The future is uncertain as to the laws and governmental legislation concerning the privacy and the Internet.  There is great debate in several states now concerning the issues of privacy on the World Wide Web.  Some states have already adopted laws and are trying to pass legislation to adapt to the new technology of the Internet and web users.  Such states include Utah, where they have passed laws concerning digital signature laws.  This law created opportunities for banks and other institutions to act as the repositories of digital signatures allowing individuals and businesses to send and receive confidential information over the web, as well as conduct binding contractual business transactions. 

The growth of e-commerce has created the potential for new risks and abuses. Customers routinely buy products, trade investments, and bank online using personal information such as credit card, Social Security, and account numbers. A December 1999 study by Meridien Research found that online credit card fraud cost merchants more than $400 million per year. Meridien estimates this could rise to $60 billion annually by 2005. [5]

After nearly a millennium of paper-based, pen-signed commercial transactions, e-commerce is revolutionizing the pace of business and generating enormous convenience, cost savings and productivity gains. Moving to an electronic transactions model offers spectacular cost benefits, especially in the financial industry. However, it does raise concerns about security, which must be soundly addressed to assure corporate immunity to some of the hazards that are inherent in e-commerce. [6]

Most businesses have good intentions for information security, but e-commerce businesses face the huge challenge of protecting themselves from threats ranging from viruses and Trojan horses to web page defacing, distributed denial of services, and even disgruntled employees.[7] Security needs to be a core business competency for e-strategy, and it is a prime enabler of e-business and you cannot have e-commerce without security.

Concerns over the security of online transactions prevent many from engaging in e-commerce. The tradeoff between performance and security is becoming easier to swallow as security technology becomes increasingly integrated with enterprise systems.[8] There are several techniques to secure e-commerce website, such as PKI, encryption, digital signature, and public key. [9]  Some strategies of security are as follows:7

E-commerce creates some challenges to tax systems that were designed with a traditional retail model. There are several key reasons why e-commerce raises tax issues.

The first one is location. Existing tax systems tend to determine tax consequences based on where the taxpayer is physically located. The e-commerce model enables businesses to operate with very few physical locations. An online vendor can easily sell to customers throughout the world from a single physical location.

The second reason is Nature of Products.  E-commerce allows for some types of products, such as newspapers and music CDs, to be delivered in digitized (intangible) form, rather than in tangible form. Digitized products raise issues at the state level as to whether sales tax applies and in which state income is generated for state income tax purposes.