequences,” it says.

The definition of seditious tendency will be amended. It will no longer be seditious to “bring into hatred or contempt or to excite disaffection against any Government, administration of Justice (our Courts).

It will be seditious to excite the secession of a State from Malaysia. It is seditious to insult our Rulers, and to promote feelings of ill will and hostility between different races or classes of the population of Malaysia and, with the new amendments, between persons or groups of persons on the grounds of religion.

The Sedition (Amendment) Bill 2015 creates liability to website operators (I use this term loosely as the Bill uses the words ‘any person’ and thus may include owner, host, editor and subeditor) such as online forums, online news portals, and even Facebook Page/ Group owners.

Sections 3 and 4 of the Bill introduce the words “caused to be published.” Under the newly amended Section 4(1)(c) of the Sedition Act 1948, a person who, among others, publishes or caused to be published any seditious publication is guilty of an offence.

The punishment is now “a term not less than three years but not exceeding seven years.” Previously, it was not exceeding three years and a fine.

So what does “caused to be published” here mean? It seems to cover a website operator who allows a comment to be published on his website (especially in the case where comments are moderated). This also covers a comment or a posting published on a Facebook page.

Further, pursuant to Section 114A of the Evidence Act 1950, the owner, host, administrator, editor or a subeditor of the website is the publisher of that comment – notwithstanding that such person is not the author of such a comment (unless the contrary is proven).

If the offence involves a publication of a seditious comment under the new Section 4(1A) – that is, published or ‘caused to be published’ any seditious comments which caused bodily injury or damage to property – the Public Prosecutor has a right not to allow bail. Such a person will languish in jail until his trial is over.

Further, the new Section 10(5) of the Sedition Act 1948 compels a person who knowingly has in his possession, power or control a prohibited publication by electronic means, shall remove or cause to be removed, such publication – failing which he shall be liable to a fine not exceeding RM500,000 (US$137,000) or imprisonment not exceeding three years, or both.

However, there are exceptions for a website operator if he can prove that the seditious publication was done:

– Without his authority, consent and knowledge and without any want of due care or caution on his part, or
– That he did not know and had no reasonable grounds to believe that the publication had a seditious tendency.

The first exception will not be applicable to a website operator who moderates comments because publication of a comment was done by his authority, consent and knowledge when he approved the comment.

It would however be applicable to an unmoderated website but such an operator must show that due care and caution had been taken.

Nevertheless, the second exception above will be of assistance to a website operator who moderates comments. However, it is difficult to determine what amounts to seditious nowadays (we need a compendium of sedition statements!).

A Sessions Court Judge, on the application by the Public Prosecutor, can make an order to prohibit the making or circulation of certain sedition publications (that are likely to lead to bodily injury, damage to property, promote feelings of ill will, etc., as per the new Section 10(1)).

Any person making or circulating the prohibited publication shall remove or caused to be removed that publication, or be prohibited from accessing any electronic device.

Any person who fails to do so shall be guilty to a fine not exceeding RM500,000 or to imprisonment not exceeding three years, or both.

If the person making or circulating the seditious publication by electronic means cannot be identified, a Sessions Court Judge can direct that such publication be blocked (under the new Section 10A).

[Note: This article is subject to amendments in the event that there are new facts or clarifications from the First Meeting of the Third Session of the 13th Parliament (2015)].



First published on Digital News Asia on 8 April 2015.

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Bread & Kaya: Malaysian cyberlaw cases in 2014

2014 was another interesting year in cyberspace for Malaysia’s legal fraternity. Numerous sedition investigations and charges were made against statements made online and offline.

Notably, Twitter user @wonghoicheng was charged under Section 504 of the Penal Code and Section 233 of the Communications and Multimedia Act 1998 for “deliberately humiliating and provoking” Inspector-General of Police (IGP) Khalid Abu Bakar on Twitter by likening him to Nazi military commander Heinrich Himmler.

Our courts were also flooded with interesting cyberlaw cases dealing with various issues.

Tracing a person online and 114A

In Tong Seak Kan & Anor v Loke Ah Kin & Anor [2014] 6 CLJ 904, the Plaintiffs initiated an action for cyberspace defamation against the 1st Defendant.

In tracing the perpetrator, who had posted defamatory statements on two Google Blogspot websites, the Plaintiffs filed an action called a John Doe action in the Superior Court of California.

In compliance with the court order, Google traced the blogs to two IP (Internet Protocol) addresses which were revealed by Telekom Malaysia Bhd to be IP addresses belonging to the 1st Defendant’s account.

In the same case, the High Court had held that the controversial Section 114A (2) of the Evidence Act 1950 applied retrospectively. (However, the criminal case of PP v Rutinin Bin Suhaimin [Criminal Case No K42-60-2010] states it doesn’t apply retrospectively).

Section 114A (2) provides that the burden of proof lies on the subscriber of an ISP (Internet service provider) to prove that a certain statement was not published by him or her.

The 1st Defendant failed to convince the Court that Section 114A (2) does not apply because the defamatory statements were published before the enforcement date of Section 114A(2).

The Court held that the 1st Defendant had failed to prove that he was not the publisher of the content. The 1st Defendant is now liable for a payment of RM600,000 as damages to the Plaintiffs.

Speaking about 114A, the said section was applied in a few other cases in 2014.

In YB Dato Haji Husam bin HJ Musa v Mohd Faisal bin Rohban Ahmad (Court of Appeal Civil Appeal No D-02-1859-08/2012), the Defendant denied that he was the writer of a defamatory article and the High Court held that there was insufficient evidence to prove so.

The Court of Appeal held that the learned High Court Judge ought to have applied Section 114A and in the present case, the Defendant failed to rebut the presumption in Section 114A.

The Court of Appeal held that as a general rule, once the elements of defamation are satisfied, liability is attached and the defendant’s defence cannot survive on mere denial, and when it relates to cybercrime, Section 114A will assist the plaintiff to force the defendant to exonerate himself from liability.

In Stemlife Berhad v Mead Johnson Nutrian (Malaysia) Sdn Bhd [2013] 1 LNS 1446, the High Court held that Mead Johnson was liable for the defamatory postings made by users of Mead Johnson’s Internet forum and website.

The Court, in applying Section 114A, stated that the introduction of Section 114A is the Malaysian legislature’s response to address, amongst others, the issue of anonymity on the Internet to ensure users do not exploit the anonymity that the Internet can provide to escape the consequences of their actions.

In the present case, the Court held that the Defendants failed to rebut the presumptions cast by Section 114A.

Facebook defamation

There were numerous Facebook defamation cases. In Amber Court Management Corporation & Ors v Hong Gan Gui & Anor [2014] 1 LNS 1384, the management corporation of Amber Court Condominium and its council members sued two unit owners of the condominium for allegedly defaming them on Facebook.

The High Court struck out the case after finding that a management corporation has no powers to do so under the Strata Titles Act 1985 and common law.

Salleh Berindi Bin Hj Othman, who had earlier sued his colleagues for Facebook defamation, lost another Facebook defamation case (Salleh Berindi Bin Hj Othman v Professors Madya Dr Abdul Hamid Ahmad & Ors [2014] 1 LNS 1611) in the High Court.

He alleged that the postings made by the Defendants on the 2nd Defendant’s Facebook wall were defamatory of him. The High Court did not agree with him.

In Foo Hiap Siong v Chong Chin Hsiang [2014] 1 LNS 1196, the Plaintiff sued the Defendant, complaining about the following defamatory statement posted by the Defendant, in the said two Facebook forums named ‘Rakyat Ingin Jadi Bos’ and ‘Ubahkan Politik,’ showing an doctored coloured photograph of the Plaintiff’s face, depicting him with long hair with the top half of a naked body dressed in a bra with certain defamatory comments in Mandarin.

The High Court held in favour of the Plaintiff and with cost of RM20,000 and further awarded general damages, aggravated damages and exemplary damages to the total sum of RM50,000.

In an action against the Defendant for publishing defamatory statements through emails (Mox-Linde Gases Sdn Bhd & Anor v Wong Siew Yap (Shah Alam High Court Civil Suit No 22-1514-2010), the High Court applied the principle of presumed publication on emails.

The court held that there is a legal presumption that emails are published on being sent without actual proof that anyone did in fact read them.

Under defamation law, a defamatory statement must be published in order to have an actionable cause of action. Using this presumed publication, it is not necessary to prove someone has read the defamatory statement.

Such a legal principle was applied to materials sent in post such as telegram and postcards. It seems that the court had expended this presumption to email, notwithstanding that emails do sometimes get diverted into the Spam folder or get rejected by the recipient server.

Others

In Dato’ Ibrahim Ali v. Datuk Seri Anwar Ibrahim [2015] 1 CLJ 176, the Court dealt with the liability of an office bearer of an association with respect to contempt of court.

In 2013, president of Malay right-wing group Perkasa, Ibrahim Ali, was jailed for a day and fined by the High Court for contempt of court over a posting on the website http:www.pribumiperkasa.com/ made by one Zainuddin bin Salleh, a member of Perkasa.

The posting is said to be outright contemptuous of the court. The High Court held that Ibrahim Ali was liable for the posting made by Zainuddin on that website by virtue of his position as president of Perkasa.

In the appeal before the Court of Appeal, Ibrahim claimed that the posting was made on a website which is not the official website of Perkasa. He also claimed that he is not liable for the posting because he had no actual knowledge and had no control as to the so-called offence.

The Court of Appeal dismissed the first ground but agreed with Ibrahim on the second ground and overturned the conviction.

Sex bloggers ‘Alvivi’ (Alvin Tan Jye Yee and Vivian Lee May Ling) were freed from the charge under Section 298A of the Penal Code (Tan Jye Lee & Anor v PP [2014] 1 LNS 860) for posting their controversial ‘Hari Raya Greeting’ which contained the couple’s photograph enjoying the Chinese pork dish Bah Kut Teh with the ‘Halal’ logo with, among others, the words ‘Selamat Berbuka Puasa (dengan Bah Kut Teh … wangi, enak, menyelerakan!!!…’

The post had allegedly created enmity between persons of different religions under Section 298A of the Penal Code. The Court of Appeal, in striking out the charge under Section 298A of the Penal Code, held that the said section had already been declared invalid by the Federal Court in another case.

The dispute over the use of the word ‘Allah’ in the Herald – The Catholic Weekly had an interesting point over the use of Internet research by judges.

In 2013, the Court of Appeal, in deciding to overturn the High Court’s decision allowing the of the word ‘Allah,’ conducted its own research via the Internet and relied on the information and points obtained therefrom to substantiate its judgments (see Menteri Dalam Negeri & Ors v. Titular Roman Catholic Archbishop Of Kuala Lumpur [2013] 8 CLJ 890 on Pages 959-960).

Upon the overturn of the appeal, the Titular Roman Catholic Archbishop of Kuala Lumpur (see Titular Roman Catholic Archbishop Of Kuala Lumpur v. Menteri Dalam Negeri & Ors [2014] 6 CLJ 541) filed an application for leave to appeal to the Federal Court (permission is required before one can appeal to the Federal Court and it must satisfy certain thresholds). The Federal Court however refused to grant leave.

The majority judgement by the Chief Justice of Malaya (Arifin Zakaria, on Page 584) held that those views obtained from the Internet were merely obiter (said in passing – not binding but persuasive) whereas Chief Justice of Sabah and Sarawak Richard Malanjum held that leave ought to be granted as the suo moto (on its own motion) research sets a precedent binding on the lower courts yet untested before the Federal Court, and also that the Court of Appeal relied upon the materials gathered suo moto from the Internet in upholding the impugned decision (on Page 617).

It seems that the Federal Court did not endorse such suo moto research by the Court of Appeal Judges.

Closing

Last year, I wrote a ‘wishlist’ of laws to be introduced to govern or deal with cyberspace issues. Out of the five proposed laws, two of them may be potentially addressed with the proposed anti-harassment law.

I understand that the drafting of this anti-harassment law is at its infancy stage and may not be introduced so soon.

Singapore’s Protection from Harassment Act 2014 came into effect on Nov 15 2014. It was reported that Singapore blogger Xiaxue is the first person or one of the first persons who had obtained a protection order under this law against online satire site SMRT Ltd (Feedback) for trolling her online.


First published on Digital News Asia on 17 March 2015.

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BFM Podcast: Sedition, Porn and Torrents

I was interviewed by BFM Radio to talk about the regulation of social media space in Malaysia on 17 February 2015.


The Inspector General of Police Tan Sri Khalid Abu Bakar recently cautioned Malaysians to be mindful of what they post on social media platforms like twitter in order not to get on the wrong side of the law. Foong Cheng Leong, a lawyer who specializes on internet law, discusses how the social media space is regulated in Malaysia, the limits to freedom of speech on the internet, and our government’s position on the net neutrality debate.

Your browser does not support native audio, but you can download this MP3 to listen on your device.

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Netizens v the Government

2012 saw the intensified battle between netizens and the authorities. The former desires protection of their right to freedom of expression and anonymity whereas the latter desires control and governance. Through this battle, the authorities introduced many new legislations to govern the use of internet.

In July 2012, the Malaysian Government enforced s. 114A of the Evidence Act 1950 (114A). Under 114A, a person is deemed to be a publisher of a content if it originates from his or her website, registered networks or data processing device of an internet user unless he or she proves the contrary. This new law sparked a massive online protest dubbed the Malaysia Internet Black Out Day or also the Stop114A. Protesters replaced their Facebook and Twitter profile picture with the Stop114A banner whereas website operators displayed the Stop114A banner on their websites. Within two days, the Stop114A Facebook gained 43,000 likes from 400 likes (currently 49,000). It is probably one of Malaysia’s most successful online campaigns.

On the business side, the Association of the Computer and Multimedia Industry of Malaysia (Pikom), who represents the information and communications technology (ICT) industry in Malaysia, backed calls for a review of 114A whereas the Federation of Malaysian Manufacturers (FMM) has expressed concerns over the recent inclusion of 114A and its impact on businesses.

Interestingly, the Malaysian Government passed the Cyber Centre and Cyber Cafe (Federal Territory of Kuala Lumpur) Rules 2012 and Consumer Protection (Electronic Trade Transactions) Regulations 2012. The former requires any person operating a cybercafé and cyber centre to maintain a customer entry record and a record of computer usage for each computer whereas the latter requires online business owners and operators to provide their full details, terms of conditions of sale, rectification of errors and maintenance of records.

Philippines netizens also protested against their newly introduced cyberlaw. In October 2012, Philippines passed the Cybercrime Prevention Act of 2012 with the aim to prevent cybersex, online child pornography, identity theft and spamming. However, under the new act, a person found guilty of libellous comments online, including comments made on social networks such as Facebook and Twitter or blogs, could be fined or jailed. In protest against the new law, anonymous activists hacked into government websites, journalists have held rallies and many Facebook users have replaced their profile picture with a black screen. Protesters say the new law could be used to target government critics and crack down on freedom of speech.

Japan netizens on the other hand had milder protest against a new law that makes Japan-based internet users who download copyright infringing files. Violators will face up to two years in prison or fines of up to two million yen. In July 2012, about 80 masked people, calling themselves allies of the global hacker group Anonymous, picked up litter in Tokyo Saturday as a sign of protest.

In early 2012, China required users of the popular microblogging platform, Weibo, to register their real names. Subsequently, later in the year, China legalized the deletion of posts or pages which are deemed to contain “illegal” information and required service providers to hand over such information to the authorities for punishment.

On a brighter note, the South Korean Constitutional Court ruled that a law requiring South Koreans to use their real names on Internet forums was unconstitutional. The Court said that the requirement amounts to prior censorship and violated citizens’ privacy.

In the United States, a handful of US states, including Illinois, California and Maryland, passed laws making it illegal for employers to ask for potential employees’ Facebook or other social media passwords.

A person who retweets a defamatory tweet is potentially liable for defamation. In the UK, Lord McAlpine (Robert Alistair McAlpine) a former politician who worked for Margaret Thatcher, announced his intention to pursue action against 10,000 Twitter users for defamation including those who had retweeted the defamatory tweets. In this case, Lord Alphine was linked by some social media users after BBC News reported that a senior politician was involved child sex abuse. Interestingly, these users may apologize to Lord McAlphine by completing a form downloadable from his solicitors’ website!

In the UK, it is an offence to publish the identity of victims of certain offences which include rape. Footballer Ched Evans was convicted by the Court for rape of a 19 years old woman. The woman’s name was circulated on social networking sites, including Twitter and Facebook, after Evans’ conviction. 9 people were fined after admitting to revealing online the identity of the woman.

Meanwhile back home, the Kota Kinabalu High Court overturned Rutinin Bin Suhaimin’s acquittal for posting an “annoying” comment on the Sultan of Perak’s website. Rutinin was charged under s. 233 of the Communications and Multimedia Act 1998. The Sessions Court had earlier acquitted him without calling for his defence because, among others, the prosecution failed to prove that Rutinin was the person who posted the insulting comment. The Court held that, although 114A of the Evidence Act 1950 is not applicable because the alleged offending act was committed before the enforcement date of 114A, the circumstantial evidence is sufficiently strong to conclude that the accused had used the internet account that was registered in his name at the material time.

The developments in 2012 show the involvement of the authorities in clamping down the notion of the Internet being the Wild, Wild West. However, such clap down must be monitored by netizens.

In December 2012, the International Telecommunication Union (ITU) brought together regulators from around the world to re-negotiate a decades-old communications treaty. Google and 1000 over organizations around the world claimed that some governments want to use the closed-door meeting to increase censorship and regulate the Internet and had started an online campaign.

At the end of the closed-door meeting, 89 countries including Malaysia signed the treaty, while 55 countries said they would not sign or that additional review was needed.

With the new technology, websites and novel functions, all Governments will have to step out their game to protect the rights of netizens and businesses. New laws must not be onerous but in the same time protect victims of cybercrimes and preserve the right of freedom of expression.



This article was supposed to be published in the Putik Lada of The Star Newspaper. It was also supposed to be the 2013 installation of my yearly social media update articles. Unfortunately, The Star Newspaper discontinued the Putik Lada column before my article could be published.

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GE13 Candidates and 114A

Published on LoyarBurok on 16 April 2013.



I am no expert in election laws but GE13 Candidates should take note of this. If you are running a blog, I suggest you moderate or close the comments section until and after the 13th General Election.

The reason why I say so is because s.114A(1) of the Evidence Act 1950 and the Election Offences Act 1954. S. 114A(1) provide the following:

“A person whose name, photograph or pseudonym appears on any publication depicting himself as the owner, host, administrator, editor or sub-editor, or who in any manner facilitates to publish or re-publish the publication is presumed to have published or re-published the contents of the publication unless the contrary is proved”.
In simple words, if your name, photograph or pseudonym appears on any publication depicting yourself as the aforesaid persons, you are deemed to have published the content unless you prove otherwise.

Also, if you have in any manner facilitated to publish or re-publish the publication, you are presumed to have published the content of the publication.

This means that website owners are deemed to be publishers of contents of a publication although the author of the publication is someone else.

Further, it is not possible for website owner to prove that he is not a publisher due to the wording of the section i.e. the words “in any manner facilitates to publish or re-publish the publication”. By providing a virtual platform, the website owners facilitate to publish or re-publish a publication.

In this regard, you will potentially commit an election offence if someone posts a comment which falls within the scope of corrupt practice. If found guilty of an election offence, the election of a candidate will be declared void (s. 32 of the Election Offences Act 1954).

What I have mentioned is not without basis. A similar scenario had happened after the 12th General Elections. In Kho Whai Phiaw v Chong Chieng Jen (Election Petition No.: 26-01-2008-I), an elector in the Bandar Kuching constituency presented an election petition to have Mr. Chong Chieng Jen’s (representative of the Democratic Action Party (DAP)) election declared void.

The elector sought to have Mr Chong’s election avoided on the ground that the latter had engaged in the corrupt practice of (i) undue influence and (ii) bribery, to procure his victory in the election. The elector alleged, among others, that a letter from one Mr Smith published on the comment section of Mr Chong’s blog site is said to contain certain threatening statement. The elector alleged that Mr Chong had exercised undue influence over the non-Muslim voters in the Bandar Kuching constituency through Mr Smith’s letter appearing on his blog site.

Fortunately for Mr Chong, the High Court held that Mr Smith’s letter was posted by one commentor by the name “Responsible Christian Voter” (‘RCV’). Mr. Smith was the author of the letter and it was RCV who published that letter through Mr Chong’s blog site. The Court held that Mr Chong is therefore not the publisher of the letter. The case is later upheld by the Federal Court. (see Kho Whai Phiaw v Chong Chieng Jen [2009] 3 CLJ 201)

But Mr Chong’s case is pre-114A case. If s. 114A applies, Mr Chong is considered as the publisher of the letter as his blogsite had facilitated the publication of the letter. Mr Chong could potentially commit an election offence if 114A applies. That is the effect of 114A. It creates liability on a virtual platform provider.

This, of course, is not tested in our Courts yet. One may argue that it is the blogsite provider (e.g. Google who owns Blogger.com) but this is only provided that such blog is hosted by such blogsite provider.

Nevertheless, as an abundance of caution, GE13 candidates should close their blog comments section to avoid such actions. Interestingly, Mr Chong’s blogsite has closed its comments section.

A Facebook Page is also another concern. It may be arguable to say postings made by users on a Facebook page is not published by the Facebook page administrator as it appears on a separate page. (Illustrated below).

However, Facebook comments appearing together with the postings by the Facebook administrator (illustrated below) is different. It is arguable that such comments are published by the Facebook page owner.

With this risk of having an election declared void, I hope that the new Parliament will relook into 114A when it convenes in the future.

It’s time to #stop114A.

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Bread & Kaya: Attention e-commerce businesses: Fraud, the law and you

My Bread & Kaya’s second column was published on Digital News Asia on 29 January 2013.


Attention e-commerce businesses: Fraud, the law and you
Jan 29, 2013

– A new law to protect users of online trading portals goes into effect July 1
– While it may cost them a bit, operators of such businesses will have to comply

Bread & Kaya by Foong Cheng Leong

E-COMMERCE is booming in Malaysia. Euromonitor International estimated that Internet retailing in Malaysia reached RM842 million (US$268.3 million) in 2011; Goldman Sachs forecasts that e-commerce in Malaysia is projected to hit RM3.4 billion (US$1.1 billion) this year with a 30% year-on-year growth.

Notwithstanding such growth, online fraud is rampant in Malaysia. If you scour our online auction or listing websites, you’ll find many dodgy sellers and buyers selling or offering to buy products and services.

But the long arm of the law recently caught Mohd Yunus Jan Muhammad for approaching six victims who had advertised to sell their gadgets through an Internet trading portal, by posing as a customer and setting up appointments. At these meetings, he would grab the merchandise and flee. He was sentenced to one year’s jail. The Court also fined and imposed a whipping on Mohd Yunud.

Sometime in 2011, the Ministry of Domestic Trade, Co-operatives and Consumerism proposed that the Electronic Commerce Act 2006, an act that regulates online commercial transactions, be amended to regulate the online market place industry. I am told that consultation was held with the industry and I understand that some industry players had taken steps to lobby against the amendment.

In April 2012, its minister Datuk Seri Ismail Sabri Yaakob announced that the amendment would ensure that electronic transactions could be done in a safer and secured environment.

The law came about in the form of the Consumer Protection (Electronic Trade Transactions) Regulations 2012 (“Regulation“), a regulation under the Consumer Protection Act 1999.

The Regulation will be in force on July 1, 2013. Under this Regulation, an online marketplace operator is required to, among others, provide their full details, terms of conditions of sale, rectification of errors and maintenance of records.

The new law applies to two (2) types of persons namely:

– A person who operates a business for the purpose of supply of goods or services through a website or in an online marketplace (“Online Business Owner“). “Online marketplace” means a website where goods or services are marketed by third parties for the purpose of trade. This may include your typical blog shops and sellers with accounts with eBay, Lelong and Mudah online stores.

– A person who provides an online marketplace (“>Online Marketplace Operator“). This may include group buying websites operators such as GroupOn, auction and listing websites such as eBay, Lelong and Mudah, and online shopping websites where third party products as sold such as Zalora.

Online business owners

Under the Regulation, Online Business Owners shall disclose on the website where the business is conducted and the following information, failing which the operator commits an offence.

  • The name of the person who operates a business for the purpose of supply of goods or services through a website or in an online marketplace, or the name of the business, or the name of the company.
  1. The registration number of the business or company, if applicable.
  2. The e-mail address and telephone number, or address of the person who operates a business for the purpose of supply of goods or services through a website or in an online marketplace.
  3. A description of the main characteristics of the goods or services.
  4. The full price of the goods or services including transportation costs, taxes and any other costs.
  5. The method of payment.
  6. The terms and conditions.
  7. The estimated time of delivery of the goods or services to the buyer.

Any person who discloses or provides the above information that he knows or has reason to believe is false or misleading, commits an offence.

Online Business Owners shall also:

  • – provide the appropriate means to enable the buyer to rectify any errors prior to the confirmation of the order made by the buyer; and
  • – shall acknowledge receipt of the order to the buyer without undue delay.

The order and the acknowledgement of receipt shall be deemed to have been received by the person who operates a business for the purpose of supply of goods or services through a website or in an online marketplace and the buyer, respectively, when the person and the buyer are able to access to such order and the acknowledgement of receipt.

The Online Marketplace Operator shall take reasonable steps to keep and maintain a record of the names, telephone numbers and the address of the person who supplies goods or services in the online marketplace, for a period of two years, failing which an offence is committed.

In addition to the terms and conditions, Online Business Owners and Online Marketplace Operators must comply with the Notice and Choice Principal provided by Personal Data Protection Act 2010 by inserting a privacy notice, in the National and English languages, on their website before the collection of any personal data.

Extra costs for businesses

Although this law seeks to protect consumers from unscrupulous traders, the introduction of this new law increases the startup costs and cost of operation of an e-commerce business.

Engaging lawyers to draft terms and conditions for e-commerce businesses can be expensive. But it is something any e-commerce business should invest in to protect themselves and their users.

The new law doesn’t specify in detail how the terms and conditions should be. Therefore, one can have a very simple set of terms and conditions.

Alternatively, one may opt to adopt the terms and conditions of other e-commerce businesses provided that one is well versed in drafting and amending agreements. But one should take note that every set of terms and conditions is customized for specific businesses.

It would be ideal if we have affordable online services to draft terms and conditions and privacy policies for SMEs (small and medium enterprises) like SnapTerms, which allows start-up companies the opportunity to customize their website’s terms and conditions without having to pay the fees typically associated with having the documents drafted by a lawyer.

But one must bear in mind that SnapTerms is a service provided by people who are well versed in the laws of their country and perhaps not Malaysia.

To digress a little, e-commerce businesses should also protect their intellectual property such as their trademarks, copyright and patents. These rights are registerable and one can protect these rights in Malaysia by filing them with the Intellectual Property Corporation of Malaysia or MyIPO.

Other than that, it is pertinent to protect your brand from being taken in well-known social media websites like Facebook and Twitter. You can use Knowem to check for the use of your brand, product, personal name or username instantly on over 550 popular and emerging social media websites.

Closing

The introduction of laws to track and record Internet transactions is nothing new. Last year, Section 114A of the Evidence Act 1950 and Cyber Centre and Cyber Cafe (Federal Territory of Kuala Lumpur) Rules 2012 were introduced to track and record such transactions.

These laws will not be the last. I foresee that many more such laws will be introduced in the near future.

Download:
Consumer Protection (Electronic Trade Transactions) Regulations 2012

Docudeer – Your source of sample legal agreements and documents!
1. General Terms of Services
2. Comprehensive e-Commerce Terms & Conditions
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4. General Privacy Policy

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Podcast: Onus is on you to prove your cyber innocence

I was interviewed by Malaysiakini in their podcast recently on the Evidence (Amendment) (No. 2) Bill 2012.

For our 15th Middle Malaysia podcast, we speak to Foong Cheng Leong, co-chair of the KL Bar IT Committee, about the new amendments to the Evidence Act. It was Foong who first broke the news about the new amendments via an article on the LoyarBurok blog.

He says the article at first didn’t garner much attention. That all changed when theSun published a front-page article based on it. Now, everyone’s talking about the serious implications of the new amendments.

Foong gives a broad overview of what the new law is all about and explains why it should be of grave concern for all those who use the Internet. He also gives his opinion on different social media scenarios where the Evidence Act could be applied.

His concerns, however, are not just on how this new law could affect criminal and politically-charged cases but also civil cases.

Lastly, he gives an example of how this law could affect cases concerning election offences and gives a real-life example of a past case that probably would have turned out very differently had the new law been in place then.

Foong, who often comments about IT issues, is totally against this law and is working towards having it repealed.

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Lets Talk – Amendments To The Evidence Act 1950

I was recently interviewed by The Malaysian Observer.TV (also known as www.mobtv.my), an internet TV portal. You can see the video below.

The new amendments to the Evidence Act 1950 that Parliament passed in April might force an innocent party to show that he is not the publisher. Vicims of stolen identity or hacking would have a lot more problems to fix, and it is dangerous to put the onus on Internet users, said Foong Cheng Leong, a lawyer/blogger.

Watch the video here.

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