Launching your (Legally Compliant) E-Commerce Platform
Updated: Jul 4
For the last few years, brick and mortar retail locations has slowly seen a decline in prominence. As such, brands have gravitated towards e-commerce as either their primary retail platform or as a compliment to their brick and mortar retail presence. Now with government’s mandating work from home to quell the tide of Covid 19, e-commerce has become an ever more important retail platform for businesses. Moreover, with a new post- Covid 19 norm in the our future, it is likely that e-commerce will continue to be an important retail platform. How your business integrates e-commerce into its business plan can vary, from hosting your own ecommerce website to using a 3rd party e-commerce platform. The legal issues similarly will vary, depending on your business model.
This article debunks the misnomer that when businesses move online, there is no governing laws. In fact, the opposite is true. The greater the reach/audience, the more important compliance with governing laws are.
1. Privacy and Data. The facilitation of e-commerce transactions necessarily requires obtaining key personal information: name, contact information, address, banking information etc. Whether you are obtaining this information or a 3rd party is obtaining it on your behalf to facilitate the transaction, care must be taken to abide by privacy laws. Are you abiding by the governing national privacy and consumer protection laws? What are you using the data for? Are you allowing 3rd parties to also use the data? How are you protecting that data? The collection and use of data is fast becoming a legal sticking point and will only continue to rise in prominence as businesses accelerate toward the digital economy.
2. Contracts. Contracts are foundational for your business. This also extends to your ecommerce supply chain. You will need to enter into written(!) contracts with your consumers, e-commerce service providers, suppliers, manufacturers, etc. At every point of the supply chain, you want to ensure that the rights and obligations are clearly set out in terms of both parties’ performance obligations and non-performance of those obligations is managed.
3. Policies. Policies dictate how your platform is used and is an important consideration. Policies can be as customized as your actual e-commerce platform. Consider incorporating return policies, privacy policies, shipping policies, moderation policies, posting policies etc. into your general terms and conditions.
4. Digital Marketing. Ensure that you are complying with marketing legislation, as well as the social media platform’s own advertising policies. Deceptive marketing practices are not allowed. Moreover, if you are integrating e-mail marketing campaigns into your marketing strategy, ensure that you comply with Canada’s Anti Spam Legislation. Factor in laws governing competitions and rewards, as well.
5. Influencer Marketing. Once an outlier in the advertising world, influencer marketing is now a prominent and wildly recognized online advertising vehicle. Governments have been cracking down on deceptive marketing practices run through influencer marketing campaigns. Carefully architect your influencer marketing campaign so that it complies with governing legislation. Moreover, enter into appropriate influencer marketing contracts as well.
6. Battling Infringement/Online Counterfeiting. Unfortunately, the greater your exposure online, the greater the likelihood that your brand will be ripped off by counterfeiters. It is possible to monitor the activities of unauthorized third parties through online watch services. Ensure that you take action against these third parties by enforcing your rights. Your avenues of enforcement may be varied. For example, social media platforms and third party ecommerce platforms have their own intellectual property enforcement mechanisms from which you can enforce your rights. In addition, it is possible to register your intellectual property with customs borders to stave off the import/export of counterfeit/grey market goods. As well, it is possible to use domain name dispute tribunals to take over ownership of domain names that incorporate your trademarks. Suffice it to say, the online world is not lawless. There are many avenues to enforce your rights. But recognize that you’re in the best position to enforce your rights, if you’ve actually invested in protecting those rights. So don’t forget to build up your intellectual property portfolio first, from which to enforce your rights.
7. Abiding by Foreign Laws. If you are targeting consumers in countries outside of Canada, be cognizant that there may be local laws governing your retail presence. This may extend to licenses/permits, how certain goods must be shipped, age restrictions of purchasers for certain types of goods.
If you have legal questions about how to launch your business online, contact us here: firstname.lastname@example.org