12 ecommerce legal issues to consider when operating an online business

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

1. E-commerce and Internet businesses

A good starting point is to analyze a company’s online presence and audit its procedures to determine how to grow your brand and influence online. As part of this, the company’s agreements and websites 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. Issues related to domain names include the initial protection of a domain name, as well as the protection of domain names from adverse parties trying to offset 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”)

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

4. Online privacy

Online privacy is still a bigger problem. With the expansion of mobile devices, tablets and applications, 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 it is a powerful vehicle for branding and engaging with customers, social media can create a number of legal problems 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 use of social media, confidentiality, sponsorship, and brand guidelines.

6. Privacy policies

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

7. Terms of use agreements

Terms of Use (TOU) agreements can limit the liability of companies that maintain an Internet presence. These deals should be optimized to address a company’s specific business and should not be simply 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 licenses, advertising agreements, and payment processor agreements. E-commerce agreements should be drafted to address the main legal risks involved in a particular e-commerce contract or business transaction.

9. Sweepstakes and online 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 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. In general, preventing a domain theft in the first place is 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 the risks of disputes by analyzing the intellectual property portfolio, business processes, and branding objectives of an online company. Website agreements can be used for mobile applications in addition to websites.

12. Impersonation and user name occupation

Impersonation 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 squatting can also prevent a trademark or a trademark owner from controlling its trademark. In general, registering usernames in advance is the best strategy to avoid spoofing or squatting username.

While the above identifies a number of Internet and e-commerce issues affecting website and online merchant operators, an in-depth analysis may be required. For more information, you may want to contact a e-commerce lawyer.

Disclaimer: As with any discussion of legal issues, this article is intended to be educational only and is not a substitute for legal advice, does not provide legal advice, or form an attorney-client relationship with the reader. Seek legal advice before making any decisions. Also, please note that this article may not be updated, so the law and circumstances may have changed by the time you have read this article.

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