There are a number of laws designed to protect both seller and consumer. They have been extended to cover online sales, but where to start? In order to be legally compliant, it is important to know what rules and regulations apply to not just to businesses, but also to the sector in which the company operates. For example, selling food products come with a range of health and hygiene laws on top of the general sale of goods legislation, plus privacy laws linked to data protection. It can seem be a minefield when one is considering to sell online, however, this does not have to be the case.
First things first – business registrations, trademarks and fair trading
Before commencing any trading activities, companies in Australia have to register their business name and register for business tax. Companies will need to register for a number of taxes, and they could include the Goods and Services tax, a tax file number or pay as you go. Failure to comply with taxation legislation has serious consequences so it is important to ensure that the organisation complies with all the statutory requirements.
Equally, the company has to ensure it meets fair trading standards when selling online to comply with the Competition and Consumer Act. Discussing the set up of selling online before going ahead and trading, with experts in corporate and commercial law will stand a business owner in good stead.
The Trade Marks Act is another law that companies should note before selling online. Trademarks, which distinguish services or goods, differentiate the business and the quality of the products or services from other companies. However, not only do they protect the rights of the online business, but are there to ensure that when selling online, other people’s rights are not infringed. The IP Australia (IPA) is the resource where a business can register their own trademark, but also check on the registry of current marks to ensure a business does not unwittingly duplicate another company mark.
Privacy laws at home and abroad
It is important to be aware of the changes in privacy laws abroad, particularly if consumers involve members of the EU state, as the General Data Protection Regulations, were introduced on 25th May 2018. These laws strengthened the rights of the data subjects in the EU and gave increased powers to supervisory agencies to enforce some quite substantial fines, if personally identifiable data was breached. Holding personal data on marketing lists, for example, of EU citizens without their informed consent, is one area in which a number of online sellers are falling foul. Fortunately, there are experts with international expertise, who can steer an online seller through the minefield of privacy laws to ensure they protect their business.
The Australian Government brought in the Spam Act 2003 when addressing privacy issues, in order to minimise the inconvenience and costs of spam mail or unsolicited commercial emails and messaging. Again, there can be significant penalties levied at firms who fall foul of the privacy laws when collecting and utilising consumers email addresses and personal information, so take note of the legislation around data protection. Data protection in Australia is not applicable to every type of business but a company will be subject to the Privacy Act if they have more than an annual turnover of $3 million.
Product safety laws for online sellers
In Australia these laws will apply, regardless of selling online or face-to-face and applies at every stage of the supply chain. In a nutshell, any product sold online has to comply with Australian mandatory safety standards. Banned products cannot be sold online and products recalled if the company identifies, or is notified of a safety hazard. Any serious injury, illness or fatality caused by the product supplied must be reported and even if the business complies with international safety standards or other trusted standards, this is not the green light to say it complies with Australian mandatory safety requirements or bans. The impact on failure to abide by these laws, can be expensive and may result in legal liability and a loss of reputation, as well as having to refund customers or repair and replace goods.
Age restrictions and advertising
This depends on what products or services are being sold online. However, it is very important to ensure that sales with minors are avoided and that the company has taken reasonable steps to ensure this does not occur. Any advertising through the internet or print media, via radio or television must comply with the Australian Consumer Law or ACL. Online sales practice must adhere to this business law whether using email, apps, price comparison sites, search engines, review platforms, social media sites and online shopping sites. The ACL is part of the Competition and Consumer Act 2010 and one of the key business laws for ecommerce to understand so they can operate within its parameter.
Help at hand
Trading online has never been easier but it can also be an area where a business trading online can inadvertently fall foul of local, territorial, national or international business laws. It makes economic sense to work with an expert in ecommerce to ensure that when selling online a company is carrying out safe business practices and demonstrating risk awareness. This not only takes the worry out of commercial trading online but also shows good practice to partners, investors, those who legislate these laws and those who enforce them – a win-win for all concerned.