E-commerce in the United States: a complicated landscape | Denton

Organizations that conduct e-commerce in the United States must comply with an increasingly complicated patchwork of laws and regulations that make it difficult for e-commerce businesses to comply across state lines and for customers across know their rights across these borders. This article discusses four areas of compliance: (1) data privacy; (2) automatic renewal disclosures; (3) accessibility; and (4) arbitration clauses and class waivers under any terms of use or service.

Data Privacy There is no general federal data privacy law in the United States. Thus, data privacy with respect to e-commerce is regulated at the state level. To date, several states have passed online privacy laws that require certain disclosures in an organization’s privacy policy. In 2018, California became the first state to pass a comprehensive data privacy law known as the California Consumer Privacy Act (CCPA). The CCPA, as amended, grants most California residents broad new rights regarding how regulated businesses are permitted to collect, use and share their personal information. The CCPA will be amended effective January 1, 2023 in significant and material ways, including imposing new restrictions on how businesses collect, use, share and retain personal information of California residents. Other states have followed suit, with Virginia, Colorado, Utah, and Connecticut all passing comprehensive data privacy laws that will go into effect in 2023. In short, any business doing e-commerce in the states United States must comply with the growing patchwork of comprehensive data privacy laws. , as they have a direct impact on how information is collected, used, shared and stored in e-commerce. This is especially true with respect to the use of cookies, tracking pixels, and other related technologies to serve advertising and provide other functionality within the e-commerce ecosystem.

Automatic renewal A growing number of US states have passed laws that govern how businesses can sign up customers for automatic subscriptions or offers. These laws, often referred to as Automatic Renewal Laws (ARLs), provide requirements for how and when an organization can sign up a customer for an automatic subscription. In California, for example, the ARL requires companies to provide clear and prominent notice of subscription terms, cancellation methods, and to send certain confirmation notices. California’s ARL law will be amended effective July 1, 2022, adding further nuance to an already complicated compliance regime. Other states have similar laws governing automatic subscriptions.

Accessibility This is an area that has attracted particular attention in the United States when it comes to e-commerce. Increasingly, legislative regimes such as the CCPA require certain disclosures to be accessible, as defined by the Web Content Accessibility Guidelines (WCAG). There has also been a flurry of private lawsuits filed by individual plaintiffs across the group alleging that the websites are not accessible within the meaning and application of the Americans with Disabilities Act.

Arbitration / Class Waiver In the United States, it is common to include terms and conditions or terms of service as part of an e-commerce offering. These terms often contain arbitration provisions and a class waiver, requiring that any claims be brought against the organization on an individual basis (not as a class action) and in individual arbitration. If enforceable, these conditions can significantly mitigate risk and minimize exposure. The question of whether these conditions are enforceable, however, becomes more complex to determine. To enforce a set of terms, courts generally look to state law to determine whether a contract has been formed with the user. Whether the terms are accepted through a browse, scroll, or click-type agreement may affect the enforceability of the agreement. Whether an organization uses a checkbox or sign-in feature can impact whether the organization is protected in the event of a dispute.