COVID-19 has brought with it a new way of life, and in light of our new reality, many companies that did not have an online presence have been rushing to get online. From retail, to dance and exercise classes, to publishers of children's books and programming, the shift from the real world to the virtual is happening at a sweeping pace. While there are many services and platforms available to help you get online, it is up to the business itself to ensure that the online presence is legal. Legal considerations may not be top of mind during the mad rush to get online to survive; however, compliance and risk mitigation nevertheless remain important.
Many businesses with an established online presence are also impacted and adapting. The surge in consumers being online and increased demand for online shopping and virtual resources presents the opportunity to attract new customers, to consider new business models, and to interact with new and existing customers in a different way. For example, organizations are now making previously gated content available for free, are introducing subscription based models, trial periods, and 'freemium' offerings. Each of these business models implicate different consumer protection among other laws, and should be carefully executed.
Below are some considerations and tips to help with your legal compliance online:
- Brand Clearance and
Protection. Once you go online, you are potentially
exposing yourself to a bigger market, which creates both new
opportunities and risks for your brand. If you haven't
already, before you go online, it is a good idea to clear your
trademark, especially for new markets, and consider filing a
trademark application. As smaller, localized businesses begin to
move to a national or international platform, there may be a risk
of confusion and disputes among brand owners. Anticipating
these issues before the move online may help manage them.
- Domain Names & Social
Media Handles. If you don't already have one, getting
the right domain name and social media handles to reflect your
brand is important. Domain names and social media handles are
registered on a first come, first served basis, subject to
cybersquatting on trademark rights. Cybersquatting is registering,
selling or using a domain name with the bad faith intent of
profiting from the goodwill of someone else's trademark. If you
believe someone is cybersquatting on your domain name, you may be
able to bring a complaint under the Uniform Domain-Name
Dispute-Resolution Policy or a similar policy for the applicable
domain. And, in the immediate, you can get creative. There are many
new generic domains that you can consider as an alternate, like
.biz, .eco, .tech, .video and .store. Social media handles are also
registered on a first come, first served basis, and platforms often
have a policy to address that may help if someone scooped and is
squatting on your name without any legitimate right or
interest.
- Jurisdiction & Forum
for Disputes. Your website has global reach, and it is
important to turn your mind to any specific countries or regions
you are targeting. For example, your Terms of Use (discussed below)
should state where your website and company are located, who may
access and use your website, which law will govern your website and
where disputes will be handled. Factors that imply where your
website is located include language and currency (your Terms of Use
should also address these). It is important you turn your mind to
these factors as they provide clarity and transparency to your
customers and can also help to save time and money on
litigation.
- Terms of
Use. Terms of use are an important contract between
you and your customers. Unfortunately, studies have shown that
consumers don't always take the time to carefully read terms of
use or privacy policies, so organizations should present critical
information in a variety of user-friendly ways. Terms of use should
set out jurisdiction and dispute resolution as outlined above, and
should also address other key issues including disclaimers,
warranties, indemnification and your limitation of liability. Terms
should be tailored to your particular product, service and
website. For example, if your website is interactive, and
allows for public posting and social interaction, there should be
an acceptable use policy. Likewise, if you invite user
generated content, it is important your terms set the rules for
what content is acceptable. While it may be tempting to copy terms
of use from another site, doing so can carry material risks as the
terms may not be appropriate for your product or service
offering.
- Privacy Policy.
It is equally important for your website to have a Privacy policy,
along with notices to alert customers to the information you are
collecting, and how it will be used. With a new move online,
how you handle your customers' data will naturally change. In
addition to potentially collection information you historically
would not have had (e.g. customer name and address for deliveries),
you will likely begin capturing data such as IP addresses and
device IDs. Private sector organizations in Canada who collect, use
or disclose personal information in the course of commercial
activity must comply with applicable federal and provincial
legislation and must be transparent with consumers about how they
handle personal information. The privacy policy should set out what
information is collected, how the information will be used, whether
the information is shared with any third parties and any particular
risks or considerations the customer should be aware of. Privacy
policies can also help manage your customers expectations with
respect to how their data is handled. Much like terms of use,
privacy policies should be customized to reflect the
organization's actual data handling practices. Care should also
be exercised in opting into ad networks, and the privacy
implications.
- Reaching Customers &
Spam. Before giving in to the temptation to send email
blasts it is important to ensure you are complying with anti-spam
laws. Canada has strict rules for when commercial emails may be
sent, what must appear in emails, and unsubscribing to future
emails. Generally, you must have consent, and the conditions for
express and implied consent are strict. Other countries may also
have their own rules to keep in mind.
- Marketing &
Advertising. There are numerous advertising and
marketing law considerations when selling products or services
online. Here are a few topics to take into account. Generally
speaking, advertisements should not be false or misleading and any
claims must be able to be substantiated by adequate and proper
testing (such substantiation must exist before the claim is made).
There are also specific requirements for regulated products, such
as foods, prescription drugs, natural health products, cannabis and
alcohol. Organizations who want to run a contest should be aware of
the associated requirements, including those applicable for
contests held in Quebec. There are rules surrounding
'sales' and other price claims, as well as rules for
different types of marketing campaigns, promotions and business
models (e.g. subscription models, negative options and the like).
Finally, as mentioned, Canada has strict anti-spam legislation
which prescribes how commercial electronic messages must be sent,
and they should be kept in mind not only when sending emails but
when building your distribution lists. For example, extra
care should be exercised with 'refer a friend'
campaigns.
- Online sales &
Contracting. There are consumer protection and other rules
that govern online contracting, and it is important to keep these
in mind when you roll out online. Generally speaking, online
contracts should follow the same contractual principles as other
types of contracts, meaning there should be a clear description of
the product and the terms of sale. Further, the terms of use must
be presented clearly and accurately to help ensure your
customer's agreement to the contract is fully informed. You
should also be aware of any jurisdiction specific legislative
requirements. For example, in Ontario, the Consumer Protection
Act applies if either the seller or the purchaser is located
in the province during the sale, and sets rules for internet
agreements which could impact enforceability.
- Delivery. While
it may be tempting to open up to international delivery, shipping
outside your jurisdiction of operation should be carefully
considered. In addition to the risks from a jurisdictional
perspective as noted above, also turn your mind to ensuring your
products and services may be sold in the intended
jurisdictions. For example, there may be prohibitions or
restrictions on exportation, importation or sale of regulated
products and there may be different packaging and labelling
requirements as these can vary across jurisdictions. If you do go
online, you should ensure your customers are notified of any
applicable customs brokerage and duties and whether these charges
are to be handled by the customer upon receipt of the product (this
is especially important if you indicate prices in foreign
currencies). Finally, in light of the current pandemic, it is
important to ensure delivery guarantees are realistic, and also
consider contactless delivery methods and abide by social
distancing rules.
- Content & Code
Clearance. Everything on your website, from the underlying
code to the written text to the photos, videos and logos must be
cleared for use on your website. You can license stock photos and
content from various websites, and can also look into creative
commons or open-source licenses. If you are using open-source
licenses ensure that the license is for commercial use, and be
careful with any changes as modifications are often not permitted
by the license. There may also be nuances to open source software
licenses, and extra care should be exercised with respect to
clearing code. With respect to content, in particular, consider:
- photos, videos & music – Unauthorized use of photos, videos and music carries significant risk. There are many image and video rights management companies that crawl the internet for unauthorized use of photos. The same is true for music. Whether you need glossy photos and editorial images for visitor appeal, product photos to list your inventory online for a new online retail store, or music to play in the background of your online dance classes, it is imperative you turn your mind to clearing right.
- look & feel – There have been several disputes over 'copycat websites', and copying the look and feel of a website may give rise to copyright and/or passing off or other trademark claims. It is important to ensure your website's look and feel is original, appreciating of course, that certain placements are common and ok for all to use, as should be use of standard form templates, colours and icon schema.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.