12 E-Commerce Legal Issues to Consider When Running an Online Business

The following article provides a high-level summary of some key e-commerce law issues that online business operators face when running a website or other e-commerce business. Doing business online or maintaining a website can expose companies and individuals to unforeseen legal liabilities. The following is a brief overview of the top 12 e-commerce law issues to consider:

1. Internet Commerce and Electronic Commerce

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

2. Acquisition of the domain name

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

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

Businesses operating websites, particularly where third-party content can be downloaded directly, should consider adopting agreements and procedures to protect against liability claims and copyright infringement. This procedure is sometimes referred to as the “Copyright Policy” or “DMCA Takedown Procedure.” Compliance with the DMCA can provide the online operator with protection from liability.

4. Online Privacy

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

5. Social Media Law

While a powerful vehicle for building brand strength and engaging with customers, social media can create a number of legal issues for online businesses. A social media policy provided to employees along with guidelines can be effective measures to reduce risk. A few key areas to consider are employment-related social media use, privacy, sponsorship, and brand guidelines.

6. Privacy policies

Privacy policies should not be copied from online templates or competing companies. They should be written comprehensively to address the unique issues of a specific online business and to accommodate future growth. Whether a company is looking to collect analytics or more personalized information, it should focus on its specific business needs and risk factors. Privacy policies should be updated as the business evolves.

7. Terms of Use

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

8. Electronic Commerce Agreements

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

9. Online contests and games

Sweepstakes, contests and online games create a number of legal pitfalls. Depending on the sweepstakes, contest or game, compliance with the laws of all 50 states as well as the federal government may be required. Registration in specific states may also be required. Online businesses can benefit from guidance on whether a particular new initiative qualifies as a sweepstakes, contest or game.

10. Domain theft

Recovering hacked domains can often be difficult and time consuming. Generally, avoiding domain theft in the first place is much easier than attempting to recover a stolen domain. Although difficult, it is possible to recover a hacked domain.

11. Website Agreements

Website agreements can be customized to limit legal liability and reduce litigation risk by analyzing an online company’s intellectual property portfolio, business processes, and branding goals. Website agreements can be used for mobile apps in addition to websites.

12. Impersonation and Username Squatting

Identity theft and username squatting can occur when a third party registers a social media account using someone else’s identity. This can lead to the publication of harmful messages and information on social networks. Username squatting can also prevent a brand or its owner from controlling their brand. Generally, registering usernames in advance is the best strategy to prevent impersonation or username squatting.

Although the above identifies a number of e-commerce and Internet law issues affecting websites and online business operators, in-depth analysis may be required. For more information, you can contact an e-commerce lawyer.

Disclaimer – As with any discussion of legal matters, this article is intended for educational purposes 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 consult a lawyer before making any decision. Please also note that this article will likely not be updated, so the law and circumstances may have changed by the time you read this article.

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