Legal Answers on E-Commerce

Navigating the maze of online business legal issues
By Toni Klym McLellan, Freelance Writer & Editor Toni Writes The reach of the Internet lets companies shrink the distance between customers and products or services. New technology brings novel legal issues related to e-commerce, including the need for global legal protections for businesses. If you conduct business electronically, understanding common legal issues makes smart business sense. Some aspects of e-commerce include:

1. Privacy and data security
2. Tax issues — U.S. and international
3. Piracy and copyright infringement

Meet your privacy and security obligations

This one is a moving target. There are multiple bills pending in Congress intended to spell out an e-business's obligation to keep its customers' private data secure. The laws touch on such matters as when a company may sell information to another or when a consumer must be notified that security has been breached.
Try:  The Better Business Bureau offers an excellent small-business security primer, and Visa offers details on security requirements for Visa credit card transactions. Consider tapping a private security company, such as Internet Security Systems, to manage data security for you, and let them worry about the laws.

Protect your domain name

As company or product name gains recognition, its domain name becomes a valuable asset. Take some basic steps to prevent competitors from mooching off of your company's successful brand by acquiring trademark protection and registering similar names.
Try:  Find information on trademark protection for your domain name from the U.S. Patent and Trademark Office. Affordable domain name registration is common today - register your domain name, common misspellings, and similar names at GoDaddy.com. NameProtect helps secure your domain name by offering trademark screening and monitoring and online brand protection.

Collect or pay sales tax

There is currently no federal legislation or statewide enforcement of sales tax on online transactions. Income tax regulations can vary by state, so consult your state tax authority. Proposed federal legislation allowing states to tax sales made over the Internet is likely to pass soon.
Try:  Ask your state revenue department about their Internet policy. Most states have signed on in support of a Streamlined Sales & Use Tax. Keep abreast of legal developments at the Streamlined Sales Tax Governing Board Web site.

Post a

Many companies post a "terms of use" section on their sites to clarify issues like where lawsuits should be filed (jurisdiction), dispute resolution, and disclaimers.
Try:  Insure.com has a a good example of a simple, clear terms of service policy that you can use as a guide. 

• If your site contains content either directed at children or adults-only content, be sure to comply with federal child safety and privacy laws.
• Use digital encryption to secure electronic signatures.
• In addition to a terms-of-use and privacy policy, be sure to post a copyright statement on your site's home page.