More and more consumers are transitioning to the Internet as a means of accessing goods and services. Accordingly, more businesses have moved to online marketing to reach those consumers. Marketing online has many benefits: reaching consumers outside of your local market, cost efficiency with free marketing tools through various social media outlets and staying on par with competitors. However, marketing your business online still comes with legal concerns, and it is important to take these issues into consideration. Business owners found in violation of any of the following may be subject to review and action taken by the Federal Trade Commission (FTC).

Online Business and Intellectual Property

The Internet provides easy access to information, but this also creates a heightened risk of copyright and other intellectual property infringement. Pay special attention to the way you use others’ material online. If you reference a third party’s material, be sure you have the requisite permission and that proper credit is given or you risk both a civil action for intellectual property infringement and action by the FTC.

Email Marketing

The Controlling the Assault on Non-Solicited Pornography and Marketing Act of 2003 (CAN-SPAM Act) limits and regulates the methods by which businesses can market via email. In order to comply with CAN-SPAM Act requirements, businesses can send unsolicited emails to potential customers if they meet the following requirements:

  1. Clear procedures must be in place for a person to unsubscribe from the email and the business must honor requests to unsubscribe within 10 business days;
  2. The recipients’ email addresses must not have been harvested from other spam groups or sent through open mail relay, through which anyone can send email;
  3. “From,” “To,” “Reply To” and routing information must accurately reflect the business that is sending the information, and the email must clearly and conspicuously display that the message is an ad (though the law gives leeway on how to do this);
  4. Your physical business address must be included in the email.

If your business is in violation of these or any other requirements of the CAN-SPAM Act, you face significant fines imposed by the FTC. It is important to note that even if you hire a third party marketing firm, your business can still be liable for violations of the CAN-SPAM Act for emails sent on your behalf.

Security Provisions

As a business operator, you are responsible for taking proper measures to protect information collected from customers online. The FTC requires business to take reasonable measures to protect information collected from clients. Most importantly, this means being honest with customers about what information is collected and how you share it. Be sure your website has a privacy policy which accurately outlines how you collect, store and share consumer data. Keep your privacy policy updated regularly to reflect any changes you make to these policies. Using secure servers and properly disposing of customer information is equally important to prevent hackers or third parties from accessing such information.

Public Companies

If your company is publicly traded, there are numerous other regulations to consider, including information available through your website such as press releases and financial information, and limitations to raising capital online. Be sure to speak with your attorney regarding the requirements and prohibitions related to information shared and collected by public companies online.

Creating an online presence for your company can be an effective way to expand your business, but be sure to comply with all regulations and keep up to date on the latest legislative actions as this area of law is constantly adapting to the changing online landscape.