Legal and Ethical Issues in Online Business

632 words | 3 page(s)

When operating a business online, there are certain legal and ethical concerns that must be managed in order for a company to thrive. With an upholstery company that seeks to do business both online and in the brick and mortar realm, we will have to be conscious of some of the differences that exist between those two mediums. Specifically, when advertising online and dealing directly with customers online, we will need to recognize the ethical and legal considerations that could impact our business’s bottom line and perhaps more importantly, its reputation.

With business to consumer websites, there are ethical concerns that abound. The first has to do with the ways in which a website handles its customers’ information. We will be making direct sales to customers, so we will undoubtedly be collecting information, including home addresses, credit card information, and potentially bank account information. A website operating in this manner must offer high-level encryption technology to ensure that customers are safe while they are doing business on our website. In addition, we must have a privacy policy that we follow closely in order to ensure that our customers do not have their information sold or give away either consciously or accidently by our company.

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Likewise, a business to consumer website must be careful in how it advertises its products. We would need accurate descriptions of all products, and we would need to not oversell our items. There is some temptation to add too much advertising fluff into the website, but this can be an ethical issue, giving the customer a false impression. With business to business websites, a company should be careful to represent its position and its capabilities in a fair manner. Doing business with other businesses requires fair disclosure of a company’s production capabilities so that expectations are set at an appropriate level going into the process.

Companies must be careful in deciding who they can trust online. The general rule is to be skeptical at all times when doing business online. This means that when there is uncertainty about a situation, it is always best to err on the side of not handing out information and not completing a transaction.

In terms of email and online advertising, many of the legal concerns are the same as those faced by brick and mortar operations. Federal and state law bans false advertising, so companies have to be careful not to make outrageous claims about its products or services. There is some room built in, however, for what the legal world calls “mere puffery.” It is expected that businesses operating online or in brick and mortar will fluff up their products with positive advertising language, and though this may bump up against legal guidelines, it will not get a company into any legal trouble. Where a company can get into trouble is with its factual claims. If an upholstered item has one type of fabric and the website claims that it has a different type of fabric, that can be problematic from a legal standpoint.

One area where the web business will have to be careful is in borrowing content online. There are fair use standards that allow companies to use certain items online as long as the content is attributed properly. The problem for our business website, however, is that fair use guidelines can sometimes bar businesses from using online content for commercial purposes. This means that copying online content could lead to a copyright claim. Even more concerning is the situation with pictures. When putting together a website, we will obviously need pictures both for our various pages and for our actual products. We would be wise to produce our own pictures, as “borrowing” pictures already placed online could get our company’s website in serious copyright trouble.

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