12 eCommerce Legal Issues to Consider in Operating an Online Business

The following article provides a high-level summary of some key eCommerce law issues online business operators face in running a website or other eCommerce business. Conducting business online or maintaining a website may 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 & eCommerce

A good starting point is analyzing a company’s online presence and auditing their procedures to determine how to grow their brand and online influence. As part of this, the company’s agreements and websites should comply with the myriad of laws and regulations affecting websites and online businesses, such as COPPA.

2. Domain Name Acquisition

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

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

Companies operating websites, particularly where third-party content may be uploaded directly, should consider adopting agreements and procedures to shield themselves against claims of liability and copyright infringement. This procedure is sometimes referred to as a “copyright policy” or “DMCA takedown” procedure. Compliance with the DMCA can provide the online operator with a safe harbor 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 more complex. Companies should consider composing or updating their privacy policies as well as adopting internal security protocols aimed at protecting the online privacy of customers and website users.

5. Social Media Law

While a powerful vehicle to build brand strength and interact 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. A few key areas to consider are employment related use of social media, confidentiality, sponsorship, and branding guidelines.

6. Privacy Policies

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

7. Terms of Use Agreements

Terms of Use (TOU) agreements can limit liability for companies that maintain an Internet presence. These agreements 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. eCommerce Agreements

eCommerce agreements come in many forms such as licensing, advertising agreements, and payment processor agreements. eCommerce agreements should be drafted to address the primary legal risks involved in a particular eCommerce contract or business transaction.

9. Online Sweepstakes & Games

Online sweepstakes, contests, and games create a number of legal pitfalls. Depending on the sweepstake, 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 may benefit from guidance as to whether a particular new initiative is considered a sweepstake, contest, or game.

10. Domain Theft

Recovering hijacked domains can often be difficult and time-consuming. Typically, avoiding domain theft in the first place is much easier than attempting 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 risks of disputes by analyzing an online business’s intellectual property portfolio, business processes, and brand objectives. Website agreements can be used for mobile applications in addition to websites.

12. Impersonation and Username Squatting

Impersonation and username squatting can occur when a third party registers a social media account using someone else’s identity. This can result in harmful posts and information being published in social media. Username squatting can also prevent a trademark or brand owner from controlling their trademark. Typically, registering usernames in advance is the best strategy to avoid impersonation or username squatting.

WhatsApp, iMessage, and Snapchat Attacked Because of Their Encryption

You can not realistically ban encryption. Encryption is used to protect communication through electronic devices; it protects your bank information and online accounts. This is cryptography, it is used in hundreds of systems. We have politicians speaking about banning these technologies. How can this be? British Prime minister David Cameron has raised a red flag on encrypted messaging apps like WhatsApp, iMessage, and Snapchat. He has called for the banning of these apps; implying that they are being used by criminal organizations and terrorists to communicate.

“In our country, do we want to allow a means of communication between people which we cannot read?”, rhetorically said by the Prime Minister

With this sort of logic I am going to go as far as to say; we should leave our houses and cars unlocked; and valuables left unguarded in public spaces because surely it would be much simpler to catch thieves and put them in prison.

Security is not just for what the social norm calls the “good guys”. It is a two way street. I would rather have peace of mind that my data is being protected so well; to the point that Government officials can not tap into it. Think about the various ways this could go wrong. Imagine corrupt politicians with access to data or just consider that lightening up on security measures, will make it easier for the average hacker to gain access.

Computer scientists have spoken out on the futility of weakening encryption; so only Government officials have access.This same weaknesses can be exploited by malicious hackers. This view is held by many computer experts actively in the field.

A few months back a ban was called on WhatsApp in the UK; it has recently been dropped because of mass criticism. But this can of worms has not been closed just yet. This has just pushed the issue to other parts of the world; where they can theoretically gain some traction and spread. India has a ban on certain types of encryption. WhatsApp uses end to end encryption; which is illegal in India. WhatsApp uses a 256bit encryption which is only known by the sender and the receiver. India only allows 40bit encryption if you want to have permission you need to apply through the Government. The Indian Government has asked for the keys to be able to gain access; but WhatsApp creators have said they do not have them. So all user using the latest version of WhatsApp in India are technically breaking the law. No actions have been decided on what to do with the company; they are not based in India making things complicated. Recently Brazilian authorities have been reported to have been reported to be collecting WhatsApp data with the hopes of fighting drug tracking. WhatsApp has been cooperating with law enforcement; but have gone on to say that they cannot provide the full extent of what they want. We are just uncovering what’s on the surface; do some research on what your local Government and even internet service providers are doing; and what data they are doing with this data.

Help! A Pokemon Is Trespassing On My Lawn

Unless you’ve been hiding under a rock since 6 July 2016, you will at least know that millions of people all over the globe are now spending every spare moment out hunting Pokemon. (For the uninitiated who are about to correct my grammar, I’m assured that Pokemon is both singular and plural, there’s no ‘Pokemons’). It’s an international obsession, that saw the new ‘Pokemon Go’ app downloaded more than 15 million times in the first 6 days after its launch in Australia, Japan and the United States.

What’s a Pokemon? Technically it’s a small critter found in video games. Catch one, and you can train it to help you battle others. The basic concept hasn’t changed, even though (believe it or not) Pokemon are now 20 years old. That’s how long ago it was when some clever computer people dreamed up the Pokemon video game for Nintendo’s hand-held Game Boy device. At that stage, most people didn’t have access to the internet, and Pokemon were strictly offline beasties. Even so, according to Wikipedia the Pokemon franchise has sold about 280 million units, making it the second most popular game franchise ever, based on unit sales. Gross revenues for the franchise have exceeded $46 billion over that period, which might technically make the empire of Pokemon bigger than Greenland or the Cayman Islands. Those guys should seriously think about getting a national dragon!

For the past two years, some other clever people working at Niantic, partly owned by Nintendo, have been beavering away, or should I say ‘pokemoning’ away (yep, it’s a real word) to produce the latest and greatest edition that was released on 6 July 2016. On that date, the cages were opened and Pokemon ran, swam and flew to all the four corners of the earth where they can be found today. Right now. I can see them. Of course I can only see them though my Android looking glass, but Niantic promise that very soon I will have my own personal ‘Pokemon Go Plus’ wearable device – a kind of lapel clip – that will alert me to the presence of a Pokemon nearby and enable me to hunt it down without touching my phone. Everywhere you go on earth you will see these lapel clips, buzzing away. Buzz. Buzz. And you thought mobile phones going off in theatres was a distraction!

Why does this matter anyway? Bear with me while I wear my geek boy glasses for a moment. Firstly, Pokemon Go is a kind of ‘augmented reality’ system. Many people and organisations have tried to take these systems into the mainstream, with zero commercial success. The early popularity of Pokemon Go shows that augmented reality might really be a new revolution on our doorstep, changing our lives more than texting and selfies (for example). Hunting Pokemon is just the start of this revolution. Secondly, the convergence of artificial intelligence and augmented reality opens the door to a world where constant companions will be with us wherever we go, hugely enriching our experience of the world. Think Siri on Anavar.

Some readers will remember ‘Clippy’ and other attempts to supposedly enrich users’ experiences of desktop productivity software. If you don’t remember Clippy, count yourself lucky. Clippy was an irritating wannabe that sometimes made you feel like punching the screen just to make him go away. And perhaps that’s the point here. We don’t want enrichment foisted onto us. What we want is enrichment that is there when we need it or choose it, like a friend in our life who we invite to come places with us. Pokemon may be beguiling and magnetic, but they don’t invade our space unless we opt in. Put simply, friends are for when we want to play, or share experiences, and sometimes when we want to pour our hearts out to a good listener. News flash: Dr Pokemon will see you now.

However, sometimes friends lead you astray and get you in trouble, and apparently “‘I was collecting Pokemon’ is not a legal defence” according to police in Western Australia. Really? So if I chase my imaginary monster friend into your back yard I can’t plead insanity? (find “Pokemon insanity” online. It’s a thing already). I hear that people are putting up signs on their properties now, telling Pokemon trainers not to trespass there. In fact, some lawyers are suggesting that if you come onto my property and take my Pokemon it’s theft. You have been warned.