E-Commerce Laws You Should Know

E-commerce businesses are on the rise, and with technology and resources at our fingertips, they are relatively easy to setup. However, not many people talk about the legal side of e-commerce, and e-commerce laws are vital to the success of new business owners.

If you own an online store, you're probably familiar with the basics of running a business digitally. But do you know all of the laws that apply to online businesses in the United States? From consumer protection laws to tax regulations, there are a number of compliance issues that you need to be aware of. 

In this article, we’ll review some of the e-commerce laws and regulations that you need to be aware of.

What are e-commerce laws

E-commerce laws, also known as online business laws, are a confusing and ever-changing landscape. Just when you think you have a handle on them, a new case or law is passed that throws everything off balance again. 

But, at their core, e commerce laws are designed to regulate the way businesses operate online.

This includes everything from how contracts are formed to how consumer data is used. And, while the legal aspect can seem daunting, they are in place to protect both businesses and consumers, alike. So, whether you're just getting started in the e-commerce world or you've been operating for years, it's important to stay up-to-date on the latest e-commerce laws to ensure that your business is compliant – and avoid any nasty surprises down the road.

We are going to highlight just a few of the top e-commerce laws you should know:

Federal Trade Commission’s Consumer Protection Laws (FTC)

The Federal Trade Commission's (FTC) consumer protection laws apply to all businesses, including online businesses. These laws prohibit unfair or deceptive practices, such as making false claims about your products or services. They also cover the domains of advertising, credit reporting, and debt collection.

The FTC also has the authority to take action against companies that engage in false or misleading advertising, as well as those that engage in other unfair business practices. In addition to enforcing these laws, the FTC also provides information and resources to help consumers learn about their rights and how to protect themselves from fraud and other unfair business practices.

Children’s Online Privacy Protection Act (COPPA)

​The Children's Online Privacy Protection Act (COPPA) imposes certain restrictions on online businesses that collect personal information from children under the age of 13. If your ecommerce store collects any personal information from children, you need to comply with COPPA.

Compliance with COPPA will include things such as obtaining parental consent for obtaining personal information, having a clear resource for parents to understand how the information is being collected and for what purpose, confirm parental consent and much more. 

Sales tax remittances

If you sell products online, you may be required to collect and remit sales tax to the state where your customer resides. This can be done easily through a third-party service such as Avalara or TaxJar. The rules for sales tax collection vary from state to state, so it's important to research the requirements in any state where you have customers.

CAN-SPAM Act

The CAN-SPAM Act establishes strict requirements for commercial emails, including things like clear and conspicuous notice and a working opt-out mechanism.

What is the CAN-SPAM Act?

The law applies to all types of email, including bulk email and messages sent to individuals. The act contains several key provisions, including a requirement that businesses include a valid physical address in their emails, a prohibition on using false or misleading headers in commercial emails, and a requirement that businesses provide recipients with an opt-out mechanism. 

The law imposes harsh penalties for violators, including stiff fines and up to five years in prison. And while it doesn’t apply to every type of email message, it can have a significant impact on e-commerce businesses. 

By understanding the requirements of the law and taking steps to ensure compliance, your business will avoid costly penalties.

Complying with intellectual property laws

When it comes to intellectual property, online sellers need to tread carefully, as there is a lot at stake. Luckily, there are steps that your business can take to help ensure compliance with intellectual property laws. 

First, it's important to have a clear understanding of what type of intellectual property is relevant to your store. This might include trademarks, copyrights, and patents. 

Then, you'll need to put appropriate procedures in place to protect your intellectual property. This might involve registering trademarks and copyrighting original content. 

Finally, you'll need to be diligent about monitoring and enforcing your intellectual property rights. By taking these steps, you can help minimize the risk of infringement and safeguard your valuable intellectual property. At the same time, you need to be sure to not infringe on others’ intellectual property rights. Be aware of what you’re selling, and ensure that it’s not violating any existing patents or trademarks.

Shipping restrictions

Shipping restrictions are the things that keep you from being able to ship anything and everything you want. There are a few different types of restrictions, but they all have one thing in common: they're designed to protect people, property, or both. Here's a quick overview of the most common ecommerce shipping restrictions:

1. Items that are considered hazardous, i.e. flammable liquids or poisonous chemicals
2. Items that are too large or too heavy to be shipped safely
3. Items that are prohibited by law, i.e. contraband or items with dangerous borders
4. Items that are restricted by the recipient's country, i.e. food products or medications

So, if you're ever wondering why you can't ship that big bottle of perfume or box of chocolates, now you know! Shipping restrictions may seem annoying, but they're there for a good reason.

Tariffs on international trade

​Online stores need to pay import and export taxes if they conduct international business. These taxes are levied on the value of the goods or services that are being traded.

Import taxes are levied on goods that are being imported into the country, while export taxes are levied on goods that are being exported out of the country. 

The rates of these taxes vary from country to country, and they can be either fixed or variable. To better understand how import and export tariffs affect you, visit the U.S. government’s International Trade Administration website.

Wrapping Up

These are just a few of the many laws that apply to online businesses in the United States. Staying compliant with all of these laws can be a challenge, but it's essential for protecting your business and your customers.

Michael Arnold

Michael is a freelancer from New York City. When he isn’t writing about how Kliken unleashes the marketing, you can find him reading, writing for pleasure, or traveling the globe.

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