Whether you’re a neophyte entrepreneur of a start-up or an owner of a large-scale business, there’s one thing you cannot escape: regulations. It’s worth knowing your way around these so your business stays protected. Here’s why your knowledge of these regulations is critical to achieving success in your business.

The importance of knowing legal regulations and compliances in e-commerce

While the e-commerce field is highly lucrative, it comes with a long list of regulations that you must be familiar with. Especially when you have customers from all over the globe, you have to be certain that you follow local and international regulations and avoid skirting around them. 

If you want to expand your e-commerce business, you cannot afford to break the rules. Complying with the rules and regulations allows businesses to establish trust with the community – which can uplift their brand and convey a positive image. Plus, regulations do not only protect the customers, but also business owners. 

The legal regulations and compliances e-commerce business owners must know

Regardless of a company’s industry, all businesses have to follow the regulations. And especially in the field of e-commerce where you’re not always limited to the local market, it’s worth knowing more about the regulations that you must comply with. Here are some of the legal regulations that e-commerce business owners must be aware of: 

GDPR 

With a lot of personal information involved in e-commerce businesses, owners have to make data privacy and security a priority. Not only will data breaches leak sensitive information, but it also damages a company’s reputation. While not all countries have specific legislation on data privacy, Europe’s General Data Protection Regulation (GDPR) is a prime example of a law that ensures the protection of consumers’ data. Considered one of the strictest data privacy laws ever created, GDPR changed the way that personal data should be handled. This law covers all kinds of personal data – which is a broad term. That includes their name, gender, address, biometric data, and so much more. 

One of the core principles of the GDPR is data minimization. Business owners shouldn’t be requesting unnecessary data from their consumers. For instance, a business owner selling handmade crafts shouldn’t require customers to share their medical information. Other major principles of GDPR include transparency, accuracy, storage limitation, accountability, purpose limitation, and security. 

Keeping your data private and secure in the digital age can be tough. That’s why business owners can keep up their online security by hiring skilled developers. Creating secure code, implementing QA testing, using secret detection tools, and performing vulnerability assessments are just some of the many security checks that can be performed. 

COPPA

Data privacy laws vary across industries and age groups. Businesses offering children’s products, for instance, must comply with the Children’s Online Privacy Protection Act (COPPA). You can’t just collect data from children without verifiable parental consent. And before you do that, you must have an established privacy policy. 

CAN-SPAM Act

Companies engage in email marketing as part of their brand strategy. But before you start your campaign, there are regulations on email marketing that you must comply with. The CAN-SPAM Act in particular prohibits companies from sending emails with misleading headlines. The law empowers consumers by giving them the right to prevent a company from sending them commercial emails. This is why one of the requirements of this act is to include a link for recipients to unsubscribe from unsolicited emails. Once a consumer opts out of the subscription, they must be removed from the email list within 10 days. 

PCI compliance

While Payment Card Industry (PCI) compliance isn’t necessarily a law, there’s a set of standards that you must abide by when handling financial data. To become PCI-compliant, businesses must meet twelve requirements. Some of them include protecting your system against malware by regularly updating antivirus software and maintaining a firewall configuration to secure customer data. 

Consumer Review Fairness Act

An act that was birthed in 2016, the Consumer Review Fairness Act protects the consumer’s ability to share their reviews on products and services. Businesses used to prevent consumers from posting negative reviews online and even went as far as penalizing them. But, that doesn’t mean that businesses are stripped of the power to delete them. Should the reviews be false or contain confidential information, businesses can remove these reviews. 

Shipping Restrictions

If your products need to be shipped, it’s worth noting that there are restricted items. These can also differ according to the carrier. Some commonly restricted items include alcoholic beverages, drugs (prescription and OTC), perfumes, live plants, and perishables.

In Conclusion

Successfully running an e-commerce business doesn’t just mean being able to market your products and secure huge profits from doing so. It’s also about compliance with local and international regulations – of which there are many and can vary across industries. Keeping these laws in mind will not only help protect businesses and customers alike but can also prevent you from receiving hefty penalties.