How does information technology work with trade laws?

Visitors crowd the IBM stand at the CeBIT technology trade fair on the first day the fair opened to the public on March 4, 2008, in Hanover, Germany.
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Some people might tell you the world is getting smaller, and sometimes it seems that way. This is especially apparent in the things we buy. Many products you can find in the United States, such as clothing and toys, are manufactured overseas in countries like China and India. A lot of the gasoline someone might purchase to fill up a car probably comes from an oil refinery in a faraway country. Food grown on a farm in the Midwest can be shipped to the other side of the world in less than a day.

The ubiquity of the Web has made these networks of trade even quicker to form and more complex. Anyone, no matter his or her interests, can surf the Internet for goods and services and make quick transactions. A student in New York City writing a major thesis on current Japanese animation can get on his laptop, log onto eBay and order foreign DVDs from Japan. Within a matter of weeks, maybe less, a package will show up in his mailbox and he'll be ready to watch and write.


Whenever a transfer like that takes place, information has to be passed from one location to another through the use of computers. For instance, if you want to order a book from, you'll have to provide specific information such as a credit card number and a physical address. Amazon, in turn, will keep that information on file for reference. The term used to describe the production, storing or communication of any kind of data, text, images, codes or any other kind of file is called information technology.

Just like there are laws that regulate the passing of goods between one country and another, there are also laws that cover the transfer of specific trade-related data. How do these laws work? Are they universal, or are they different depending on the country? To learn how information technology works with trade laws, read the next page.


Information Technology Compliance with Trade Law

An Ebay buyer checks on the progress of his bid at an eBay Live event on September 27, 2003 in Berlin, Germany. Are there any laws that protect his information?
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The network of trade is infinitely vast, and countless bits of information zip around the Internet each day. Millions of transactions are made on Web sites like and For an idea of how often people use technology to complete purchases and trade goods, credit card company Visa processes about 6,800 transactions per second during the holiday season [source: Information Week]. That's not just ATM withdrawals -- it's also purchases made at physical retail locations and purchases made over the Internet. All of it has to be passed across a complex network of bits and bytes and stored into company databases around the world.

Because of the increased risks of identity theft and other crimes involving personal data on the Internet, many laws cover consumer security. Crimes like identity fraud are continually on the rise, and the Federal Trade Commission (FTC) estimated that more than 9 million Americans have their identities compromised each year [source: FTC]. The threat only grows with incremental improvements in technology.


In the United States, legislation varies from one state to the next, but most are designed to protect the same sorts of information. For example, the Information Security Breach and Notification Act, passed in New York in 2005, and SB 1386, passed in California in 2003, are meant to give consumers speedy notification of any security breach that might involve the seizure of personal information [source: Ars Technica].

Vinton G. Cerf, vice president & chief Internet evangelist at Google, Inc., during the Senate Judiciary hearing on "Reconsidering Our Communications Laws: Ensuring Competition and Innovation."
Scott J. Ferrell/Congressional Quarterly/Getty Images

This personal information usually includes your name and address, along with at least a Social Security number, a driver's license number or any kind of account number, credit or debit card number and its necessary PIN or password. The reason these kinds of laws exist, according to the lawyers behind them, is that once companies notify their customers of potential security breaches, people will quickly be on guard to watch out for any suspicious activity on credit reports or anything else that can be tracked electronically.

There are also programs that make it difficult for Internet bots, software applications that run automated processes and act like humans, to gather information or infect other computers with viruses. When purchasing goods online, you may have come across what's called a CAPTCHA (Completely Automated Turing Test To Tell Computers and Humans Apart). They're usually small text boxes that contain wavy, randomly distorted text -- computers aren't able to "read" the words, but people can.

Although the Internet has created great economic growth, many challenges remain to make sure people have a safe and secure place to buy and sell goods. For lots more information on technology and trade, see the next page.


Frequently Answered Questions

What is a trading computer?
A trading computer is a computer that is specially designed for use by traders. These computers are often equipped with multiple monitors so that traders can view multiple markets at the same time, and they often have special software installed that allows traders to place orders and track their portfolios quickly.
Are trading computers worth it?
If you are a day trader, then you will need a computer that can handle multiple monitors and high-speed internet.

Lots More Information

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More Great Links

  • "About identity theft." Federal Trade Commission.
  • Anderson, Nate. "Data security law comes online in New York." Ars Technica. Dec. 8, 2005.
  • "CAPTCHA: Telling Humans and Computers Apart Automatically." The Official CAPTCHA Site. Carnegie Mellon University. 2007