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Are you at risk? |
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If
your website collects
names and email addresses
and/or revenue, then
you are at risk!
Chip Cooper III, Esq. |
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Internet laws are a complex
patchwork --- drawn from various
state, federal, and even
international laws. You can not
find them in a single source.
They are often very confusing.
Evolutionary changes are
frequent. And they pose a
significant risk of legal
liability that could cost you
thousands!
Here's a sample: |
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CAN-SPAM Act of 2003
- If you build in a
commercial email capability
to your site, you must
comply with the Act. This
places a premium on securing
qualifying opt-in consent
through appropriate website
agreements, or strictly
complying with the Act's
email requirements,
particularly the opt-out
procedures. The Act permits
damages up to $2 million for
violators, and a U.S.
District Court may treble
the damages to $6 million.
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California Online Privacy
Protection Act of 2003 -
Effective July 1, 2004, if
your site collects
"personally identifiable
information" (this can be as
little as an email address!)
from California residents,
the Act requires a Privacy
Policy with specific legal
requirements. Failure to
comply could open the door
for consumer class action
suits.
-
Federal Trade
Commission (FTC) Enforcement
of Privacy Policies
- The FTC has filed a
number of suits against
website operators for
"deceptive practices"
regarding their Privacy
Policies. The FTC views
website Privacy Policies as
enforceable contracts ---
and aggressively
enforces them. Recent FTC
suits include these claims:
deceptive collection of
personal information; false
promises for collection of
personal information;
deceptive sale, sharing, and
rental of personal
information; deceptive and
false privacy assurances;
false claims regarding data
security; data security
flaws, lax data security
practices, and data security
vulnerabilities that exposed
personal information to
hackers and others on the
Web; and failure to
incorporate reasonable data
security measures. Just to
name a few.
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California Civil Code
Section 1789.3 - If
your site sells to
California residents,
California law requires the
site to provide specific
contact information,
including an email address,
for notifications of
complaints and for inquiries
regarding pricing policies.
Penalties range up to
$5,000, and actions may be
brought by the Attorney
General as well as any
District Attorney or City
Prosecutor in California.
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Specht v. Netscape
Communications Corp., 150
F.Supp. 2d 585 (S.D.N.Y.
2001), 306 F.3d 17 (2nd Cir.
2002) - The 2nd Circuit
upheld the trial court in
Specht, holding that a
certain Netscape online
agreement was unenforceable.
Subsequent cases
have followed the
contracting principles of
Specht. If you are unaware
of, or ignore the guidelines
in Specht, then the creation
and incorporation of online
agreements into your site
may result in completely
unenforceable agreements,
subjecting you to unlimited
legal liability and loss of
rights.
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The Digital Millennium
Copyright Act (DMCA) -
The DMCA provides a "safe
harbor" from strict
liability for copyright
infringement to qualifying
website service providers.
This protection is essential
if your site permits
visitors to post files or
text (such as in a forum,
chat room, or blog), which
could be infringing. If
your site qualifies for this
protection, but you are not
entitled to it for failure
to post the required
notices or to file the
required registration form,
you will be strictly liable
for copyright infringement
for infringing materials
posted by site visitors.
This is true even if you are
not aware of these postings!
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Unknown and Unintended
Warranties - The Uniform
Commercial Code (UCC)
provides for implied
warranties which, unless
properly disclaimed, your
site will be responsible
for, even if you are unaware
of these warranties and do
not intend to offer them.
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Federal Trade Commission
Act, 15 USC Sec. 41-58 -
The FTC Act prohibits unfair
or deceptive advertising
claims in any medium,
including websites. This
means that your site's
claims must be truthful and
not misleading. A claim can
be misleading if relevant
information is left out or
if the claim implies
something that's not true.
For example, a lease
advertisement for an
automobile that promotes "$0
Down" may be misleading if
significant and undisclosed
charges are due at lease
signing. The FTC will hold
the website operator liable.
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