4 Legal Obligations eCommerce Businesses Need to Know

eCommerce businesses are becoming increasingly popular as they provide customers with a convenient method for purchasing a wide ambit of products online. However, it is important to understand how the Australian Consumer Law interacts and applies to eCommerce businesses. Section 18 of the Australian Consumer Law prohibits a person in the course of business from engaging in any misleading and deceptive conduct. This article highlights four circumstances where eCommerce businesses should take care to ensure that they meet their obligations under the Australian Consumer Law.

1. Online Advertising

One of easiest ways to deceive or mislead a consumer is through online advertising. This is in particular to the price, quality and availability of refunds or repairs.

It is important to note that s 18 of the Australian Consumer Law extends to online advertising as well as other media. For example, business websites, bulletin boards and email distributions (e.g. subscription newsletters).

The courts have also considered the motive of businesses to be irrelevant when it comes to advertising. This means that it does not matter whether the eCommerce business intends to mislead a consumer or not.

Consumers have the right to receive accurate and truthful information regarding any products or services which they purchase from you. You should ensure advertisements can truthful and reflect the product or service you are selling.

2. Websites and Designs

A website which imitates another business logo, get-up or design is likely to mislead and deceive a consumer into believing that there is an affiliation or association between the businesses.

This can also constitute passing off if you suggest an association with another business which does not exist. The law of passing off seeks to protect a business’ reputation and goodwill which is often rooted in their business name and trademark.

3. Domain Names

It is also possible for eCommerce businesses to engage in misleading and deceptive conduct in the context of domain names. Some examples include, but are not limited to:

1. Representing an affiliation with another business or organisation in your domain name;
2. Using a trademark of another business as your domain name; and
3. Suggesting particular qualities or attributes in your domain name which are false (e.g. free)

4. The Use of Hyperlink Texts and Framing

eCommerce businesses are also susceptible to suggesting false associations with other businesses through hyperlinks. Similarly, this can also occur through the concept of framing.

Framing occurs when you import part of a third party’s website to your own. Unauthorised linking and framing is likely to constitute misleading and deceptive conduct, copyright infringement and passing off. It can also negatively impact the other business by diverting their advertising revenue.

Key Takeaways

If you are running an eCommerce business, it is important to understand how the Australian Consumer Law applies to your business. Some things to consider include your online advertising, website design, domain name and your hyperlinks and framing. By meeting your obligations, you will not only protect your business from legal disputes, but you will also help build relationships based on trust with your customers.

If you are seeking advice regarding your obligations as an eCommerce business, contact LegalVision today on 1300 544 755 or fill out the form on this page.