Legal Law

12 Ecommerce Legal Issues to Consider When Operating an Online Business

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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. 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 bargain for the goodwill associated with the company brand. Sometimes the company needs Internet domain name defense, recovery and protection.

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 liability claims and copyright infringement. This procedure is sometimes called a “copyright policy” or a “DMCA takedown” procedure. DMCA compliance can provide the online operator with a safe haven from liability.

4. Privacy online

Online privacy continues to become a major issue. With the proliferation of mobile devices, tablets, and apps, privacy issues are becoming more complex. Companies should consider writing 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 they are a powerful vehicle for branding and engaging with customers, social media can create a host 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 employment-related social media use, confidentiality, sponsorship, and brand guidelines.

6.Privacy Policy

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

7. Terms of Use Agreements

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

8. E-Commerce Agreements

Ecommerce agreements come in many forms, such as licenses, advertising agreements, and payment processor agreements. E-commerce agreements must be drafted 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. Registration in specific states may also be required. Online businesses can benefit from guidance on whether a particular new initiative is considered a sweepstakes, contest, or game.

10. Domain Theft

Recovery of 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. While difficult, it is possible to recover a hijacked domain.

11. Website Agreements

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

12. Impersonation and usurpation of usernames

Phishing and username theft 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 posted on social media. Username spoofing can also prevent a trademark or brand owner from controlling their trademark. Generally, registering usernames in advance is the best strategy to prevent username spoofing or spoofing.

While the above identifies a number of issues related to electronic commerce and Internet law that affect operators of websites and online businesses, further 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 does not replace legal advice, 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 at the time you read this article.

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