A few years ago, e-commerce was an uncharted territory for many. Today, e-commerce has become the backbone of countless businesses and continues to grow. However, the legal rules governing e-commerce are still unfamiliar to many businesses. Selling online is not just about a smooth checkout and proper marketing; it also comes with legal responsibilities that protect both the businesses and their consumers. Ignoring these laws can lead to fines, lawsuits, and even reputational damage. As such, understanding e-commerce laws is critical.

The Federal Trade Commission (FTC) Act

The FTC Act falls under consumer protection laws. It prohibits unfair or deceptive business practices, and as an e-commerce business owner, you cannot overlook it. If you sell or advertise products online, the FTC is watching.

For example, if you usually collect and email customers, the law requires that you have truthful subject lines, proper identification of marketing emails, and an easy way for recipients to opt out. In case you have a website that allows reviews, you should also be aware that there’s a law called the Consumer Review Fairness Act that protects customers’ right to post honest opinions, including on social media. If you penalize or silence negative reviews, this can put your business at risk.

Additionally, when it comes to advertising, false claims, misleading discounts, or fake reviews can land you in trouble with the FTC. The FTC has the power to investigate businesses, examine their practices, and issue fines if violations occur.

To remain compliant, ensure that you are transparent in advertising, honoring guarantees, maintaining clear policies, and regularly reviewing how your business operates.

PCI DSS: Protecting Payment Data

If your store accepts credit or debit card payments, the Payment Card Industry Data Security Standard (PCI DSS) isn’t optional. You must ensure that the cardholder’s data is secure by having safeguards like secure networks, restricted access, regular vulnerability testing, and system monitoring.

Failing to comply not only increases the risk of data breaches, but it can also lead to penalties or loss of the ability to access card payments.

Inform Consumers Act

The INFORM Consumers Act is a law that was passed in 2023, which targets counterfeit products sold on online marketplaces. If you sell through platforms like Etsy or Amazon, this law requires transparency about seller identities and contact information once you meet certain sales thresholds.

Privacy Laws

Privacy compliance is non-negotiable in e-commerce. If you use tools like Google Analytics, email marketing, or social media pixels, you’re sharing customer data with third parties, and that must be disclosed. Failing to maintain an adequate privacy policy can result in fines of up to $2,500 per violation, and sometimes this is calculated per visitor.

Additionally, there are specific privacy laws that may apply depending on your audience. For instance, the Children’s Online Privacy Protection Act (COPPA) restricts collecting data from children under 13 without parental consent, while the Health Insurance Portability and Accountability Act (HIPAA) may apply to health-related e-commerce.

Running an online store does not exempt you from legal obligations. To avoid costly mistakes and unnecessary legal headaches, it is best to consult an attorney to help you stay compliant.

Contact the Consumer Data Privacy and Compliance Attorneys at Revision Legal

For more information, contact the experienced Consumer Data Privacy and Compliance Lawyers at Revision Legal. You can contact us through the form on this page or call (855) 473-8474.

The Electronic Communications Privacy Act and Consumer Data Collection

The Electronic Communications Privacy Act (ECPA, 18 U.S.C. § 2510 et seq.) governs the interception of electronic communications and the disclosure of stored communications. For e-commerce businesses, the most relevant provisions concern tracking technologies — session replay scripts, keystroke logging, and behavioral analytics tools that capture what customers do on your website. Several class-action lawsuits have been filed in recent years arguing that certain website tracking technologies constitute illegal wiretapping under ECPA and state wiretap laws, particularly California’s Invasion of Privacy Act (CIPA, Cal. Penal Code § 630 et seq.).

CIPA requires all-party consent for the recording or monitoring of communications, and courts have increasingly held that session replay and chat interception tools capture “communications” within the statute’s scope. Retailers using third-party analytics tools that record user sessions without adequate disclosure have faced substantial class-action exposure. The practical compliance requirement: your privacy policy must disclose the tracking technologies you use, what data they capture, and how that data is shared with third parties. For California-facing sites, a CIPA-compliant disclosure or opt-in mechanism for session replay technologies may be necessary to avoid class-action risk.

The CAN-SPAM Act: Email Marketing Compliance

The Controlling the Assault of Non-Solicited Pornography and Marketing Act (CAN-SPAM Act, 15 U.S.C. § 7701 et seq.) establishes requirements for all commercial email. The requirements are specific: your “From” and “Subject” fields must not be deceptive; the email must identify itself as an advertisement (with limited exceptions for transactional messages); it must include a valid physical postal address; it must include a clear and conspicuous opt-out mechanism; and opt-out requests must be honored within ten business days. Violations carry penalties up to $51,744 per email.

CAN-SPAM applies to all commercial email — promotional emails, newsletters, abandoned cart reminders, and win-back campaigns. It does not require prior opt-in consent (unlike the GDPR and Canada’s CASL), but it does require immediate and permanent opt-out compliance. E-commerce businesses that use email marketing platforms should configure automatic suppression of opt-outs, audit their unsubscribe flows to confirm they work on mobile and desktop, and maintain a suppression list. One common failure: a customer unsubscribes from a general list, but transactional email unsubscribes are processed separately, resulting in continued promotional sends. That gap constitutes a CAN-SPAM violation.

Sales Tax, Nexus, and South Dakota v. Wayfair

The Supreme Court’s 2018 decision in South Dakota v. Wayfair, Inc., 585 U.S. 162 (2018), eliminated the physical presence requirement for sales tax nexus, replacing it with an economic nexus standard. A state can now require an out-of-state online seller to collect and remit sales tax if the seller exceeds a threshold of economic activity in that state — typically $100,000 in sales or 200 transactions annually. All 45 states with a sales tax have enacted economic nexus laws since Wayfair.

For e-commerce businesses selling nationally, this means sales tax compliance across potentially dozens of states. Failure to collect and remit creates liability for the uncollected tax, interest, and penalties — and can result in state tax authority audits. Marketplace facilitators like Amazon and Etsy are generally required to collect and remit sales tax on behalf of third-party sellers, but sellers using their own storefronts bear this obligation directly. Automated sales tax software (TaxJar, Avalara, or equivalents) integrated into your checkout process is no longer optional for businesses with multi-state sales volume — it is a legal necessity.

The Americans with Disabilities Act and Website Accessibility

Title III of the Americans with Disabilities Act (ADA, 42 U.S.C. § 12182) requires places of public accommodation to be accessible to individuals with disabilities. Courts and the Department of Justice have consistently held that websites of businesses covered by Title III must be accessible to users with disabilities, including those who use screen readers, rely on keyboard navigation, or have visual impairments that require captioning. The DOJ issued final regulations in April 2024 (28 C.F.R. Part 36) adopting WCAG 2.1 Level AA as the technical standard for web accessibility compliance.

ADA website accessibility lawsuits against e-commerce businesses have been filed in the thousands annually for the past several years. Plaintiffs (and their attorneys) send demand letters and file suits in high-volume fashion, particularly in federal courts in New York and California. A finding of non-compliance can result in injunctive relief (mandatory accessibility remediation) and attorney fees. An accessibility audit of your storefront — testing with actual screen reader tools like JAWS or NVDA, reviewing alt text on product images, ensuring keyboard navigability, and checking color contrast — is the first step toward compliance. Ongoing compliance requires accessibility testing to be part of every site update cycle.

Children’s Online Privacy: COPPA and the 2024 Updates

The Children’s Online Privacy Protection Act (COPPA, 15 U.S.C. § 6501 et seq.) requires verifiable parental consent before collecting, using, or disclosing personal information from children under 13. The FTC’s revised COPPA Rule (16 C.F.R. Part 312), updated in 2024, tightened requirements in several respects: it expanded the definition of personal information to include biometric identifiers, expanded coverage to cover third-party services integrated into child-directed platforms, and prohibits conditioning service on children providing more data than necessary. Civil penalties can reach $51,744 per violation.

COPPA applies to websites and online services directed to children under 13, and also to general-audience sites that have actual knowledge they are collecting data from children. E-commerce businesses that sell products appealing to children — toys, clothing, video games — must evaluate whether their marketing and data collection practices implicate COPPA. Even a general-audience site that offers a loyalty program requiring account creation must consider whether children are registering and what data is being collected. The e-commerce attorneys at Revision Legal advise online businesses on compliance with the full spectrum of internet commerce laws. Contact us through our contact page or visit our internet law practice for a compliance assessment.