The Legal Implications of e-Business

What are the legal implications of e-business?

Defined by Canada Revenue Agency, e-business is any commercial activity conducted over electronic networks such as the internet, telephone, fax, electronic banking and payment systems.

Any company conducting e-business must comply with the laws of the local jurisdiction where e-business is carried out.  It doesn’t matter whether your company has a physical office in that jurisdiction. Additionally, laws that govern traditional commerce apply to e-business.  Examples of these laws include consumer protection, product safety, product standards, importing/exporting, and copyrights/trademarks. There are certain specific legal implications to keep in mind:

Consumer Protection Act

Each province has their own consumer protection act – be aware of this when you sell to consumers in other provinces.  For example, the Business Practices and Consumer Protection Act govern consumer protection in British Columbia.

Anti-Spam Laws

Canada’s Anti-Spam Legislation (CASL) came into effect on July 1, 2014, and was mainly enacted to prevent companies from inundating Canadians with promotional materials.  Emails, texts and other electronic means of communicating messages are protected by this new legislation. 

A few key points about CASL:

  • Businesses now need consent before sending commercial electronic messages.
  • Electronic messages posted in blogs or social media are exempt.
  • There is a 36-month transition period – meaning businesses can continue to send promotional messages to those who have given their express or implied consent.
    • For example, implied consent can be obtained by previously selling products or services to the consumer, assuming they have not expressly informed the business to not send promotional messages.
  • Compliance is critical – penalties can range from a warning to $1 million for individuals and $10 million for businesses.

Using any personal information of a customer can be considered a breach of their privacy rights.  The legislation that governs this in Canada is the Personal Information Protection and Electronic Documents Act (PIPEDA).

A few key points about PIPEDA:

  • PIPEDA applies to the federal-regulated sector, inter-provincial and international transactions in all provinces.
  • British Columbia, Alberta and Quebec have their own laws for the private sector.
  • PIPEDA also protects employee information in the federal-regulated sector.
Terms and Conditions for Online Sales

Ensure you clearly list out the terms and conditions when conducting business online with customers.  Make sure they accept these terms and conditions to acknowledge their understanding of it.  This is important to reduce potential liability.

How Can Winright Law Help?

If you are interested in starting a business and conducting business online, Winright Law can provide you the expertise to ensure your understanding of the legal implications in e-business and to protect you from potential legal liability in the future.

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