We love how easy it has become to set up an online store. We’re all for #startuplife and are constantly amazed by the new technologies making it easier to start businesses.
It’s so easy to set up shop that it’s also really easy to errrr... forget that setting up a business, even a solo biz run out of your spare bedroom, comes with obligations. And that brings us to the very point of this article!
If you’re planning to set up an e-commerce business it’s important to take the time to understand the laws that apply to you. Knowing your obligations will help protect you and your business. It will also ensure you don’t run into any detrimental roadblocks like say, a lawsuit.
Australian Consumer Law
Every business operating in Australia, e-commerce or otherwise, needs to comply with Australian Consumer Law (ACL) which is laid out in Schedule 2 of Competition and Consumer Act 2010.
The ACL is a single national law that applies to all Australian States and Territories. No silos here. It applies to all businesses (including small business) and consumers and is the principal consumer protection law in Australia.
Under the ACL, consumers have a right to the same remedies and protections regardless of their location. That means Jane who lives in the country and buys skincare from an online indie brand has the same basic protections as Matilda who only buys La Mer from David Jones. Both the indie brand and David Jones have the same business obligations and responsibilities. In other words, whether you run your business out of your bedroom or a major Westfield shopping centre, the same rules apply. #equality
Whatever you sell must fulfil certain criteria as set out in the ACL. This includes goods being:
- Fit for purpose
- Of merchantable quality
- Free from defects or faults
- Free of any financial encumbrances other than those disclosed to the consumer
The ACL and Competition & Consumer Act (2010) is administered by the Australian Competition and Consumer Commission . We recommend visiting their website and familiarising yourself with the content outlined in the 2010 Act.
In addition to the all-encompassing ACL, there are also fair trading laws. Each state and territory has its own fair trading guidelines that you should make an effort to understand.
Don’t worry, we’ll save you the extra clicks. Here are quick links to the fair trading acts relevant to each state and the websites of the entities that administer them.
- QLD Fair Trading Act 1989 administered by QLD Office of Fair Trading
- NSW Fair Trading Act 1987 administered by NSW Fair Trading
- VIC Fair Trading Act 2012 administered by Consumer Affairs Victoria
- SA Fair Trading Act 1987 administered by Consumer and Business Services
- TAS Fair Trading Act administered by Consumer Affairs and Fair Trading
- WA Fair Trading Act 2010 administered by Department of Commerce
- ACT Fair Trading Act 1992 administered by Access Canberra
Licenses and Permits
What are you planning to sell on your e-commerce store? What and how you sell will directly impact your legal obligations and insurance considerations.
Are you going to sell the next must-have beauty item? What about jeans that suit every booty (see what we did there 😏)? Or are you going to offer a service like copywriting or graphic design?
Whatever it is, you want to be sure you have your ducks in a row. Click here to learn about the licenses you may need for your business. For example, say you are planning to sell bootylicious jeans online. Let’s also say these jeans are made in Australia and sold online but also sold in NSW specifically via pop-up shops and market stalls. Two things you may need to consider are: The Ethical Clothing Trades and Extended Responsibility Scheme and obtaining licenses from relevant councils to run your pop-up stores.
Guidelines for E-Commerce
In Australia, our glorious land down under, a document exists called The Australian Guidelines for Electronic Commerce. These guidelines set out best practice for e-commerce businesses and were developed to help inspire consumer confidence in online retailing.
The guidelines cover a range of topics including privacy, terms and conditions, payment, security and authentication and internal complaint handling. We recommend bookmarking this for easy referral. We’ll delve deeper into some key guidelines below.
We all hate spam, right? And for good reason. It’s illegal! Under the Spam Act 2003, it is illegal to send unsolicited commercial electronic messages, this includes email and SMS. When you sign customers up to any promotional activity you must ensure you have their consent and give them a clear way to opt-out of receiving messages. See the Australian Communications and Media Authority for more information about spam (not the food, just in case that wasn’t clear by now).
E-commerce stores have an obligation to protect the data they collect. Think about it. You’re handling a lot of sensitive information. Names, addresses, credit card details. Yikes! You want to be sure this information is safe from hackers and other nefarious third parties. It’s your duty to tell customers how you go about protecting their data. Protections can include things like SSL certificates and encrypted data. E-commerce sites like Shopify take security very seriously and so it’s worth checking out how they help you keep data safe, including your own!
And so friends, there you have it. A basic rundown of your obligations as an e-commerce business owner. It’s a lot to take in, we know. You can claim a call with a member of the Foundd Legal team to learn more about setting up an e-commerce store legally and your responsibilities as an e-commerce business owner. We’re friendly and always here to help, we promise!
psst... pin this to your Biz Board on Pinterest for safe keeping ;)
FOUNDD LEGAL articles are intended to provide commentary and general information in an informal style. We love to keep you informed but our posts are not intended to be relied upon as legal advice. We advise you to seek legal counsel for up-to-the-minute advice and proper addressing of your queries and concerns.