Taking Your Business Online: What You Need To Know
Updated: Jun 21
We live in a rampant consumer society. In the retail world, these have become iconic and exceptionally lucrative days for the consumer goods world. Given the current global pandemic, many retail businesses have been forced to dive into e-commerce platforms. Simply put, brands must incorporate e-commerce either as their primary retail platform or as a compliment to their brick and mortar retail presence. There is no doubt that e-commerce will continue to be an important retail platform, even after the global pandemic. How your business integrates e-commerce into its business plan can vary, from hosting your own e-commerce website or to using a 3rd party e-commerce platforms. As always, there are key legal issues that should be addressed when making this transition.
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 directly 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 privacy and consumer protection laws? What are you using the data for and do you have the rights to do so? 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.
Supplier and Vendor 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 vendors, 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. With good contracts you can limit being stuck holding all the risk between your customers and suppliers.
Website Terms and Conditions
Online terms and conditions dictate how your platform may be used and is an important consideration for businesses operating online. Terms can be as customized as your actual e-commerce platform. Consider incorporating general sales terms and conditions, return policies, privacy policies, shipping policies, moderation policies, user generated content policies etc. into your website’s terms and conditions. If you provide a service online, you may also need a terms of service, which is effectively your customer agreement.
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. See previous blog posts on Canada's Anti-Spam Legislation (CASL) (linked).
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.
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.
Abiding by Foreign Laws
If you are selling to 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 and other consumer protection type laws.