12 Ecommerce Legal Issues to Consider When Running an Online Business

The following article provides a high-level summary of some key e-commerce law issues faced by online business operators when running a website or other e-commerce business. Conducting business online or maintaining a website can subject companies and individuals to unforeseen legal liabilities. The following is a brief survey of 12 key eCommerce law issues to consider:

1. Internet business and electronic commerce

A good starting point is to analyze a company’s online presence and audit its procedures to determine how to grow its brand and influence online. As part of this, company websites and agreements must comply with the myriad of laws and regulations that affect websites and online businesses, such as COPPA.

2. Acquisition of domain names

Domains are often the key to an online business, but they can present a number of problems. Domain name issues include securing a domain name initially, as well as protecting domain names from opposing parties trying to trade the goodwill associated with the company’s brand. Sometimes the company needs defense, recovery and protection of domain names on the Internet.

3. Compliance with the Digital Millennium Copyright Act (“DMCA”)

Businesses that operate websites, particularly where third-party content may be uploaded directly, should consider adopting agreements and procedures to protect against copyright infringement and liability claims. This procedure is sometimes called a “copyright policy” or a “DMCA takedown” procedure. DMCA compliance can provide the online operator with a safe harbor from liability.

4. Online privacy

Online privacy continues to become a major issue. With the proliferation of mobile devices, tablets, and apps, privacy issues are becoming more complex. Businesses should consider drafting or updating their privacy policies, as well as adopting internal security protocols designed to protect the online privacy of customers and website users.

5. Law of Social Networks

While a powerful vehicle for branding and engaging with customers, social media can create a number of legal issues for online businesses. A social media policy provided to employees, as well as guidelines, can be effective steps to reduce risk. Some key areas to consider are the use of social media related to employment, confidentiality, sponsorship and brand guidelines.

6.Privacy Policy

Privacy policies should not be copied from online templates or rival companies. They should be written comprehensively to address unique problems of a specific online business and to accommodate future growth. Whether a business is looking to collect analytics or more tailored insights, the business needs to focus on its specific business needs and risk factors. Privacy policies must be updated as a business evolves.

7. Terms of Use Agreements

Terms of Use (TOU) agreements can limit the liability of companies that maintain a presence on the Internet. These deals should be optimized to address a company’s specific business and should not simply be cut and pasted from the internet. What works for one company may not work for another company.

8. Electronic Commerce Agreements

E-commerce agreements come in many forms, such as licensing agreements, advertising agreements, and payment processor agreements. E-commerce agreements should be written to address the main legal risks involved in a particular e-commerce contract or business transaction.

9. Sweepstakes and online games

Online sweepstakes, contests, and games create a number of legal hurdles. Depending on the sweepstakes, contest or game, compliance with the laws of all 50 states and the federal government may be required. It may also be necessary to register in specific states. Online businesses can benefit from guidance on whether a particular new initiative is considered a sweepstakes, contest, or game.

10. Domain Theft

Recovering hijacked domains can often be difficult and time consuming. Preventing domain theft in the first place is usually much easier than trying to recover a stolen domain. Although difficult, it is possible to recover a hijacked domain.

11. Website Agreements

Website agreements can be customized to limit legal liability and reduce the risks of disputes by analyzing a company’s online intellectual property portfolio, business processes, and brand goals. Website agreements can be used for mobile applications in addition to websites.

12. Impersonation and theft of usernames

Phishing and username spoofing can occur when a third party registers a social media account using someone else’s identity. This can lead to harmful posts and information being published on social media. Username spoofing can also prevent a trademark or brand owner from controlling your trademark. Registering usernames in advance is usually the best strategy to prevent spoofing or username spoofing.

While the above identifies a number of e-commerce and Internet law issues that affect website operators and online businesses, some in-depth analysis may be required. For more information, you can contact an eCommerce attorney.

Disclaimer: As with any discussion of legal topics, this article is intended to be educational only and is not a substitute for legal advice, nor does it provide legal advice or form an attorney-client relationship with the reader. Please seek legal advice before making any decision. Also, please note that this article may not be updated, so the law and circumstances may have changed by the time you read this article.

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