Feedback Form

Addressing The Risks of Doing Business Online

Addressing The Risks of Doing Business Online

NOTICE. THE INFORMATION PROVIDED IN THIS ARTICLE IS OF A GENERAL NATURE AND IS DESIGNED FOR INFORMATIONAL PURPOSES ONLY. THE INFORMATION DOES NOT CONSTITUTE LEGAL ADVICE. Because every business situation is unique, and every legal situation dependent on the particular facts of the case or transaction, you should seek the personal assistance of a qualified attorney who can thoroughly review and analyze all aspects of your specific business or legal situation.

Advertising

Every Web site, regardless of whether it employs banner, pop-up or other advertising can itself be considered a form of advertising. Therefore, traditional advertising laws apply with equal force to the content and messages that make up a Web site. When a Web site adds cross-marketing and promotional advertising this implicates contractual issues.

When evaluating online legal risks, the first question to ask is whether the Web site complies with applicable advertising laws. Certain products or services advertised on the Web site may not be available or legal in all areas. You should indicate the jurisdictions for which your Web site is intended. Determine which messages must be uniform and which must be tailored for specific audiences and beware of comparative advertising restrictions. Also note that licensed professionals -- doctors, lawyers, etc. – face additional advertising restrictions.

If your Web site contains pricing information, examine applicable trade laws for antitrust, deceptive or predatory pricing issues. Examine internal systems for channel conflict or global pricing issues such as currency shopping.

If you are using banner advertising, or placing your advertising message on Web sites that you do not control, document your relationship. Pay particular attention to contractual issues such as rights and obligations for timing, placement, trademark usage, context and integrity, payment, maintenance and enhancement or modification. It is recommended that you also view a demo of the finished product prior to its launch.

Indirect Sales

Often, to avoid channel conflicts, companies will choose to use their online presence as a vehicle to drive sales to Value Added Resellers (VARs) or telephone sales representatives. Where pricing information is available from the Web site, ensure it is uniform, comes from independent sources and include statements that the price seen on the Web site may vary from that of the reseller.

Although the Web is viewable 24/7, everywhere and anywhere, geographic issues do arise. The population for whom the message is intended should be clear. Do not run afoul of international laws that may cover certain transactions such as domestic liquor laws or import/export restrictions. Do not process transactions with ineligible jurisdictions. One notable case involves the auctioning of Nazi memorabilia on the French version of Yahoo. Due to a French law making it illegal to exhibit or sell objects with racist overtones, a Paris court ordered U.S.-based Yahoo to block access to the Nazi material from French Internet users. Yahoo sued in a California District Court. The Judge there ruled last year that the First Amendment barred the French court from regulating Yahoo's speech on the Internet. The French plaintiffs have appealed the ruling to the 9th Circuit and that appeal is still pending.

Personal Data Collection

Almost all Web sites collect and extrapolate information about their users. Ostensibly this information is used to enhance the users’ experiences by providing customized services. This is an area of growing concern and there are steps you can take to ensure the fair use of information while allowing individuals to participate in decisions on the disclosure and use of their personal information.

If the Web site makes use of personal information, a link to the company’s Privacy Policy should be prominently placed on the home page and easily accessible throughout the Web site. The Privacy Policy should at a minimum contain information addressing issues of notice, choice, access, security and enforcement.

Notice. Consumers are entitled to notice of collection, use and disclosure of personal information. Notice should say what is collected how the Web site operator intends to use it, to whom the information will be disclosed, and the consequences of refusing to give the information; it should also address the issues of choice, access and security.

Choice. Consumers should have choices about how their information is used or disclosed beyond the original purpose for which it was provided (e.g., to complete a transaction). Choice may be “opt-in” (“click here to receive valuable information from our sponsors”) or “opt-out” (“click here if you do not want to receive new product announcements”). “Opt-in” affords stronger privacy protection because it establishes a default rule against disclosure and use.

Access. Consumers should have access to stored information about them and an opportunity to correct inaccuracies or delete data.

Security. Web sites should develop and employ policies and procedures to protect the security of the data and ensure its integrity and accuracy.

Eli Lilly and Company (Lilly) agreed to settle Federal Trade Commission charges regarding the unauthorized disclosure of sensitive personal information collected from consumers through its Prozac.com Web site. On June 27, 2001, a Lilly employee sent an e-mail message that included all of the recipients' e-mail addresses within the "To:" line of the message, thereby unintentionally disclosing to each individual subscriber the e-mail addresses of all 669 subscribers. The FTC complaint alleged that Lilly's claim of privacy and confidentiality on its Web site was deceptive because Lilly failed to maintain or implement internal measures appropriate under the circumstances to protect sensitive consumer information, which led to the company's unintentional disclosure of subscribers' personal information (i.e., e-mail addresses).

A Company should employ a four-stage information security program to establish and maintain reasonable and appropriate administrative, technical, and physical safeguards to protect personal information against any reasonably anticipated threats or hazards to its security, confidentiality, or integrity, and to protect such information against unauthorized access, use, or disclosure. Specifically, company’s should:

• designate appropriate personnel to coordinate and oversee the program;
• identify reasonably foreseeable internal and external risks to the security, confidentiality, and integrity of personal information, including any such risks posed by lack of training, and to address these risks in each relevant area of its operations, whether performed by employees or agents, including: (i) management and training of personnel; (ii) information systems for the processing, storage, transmission, or disposal of personal information; and (iii) prevention and response to attacks, intrusions, unauthorized access, or other information systems failures;
• conduct an annual written review by qualified persons, within ninety (90) days after the date of service of the order and yearly thereafter, which shall monitor and document compliance with the program, evaluate the program's effectiveness, and recommend changes to it; and
• adjust the program in light of any findings and recommendations resulting from reviews or ongoing monitoring, and in light of any material changes to company operations that affect the program.

Enforcement. These principles must be enforceable to be effective. You should have procedures in place to address infractions.

The issues outlined above are certainly no substitute for consulting a qualified lawyer to examine the risks of your particular venture. Next month we will examine issues of Online Delivery, Online Sales combined with payment processing and traditional delivery, Online Sales combined with payment processing and Online Delivery and Dialogue or Interactive Services.





Addressing The Risks of Doing Business Online - To learn more about this author, visit David M. Adler's Website.

Like this article? Share it with your friends

Related Forum Posts Article Feedback
Article Feedback No article feedback found.
Leave Your Feedback

Related Articles Related Articles
Successful Online Business - The Power Of Subconscious Mind
  You will be amazed at how much you can do by broadening your mind and opening up. It will allow you to pursue the goals and dreams you have always been too timid to go after.
MANAGING RISK
  A risk management approach should continuously monitor risk through activities such as identifying, analyzing, mitigation planning, tracking, and controlling risks. Additionally, risk management programs balance the...
Work At Home Online - Earn A Stable Income Today
  In the present economic climate, in many cases it is no longer enough to have just one source of income. People are starting to think of exploring other means to generate additional income in order to maintain a de...
MITIGATING RISKS FOR AFRICA'S GROWTH BUSINESSES (SMEs)
  PRESENTATION AT THE JAI/ADB 2ND ND AWIB TRAINING WORKSHOP SEPTEMBER 19-23, TUNIS, TUNISIA BY PETER KIBIRITI, CEO, CORPORATE AFRICA LTD CEO,NAIROBI, KENYA AUGUST 2005
A sinking "Titanic"
  Perseverance is one of the main requirements for a small or medium business owner who wants to be successful in today's complex business world. However, it will not help you as business owner to persevere while sail...

Related Forum Posts Related Forum Posts
Free Business ebooks Free Business ebooks
Re: Does Your Website Have a Robots.txt File? Re: Does Your Website Have a Robots.txt File?
My entry My entry
Willing to Fail Your Way to Success Willing to Fail Your Way to Success
Re: Kevin needs "social glue" ideas Re: Kevin needs "social glue" ideas
Re: Kevin needs "social glue" ideas Re: Kevin needs "social glue" ideas
Re: I want to do business online! Re: I want to do business online!
Re: Hello From Mr.Ven Re: Hello From Mr.Ven

Related Forum Posts Related Businesses - Evan Elite Authors
Jeff Foster
WebBizIdeas.com is a Minneapolis website design company founded to help people start an internet business by providing them with website, business, and internet resources that help foster the growth of successful online businesses and develop innovative Internet business ideas. - Visit Jeff Foster's Website

Richard Jefferies
For an online Car Loan Calculator and finance for a cheap car loan. Get approved on car loans or car finance in Australia with cheap bank car loans and finding a car finance broker. Commercial car loans including business car finance and car lease. Car Loan Calculator has information on finance companies and getting the right cheap car loan from banks at best car loan rates and a online car loan calculator for all finance in Australia. Get the best car finance with our help at Car Loan Calculator and Finance Ezi. - Visit Richard Jefferies's Website

Michel Neray
Michel Neray has over 25 years of experience as an award-winning copywriter, an Internet pioneer, a tradeshow pitchman and a senior sales and marketing executive. An online pioneer, he was one of the first marketing professionals to embrace the Internet by building websites as early as 1993. In 1994, Michel co-authored a book entitled "The Great Crossover: Personal Confidence in the Age of the Microchip", which made it to Jack Canfield's Achiever's Recommended Reading List. Michel founded Portfolios.com in 1995, the world's first online source directory for creative professionals and one of the first websites based on community generated content. Since creating The Essential Message in 2003, Michel has helped thousands of independent professionals and entrepreneurs as well as growing corporations find a better way to differentiate, position and brand themselves. In 2005, his chapter "Everything Starts With A Conversation" was selected as the lead for the book, "Sales Gurus Speak Out" and re-published in 2008 for 'Awakening The Workplace Volume 3'. He is also a co-author of "In the Company of Leaders" (2008) with 40 top North American leadership experts. - Visit Michel Neray's Website

David Barr
David Barr is the President of Venture Opportunities, Inc. David has been a professional business broker/intermediary since 1980 focusing on General Business Brokerage and Mergers and Acquisitions representing client transaction value from $400,000 to $20,000,000. Mr. Barr has handled the sale of over four hundred and fifty companies. David earned a university degree from the State University of New York majoring in economics and business. David holds the Mergers and Acquisition Master Intermediary and the Certified Business Intermediary designations from the International Business Brokers Association. He is also a Senior Business Analyst and a Texas licensed Real Estate Agent. For more information about David and Venture Opportunities, visit www.bizdealmaker.com. - Visit David Barr's Website

Anne Barr
Anne Barr has over 26 years experience in sales and marketing, six years as a franchisee. She has assisted over 367 business owners and purchasers to achieve their goals in career change, transition and exit strategy. She holds the designation of Certified Franchise Executive from the International Franchise Association, Certified Business Intermediary from the International Business Brokers Association and Board Certified Broker from the Texas Association of Business Brokers. Anne is active in professional organizations, networking groups and volunteers for non-profit entities. As owner/operator of four successful businesses, Anne has proven people skills and enjoys helping clients find the right "fit" in business ownership. Visit www.FranchiseOpportunitySpecialist.com for more information about me and my company. - Visit Anne Barr's Website

Casey Gollan
Casey Gollan, Business Coaching & Mentoring Programs. Add $1 Million to $10 Million in the next 1 to 3 years. Since 1996 Casey has to added hundreds of millions of dollars to businesses. Watch a free video see client results Business Coaching website. - Visit Casey Gollan's Website

Kim Castle
With nearly two decades in the advertising and design business, with clients like Domino's Pizza, General Motors, Direct TV, Pedigree, Wolfgang Puck, Higher Octave Music, Hollywood Celebrity Products, Disney, and Paramount, as well as thousands of entrepreneurs around the world define, structure, communicate, and position their business for greater profits, BrandU(R) co-creators Kim Castle and W. Vito Montone discovered that entrepreneurs could experience the same power that big brands command for a fraction of the cost with the world's only process-based results-drive Integral approach to business creation. BrandU(R) is helping entrepreneurs grow with the power of extreme clarity from idea...to brand...to market(TM) and helping one million entrepreneurs become successful and whole so that they can make a difference in the world. Are you one of them? If you want to experience clarity all the way to the bank(TM), get started now at http://www.brandu.com. - Visit Kim Castle's Website

Bernard Reber
Back in late 1992, MS Access hit the streets. About that time the company I managed needed new software to handle their growing client base and I decided to try this new product. I had little difficulty writing and adapting a database to suit us and discovered a hidden talent for programming. A business was born. With business studies and 25 years of management experience in three different countries under my belt, I could offer a unique combination of skills and my customers agreed. From these humble beginnings my software 'invoiceit' emerged in 1999 and has since been taken to 49 states (hello Wyoming, won't you join us?), all across Canada and more than 70 other countries. From the very beginning the program included cashbook accounting, the simplest form of keeping financial business records. The Dictionary.com defines 'cashbook' as "A 'book' in which to record money received and paid out". For 'book' substitute 'simple software' and that's what I'm about. Now I have published Simple Accounting, an inexpensive spreadsheet solution which even you can master. For just $14.95 it costs less than a takeout meal! More at http://www.scrambled-card.com/simple_accounting_main.htm - Visit Bernard Reber's Website


To learn more about the Evan Elite Author Program please contact us.

About The Author


David M. Adler
(Visit David's Website)
David Adler, attorney, author, educator, entrepreneur and driving force behind the Adler Law Group, a boutique intellectual property law firm in Chicago, Illinois. With an extensive background in corporate and IP law, including contract interpretation, drafting, negotiation, and enforcement, he also specializes in advising artistic talent and creative professionals in the media and entertainment industries. He received his law degree from the DePaul University College of Law where he wrote for the DePaul Arts & Entertainment Law Journal. He received a Bachelor of the Arts in English, a Bachelor of the Arts in History with a minor concentration Chemistry from Indiana University in Bloomington, Indiana. Mr. Adler also taught E-Business in the Arts, Entertainment & Media Management Department of Columbia College Chicago and past chair of the Chicago Bar Association's Start-up and Entrepreneurial Ventures Subcommittee. David M. Adler, Esq. & Associates, PC SAFEGUARDING IDEAS, RELATIONSHIPS & TALENT® 161 North Clark Street, Suite 2550 Chicago, Illinois 60601 Toll Free (866) 734-2568
About The Author

View Author Blog
View Author Blog

View Author Video
View Author Video

Free Downloads


David M. Adler's

Complete
List Of
Legal
Articles

First Name
Last Name
Email
What's the color of the sky?
Blue or Green
 
If you enjoyed this article, get David M. Adler's Complete List of Legal Articles For FREE!

More David M. Adler
Addressing The Risks of Doing Business Online
Copyright Basics
Private Equity Lessons for the Startup or Entrepreneurial Company
BEWARE OF NOTICES REGARDING YOUR TRADEMARKS
Technology Contracts How to Address Development Protection and Licensing
Form Content Distribution License Agreement
TRADEMARKS IN CYBERSPACE
Types of legal business structures
Startup Financing Equity What is Dilution
Checklist of Provisions for an LLC Operating Agreement
Become An Author


 
 
 



Have A Suggestion?
Toronto Salsa Classes / Toronto Salsa Lessons Email us your ideas on how to make our website more valuable! Thank you Sharon from Toronto Salsa Lessons / Classes for your suggestions to make the newsletter look like the website and profile younger entrepreneurs like Jennifer Lopez and Sean Combs!
Have A Suggestion?

Featured Ebook


ebook Famous Entrepreneurs - Modern Empire Builders


Featured Ebook

More Evan Carmichael
Have A Suggestion?


Sales Lessons From Starbucks And Dell