Legal Issues Faced By E-Commerce Businesses

Legal Issues Faced By E-Commerce Businesses


With the advanced and increased use of online media, online business is becoming a fast emerging trend. Every five in eight companies are operating online, conducting E-Commerce business. But being functional online doesn’t mean you can escape legal matters. E-Commerce is understood to mean the production, distribution, marketing, sale or delivery of goods and services by electronic means. Over the past few years, global trade has expanded due to the explosive growth of electronic commerce.

There are various legal issues associated with E-Commerce businesses. If these issues are not taken care of in time, they can lead to serious problems for a business. Described below are some of the common legal issues an E-Commerce business faces.

Incorporation Problem

If the company has operated merely via a website, not being incorporated is a crucial problem. Any purchase and selling activity related to the products will be considered illegal and you can’t claim your right in case of any fraud and corruption. Without incorporation, the business has no shelter.

Trademark Security Problem

Not getting trademark protected is one of the main legal issues in the field of E-Commerce. Since trademark is the company’s logo and symbol, the representation of  business all over the web, it must be protected. If it is not secure , it won’t take long before you realize your trademark is being infringed upon. This is very common legal issue and can become a deadly threat to  e-business.

With the hackers on loose and cybercrime so common, trademark infringement of the business or by your business can be a serious legal matter and may hinder the business’s progress.

Copyright Protection Issue

While publishing content for  E-Commerce website, using content of any other company can be a severe legal problem. This might mark an end to your e-business. There are many sites online which are royalty free and allow you to access their content and images. You may use those sites for creating web content for your business site. Even if you unintentionally used copyrighted content, the other party can easily sue your business.

Transaction Issues

If we do not abide by the rules, we can get into serious law violation problems. If the business fails to provide clear and complete description of the product, cost and purchase details, information about delivery i.e. when the customer will receive products and other information related to exchange and refunds,  Consumer Law can impose penalties on the business.

Privacy Issues

When it comes to online businesses, privacy is the major issue that can create problems both for the business and customers. Consumers share information with businesses online and they expect the sellers to keep their information confidential. By just one minor mistake and leakage of valuable information of a customer, we will not only lose our potential customer but the image and reputation will become a question mark.


The bursting of the dotcom bubble has made several companies realise that doing business on the Internet is not as easy as it sounds. Undoubtedly, the power of the Internet to reach any part of the world holds tremendous potential for enhancing international trade and boosting global economy. However, just as every coin has a flip side, we have seen that doing business on the Internet also has risks and legal issues associated with it. The rapid pace of E-Commerce development has generally left the legal system struggling to keep up. In much the same way as companies doing E-Commerce must invent new business procedures and rules, the legal system is trying to adapt existing laws to fit new settings where it is simply unclear how these laws will apply. In the midst of this legal confusion, India is one of the few countries across the globe that has enacted an E-Commerce legislation. However, much more is needed to effectively regulate the tangled web.

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