Client updates / Internet

The Spanish Data Protection Authority slapped Facebook with a USD 1.4 million fine over three instances in which Facebook collected information on ideology, sex, religious beliefs, personal tastes, and browser history without properly notifying users what such information was being obtained for.

Recently, the Israeli Attorney General, in a legal opinion filed with the Israeli Supreme Court as part of an appeal filed by Facebook, opined that foreign companies (specifically those that do business via the internet) may not escape Israeli court jurisdiction even if the terms and conditions posted on their website state otherwise.

On June 2017, the government of Israel approved a draft bill to amend the Securities Law that is intended to tip the scales in the battle being waged in the financial trading sector over binary options.

Within the scope of a new directive published recently by the database registrar at the Israeli Law, Information and Technology Authority, entities, such as service-providers, that retain recordings of telephone conversations or chat correspondence with their customers will be forced to enable their customers (the subjects of the information) to also access information of this type. This according to the right of access prescribed in the Privacy Protection Law and the regulations instituted by virtue thereof.

Anyone who followed the financial press in Israel In the recent months would have realized that the Israel Securities Authority is on the war path against the binary option industry in Israel, and has every intention of closing it down. According to the Chairman of the ISA, Prof. Shmuel Houser, binary options are very similar to gambling, and often may involve fraudulent business practices intended to deceive the unaware investing public. 

The Israel Tax Authority published a draft  circular on taxation of virtual currencies (bitcoins and the like). According to the Draft, the ITA’s position is that virtual currencies should be deemed “assets” and not as currency or foreign currency or even as financial instruments.

A few days ago the Knesset Labor, Welfare and Health Committee enacted an amendment to Section 35 of the website accessibility regulations, called “the Equal Rights for People with Disabilities (Service Accessibility Adjustments) Regulations 5773-2013” (the “Regulations”).

The Knesset’s new anti-spam legislation includes any advertisement disseminated to the public at large that asks for a contribution or that constitutes non-commercial propaganda.

In the last year, the Israeli Securities Authority (ISA) has been reviewing license applications submitted for obtaining an online own-account financial trading license. As part of this licensing process, the ISA is intermittently issuing press releases clarifying various issues relating to the scope of the licensing legislation.

A few weeks ago, the ITA published a new circular which provides guidelines for the taxation of foreign corporate entities operating in Israel via the internet

Yesterday the Israeli Ministry of Finance opened a consultation process in respect of draft legislation aimed at amending the Israeli VAT legislation, introducing VAT liability on out of state e-commerce and digital services providers that provide electronic and digital products and services into Israel. This, even if such providers do not have any place of business in Israel.

In the last 20 years, the notion of examining whether to establish a casino in Israel comes back from time to time, to life. So far, this issue has not received much advancement by the government, for various reasons, such as religious parties’ opposition, the fear of an increase in gambling addictions, ideological opposition to casinos and so on and so forth.

Recently, the District Court discussed the legality of the Texas Hold’em Poker game. This was due to a criminal appeal against a Magistrate Court’s verdict in regards to the charges that were served against the appellant and her husband, for organizing a Texas Hold’em Poker tournament in their apartment.

The Israeli Prime Minister, Benjamin Netanyahu, has instructed the Transport Minister and the Tourism Minister, to evaluate the possibility and ramifications of establishing a brick and mortar casino in Eilat, one of Israel’s main touristic destinations. The review will look into, inter alia, the economic potential of establishing such a casino, the impact it would have on Eilat and the potential social risks involved.

The Israeli Tax Authority (ITA) published a draft circular concerning the taxation of foreign corporations that derive income from the provision of services via the internet to Israeli residents.

Such circular was published due to the need of the ITA to provide an interpretation of the Israeli tax legislation, in respect of income derived from e-commerce, so as to accommodate the substantial e-commerce activities taking place in or via Israel. The current definitions and rules, which relate to terms such as permanent establishment or place of doing business, have been commonly used in respect of brick and mortar businesses, and the need has arisen to provide an interpretation for such terms so as to allow them to appropriately be applied to the digital economy.

Introduction

On May 31, 2015, an Israeli District Court issued a ruling that could have a profound effect on Israeli facing e-commerce activity. In a nutshell, the Court ruled that despite a clear section in the terms and conditions of PayPal as to the jurisdiction in which any legal dispute between PayPal and any of its clients should be adjudicated, such a dispute can nevertheless be handled by a different court – which, in this matter, was an Israeli court.

About a month ago, the Israeli High Court of Justice deliberated a case petitioning the court to order the Minister of Finance and the Director of the Israeli Tax Authority to impose value added tax on multinational companies, such as Google and Facebook, arguing that they are providing services and selling goods in Israel via the internet, without being required to pay VAT, which gives them an unfair advantage over Israeli competitors.

The benefits of operating under a license and regulatory regime

Value

A higher value for the operator, on account of greater certainty to investors and the market in general. “Cleaner” operation is of higher value, even if carries with it smaller revenue.

The new regulatory regime in respect of own account financial trading recently came into effect in Israel. This followed a legislative process that took more than four and a half years since the enactment of the relevant primary legislation. This legislation assigned the Israeli Securities Authority (ISA) with the role of the regulator in charge of licensing of the relevant stakeholders and overseeing the implementation and enforcement of the legislation.