Legal considerations for eCommerce and online services

11th May 2022

Starting an online store or moving your business online? Here are some legal considerations to consider when it comes to operating online retail and services.

Starting an online business can be exciting and daunting at the same time. Although online stores are much easier to set up than traditional brick and mortar retail businesses, there are still a number of legal considerations you’ll need to be on top of before you race out the gate into the world of eCommerce. Here are some of the things you’ll need to think about when setting up your online business.

Privacy policies

Online shopping involves collecting customers’ personal information such as their name, address, phone numbers, emails, and credit card details. Of course, this is necessary information for you to know where to send products, email updates, and receive payment. However you’ll have to outline how this information will be used and stored in your privacy policy. You’ll also need to mention if you’re planning on using these details for marketing purposes in the future, and what this may look like.

Website T&Cs and terms of use

When writing your terms and conditions (T&Cs), you’ll need to cover your policies for things like exchanges, refunds, feedback and reviews, and how these will be managed. Your T&Cs act as a tool to limit your liability, so you’ll need to ensure you include everything necessary to protect your business should you face a dispute.

You should also outline how the public can use and access your website and the materials on it. This is known as the terms of use, and can include your IP protection (registered trademarks or branding) and any disclaimers you may need to address.

Business structure

When you start your business, you’ll need to decide which structure you will operate under. This can have implications for liability, so it’s good to know how the different structures can affect you when it comes to your legal obligations. The most common business structures in Australia are:

  • Company
  • Sole trader
  • Partnership
  • Trust.

A company structure is usually what most businesses choose to operate under as it limits your personal liability. It can also provide the most flexibility when you start to grow and invest. Although becoming a sole trader is also popular for new online businesses, they typically encounter more personal liability.

Advertising, customer reviews and direct marketing

If you’re advertising for your online store or business, including on social media, you’ll need to make sure you’re compliant with the Australian competition, fair trading and consumer protection laws. For example, collecting false reviews or not removing false or misleading reviews could have you breaching Australian law, so you’ll need to know how to manage customer reviews the right way.

When it comes to direct marketing methods like email and SMS, you must be familiar and compliant with the Spam Act 2003. You must have customers’ permission to send marketing materials, make it clear how they can contact you and how to unsubscribe from marketing communications if they wish to do so.

Distribution, supply and shipping

Different shipping methods can come with their own challenges. Although popular for its easy to set up structure, drop-shipping in particular is an area that can cause a multitude of issues when businesses aren’t prepared.

At Lakis & Knight, we can draft conditions and review the T&Cs given to suppliers to ensure your online business is kept running smoothly. Our expertise has helped some of Australia’s biggest online retailers find incredible success in the world of eCommerce, including award-winning online retailer Deals Direct. Get in touch with us today to find out how we can help your online business thrive.