As an example, lets assume a US person is selling a computer program to a person residing in France. France has well-developed copyright law, as well contract and consumer protection laws. In this instance, setting the default rule for applicable law to be either that of the country of the purchaser, or the vendor, could work relatively well. By contrast, if the US business is selling online to a person in Mongolia, setting the default rule to be the law of the consumer, Mongolia, would create substantial uncertainty for the US business. By contrast if the default rule were the law of the country of the vendor, and if a US person were purchasing from a site in Mongolia, the US consumer could be a substantial disadvantage.
Similar complexities arise in respect of anti-piracy.
If the vendor were located in a country with weak copyright laws, and that person was selling pirated US software to US customers, it would be very hard for the US copyright owner to take legal action against the pirate. My discussion so far has been limited to the sale of legal goods and services. However, it is vital that during any discussion of jurisdictional issues related to Internet transactions that the issue of illegal goods and services is discussed as well. One of the core missions of the Business Software Alliance is the protection of the intellectual property of our member companies through education and prosecution in the civil and criminal courts. Until recently, most of the Internet piracy cases that BSA and the Department of Justice discovered had a clear jurisdiction in the United States.