eCommerce legal obligations, advertising, branding, domains and content

Running an online store removes much of the friction of traditional retail, but it does not remove the law that applies to it. Every eCommerce business that sells to Australian customers operates under the Australian Consumer Law (ACL), which is Schedule 2 of the Competition and Consumer Act 2010 (Cth). The ACL sets one overriding standard: s 18 provides that a person must not, in trade or commerce, engage in conduct that is misleading or deceptive, or is likely to mislead or deceive.

Most complaints, disputes and regulator actions that reach online businesses trace back to that single provision, applied across four practical areas: how you advertise, how your website and branding look, the domain name you trade under, and the third-party content you copy, link to or frame. This article sets out what the law requires of you in each of those areas, who the obligations apply to, and what happens if you fall short.

Who these obligations apply to

The trigger for the ACL's misleading conduct rules is conduct "in trade or commerce". If you sell goods or services online, you meet that test. The obligations apply regardless of how small your business is, so these are the areas where online stores most often get caught:

No size threshold: there is no turnover test, no employee count and no exemption for a side business. A store run from a spare room is as bound by s 18 as a national retailer.
Any selling channel: the obligations cover your website, marketplace storefronts, social media pages, email marketing and checkout pages. Conduct on any of them is conduct in trade or commerce.
Consumer and business customers: s 18 protects consumers and other businesses alike. Misleading another trader, for example with false claims about wholesale stock, is just as much a breach.
Intent does not matter: it is well established that a business does not need to intend to mislead anyone. The question is whether the conduct is objectively misleading or likely to mislead, judged through the eyes of the ordinary reasonable customer.

The ACCC and state and territory fair trading agencies enforce the ACL, and competitors can also bring private claims. With that scope in mind, here are the four obligations that matter most for an online store.

Keep advertising and product claims honest

The first obligation is to make sure everything you say about your products is accurate and capable of being substantiated. Section 18 catches misleading conduct generally, and s 29 of the ACL goes further by prohibiting specific false or misleading representations about goods or services, made in connection with their supply or promotion. That includes representations about a product's standard, quality, value or grade, whether goods are new, the price, the place of origin, the availability of repairs or spare parts, and the existence or effect of guarantees and other consumer rights.

Online stores trip over s 29 in predictable ways:

Discounts that are not real: Advertising a "was" price that was never actually charged, or inflating the original price to make a sale look bigger, is a false price representation.
Hidden charges: A headline price that leaves out GST, delivery or a compulsory surcharge can mislead, because customers reasonably expect the advertised price to reflect what they will pay.
Stock and delivery claims: Advertising items as available, or promising delivery times, when you cannot meet them is misleading if customers rely on the claim.
Fake or bought reviews: Publishing testimonials is caught by s 29(1)(e) and (f), and the ACL treats a published testimonial as misleading unless you can show it is genuine. The ACCC's guidance is that you should not post fake reviews, pay for them, or offer incentives without disclosing them.
Guarantees: You cannot tell customers that your returns policy replaces their rights under the ACL, and you cannot describe refunds or repairs in a way that suggests they are discretionary when the law gives customers automatic guarantees.

The standard is simple: every claim on your site should be true, and you should be able to prove it. If the ACCC questions a claim, it can require you to substantiate it, and an unsubstantiated claim is treated as a breach.

Keep your branding and website design clear of other businesses

The second obligation is to make sure your branding and website design do not suggest an association with another business that does not exist. A website that imitates another business's logo, get-up or overall design can mislead customers into believing the two businesses are affiliated. That is a breach of s 18, and representing that you have another business's sponsorship, approval or affiliation is also a specific breach of s 29(1)(g) and (h).

This is also where the common law tort of passing off bites. Passing off protects the reputation and goodwill a business has built up in its name, brand or get-up. In Moorgate Tobacco Co Ltd v Philip Morris Ltd (No 2) (1984) 156 CLR 414, the High Court confirmed that a business claiming passing off generally needs to establish three things: that it has reputation or goodwill in its goods or services, that the other party has made a misrepresentation that leads customers to believe the goods or services are the claimant's or connected with it, and that the claimant has suffered, or is likely to suffer, damage.

For an online store, the practical effect is this:

Run a clearance check before launch: Search for existing business names, trademarks and established brands that your proposed name, logo or domain could be confused with.
Do not imitate a competitor's look: A similar logo, colour scheme, product imagery style or overall layout can mislead even where nothing is copied word for word.
Do not use another business's name to attract its customers: Using a competitor's name in your meta tags, keywords or ad copy to pull in their traffic can be misleading conduct and passing off.

The intention point applies again here. You do not need to have set out to trade on another business's reputation; if the ordinary customer would be confused about who you are or who you are connected with, the conduct is misleading.

Choose and use your domain name carefully

The third obligation concerns the domain name you trade under. A domain name is conduct in trade or commerce, so using another business's name or trademark as your domain can mislead customers about affiliation, and a domain that promises attributes that are not true can mislead as well.

Disputes over .au domain names are commonly resolved through the .au Dispute Resolution Policy (auDRP), administered by auDA. A complaint succeeds only if the complainant establishes all three of the following:

Confusing similarity: The domain name is identical or confusingly similar to a name, trademark or service mark in which the complainant has rights.
No legitimate interest: The registrant has no rights or legitimate interests in the domain name.
Bad faith: The domain name was registered or subsequently used in bad faith.

The auDRP gives examples of bad faith. They include registering a domain name primarily to sell or transfer it for more than your out-of-pocket costs, registering it to stop the owner of a name or mark from using it, registering it to disrupt another business, and using it to attract internet users for commercial gain by creating confusion with the complainant's name or mark.

A successful auDRP complaint results in the domain name licence being cancelled or transferred to the complainant. It is designed as a cheaper, speedier alternative to litigation, with filing fees starting at around $2,000 for a single-panellist case covering up to five domains. Panel decisions are binding with no internal appeal, though either party can still take the dispute to court. Court action remains open in any event, through misleading conduct under s 18, trade mark infringement and passing off.

To stay on the right side of this obligation:

Search before you register: Check trademarks and business names for anything your proposed domain is identical or confusingly similar to, including misspellings of established brands.
Use the domain for a genuine business: Registering domains to squat on them, block competitors or divert their traffic is exactly the behaviour the auDRP treats as bad faith.
Do not over-promise: A domain like "free-dog-food.com.au" attached to a site that charges money is itself a misleading representation.

Do not copy other websites' content, and be careful with links and framing

The fourth obligation is about the content you put on your site and how you present other people's content. Text, product photos, graphics and even website code are protected works under the Copyright Act 1968 (Cth). Section 36 of that Act provides that copyright in a work is infringed by a person who, not being the owner and without a licence, does in Australia any act comprised in the copyright, which includes reproducing the work. In practice that means you cannot copy product descriptions, images, photographs or design elements from another website onto your own without permission, and crediting the source does not make copying lawful.

Links and framing are different, and the distinction matters. A plain hyperlink to another website generally does not infringe copyright, because linking does not reproduce the work. Framing, which displays part of a third party's website inside your own page, also does not of itself copy the content, because the content is still served from the other site's servers. The real risks with framing and some linking practices are these:

Presenting another business's content as your own: If your site frames a competitor's product information, reviews or pricing so that it appears to be your content, that is misleading conduct under s 18 and can support a passing off claim.
Diverting traffic and advertising revenue: Framing or embedding another site's content can pull its visitors and advertising income away from it, which is a practical and legal grievance for the affected business.
Actual copying: The moment you download, store and republish content, or scrape a site to rebuild its data on yours, you are reproducing the work and infringement under s 36 is engaged.

The safe approach is to create your own copy and imagery, or use properly licensed stock and photography. If you want to use a third party's photo, video or text, ask for permission first. If you embed or link to another site, make it clear to customers that the content belongs to that site, not to you.

What happens if you get it wrong

The consequences of breaching these obligations are serious enough that they should shape how you run the store. False or misleading representations under s 29 sit in Part 3-1 of the ACL, and s 224 sets the maximum pecuniary penalties. For a body corporate, the penalty for each contravention is the greater of $100 million, three times the value of the benefit obtained from the conduct, or 30% of the corporation's adjusted turnover. Individuals face penalties of up to $2.5 million.

Section 18 itself does not carry a pecuniary penalty, but it is far from toothless. A court can make orders including injunctions to stop the conduct, declarations, damages, and compensation orders for affected consumers under the ACL's remedies provisions. The ACCC regularly pursues these. In one recent matter it brought, Uber was ordered to pay $21 million in penalties for misleading representations about fares and cancellation fees made in its app and on its website. Kogan paid $350,000 for a misleading tax-time promotion, and Telstra's Belong brand was fined $18 million over broadband speed claims. Beyond penalties, a competitor harmed by passing off or misleading conduct can seek injunctions and damages, and an adverse court finding is damaging to customer trust in its own right.

Compliance checklist for your online store

A practical review of your store against these obligations covers the following:

Audit your claims: Go through every advertisement, listing and product page and identify any claim you cannot substantiate with records.
Check your prices: Make sure advertised prices include all charges the customer will pay, and that discounts and "was" prices are genuine.
Verify your reviews: Publish only genuine reviews, disclose any incentives, and never post or pay for fake ones.
Review your branding: Confirm your name, logo, get-up and domain do not imitate another business or imply an affiliation that does not exist.
Check your content: Use only your own or properly licensed text, images and design, and label links and embedded content clearly.
Keep your records: Retain the evidence behind your claims, because the burden of substantiation can fall on you.

When you need a lawyer

Much of this is achievable in-house, but some points justify professional help. Before launch, a lawyer can run trademark searches and clearance on your name, logo and domain, and can review your terms, returns policy and privacy statements against the ACL. If your store receives a cease and desist letter alleging trade mark, copyright or passing off issues, or if an auDRP complaint is filed against your domain, respond quickly, because the response window is short. A lawyer can assess whether the claim has substance, draft your response and negotiate. The same applies in reverse: if a competitor is copying your branding or content, a lawyer can assess your position, gather evidence of your reputation and damage, and decide whether the auDRP, a trade mark action or a passing off claim is the right route.

Audit for implied affiliations first

If there is one obligation online stores miss most, it is not the obvious false claim. It is the implied affiliation: a lookalike logo, a domain that echoes a bigger brand, product photos borrowed from a supplier's catalogue, or an embedded feed that makes another business's content look like your own. Each can breach the "likely to mislead" standard in s 18 even though nobody intended to deceive anyone, because the test is objective and the ordinary reasonable customer is the judge.

The first action to take this week is to walk through your store, from your ads and product pages to your checkout, domain and imagery, and ask where a reasonable customer could infer an association with another business that does not exist, or where a claim lacks support. Fix or remove those elements now, before a customer, a competitor or the ACCC points them out for you.