Our legal guide for online businesses explores how e-commerce has reshaped the way companies operate, bringing both opportunities and legal challenges.
Whether you're launching a startup or expanding an established business online, it’s important to get the legal essentials right to protect your brand and stay compliant.
From contracts and intellectual property to data protection and consumer rights, there are key legal considerations every online business should address. This article outlines common issues, but tailored legal advice can help ensure your business is fully protected. Our commercial solicitors are here to support you with practical, expert guidance.
Jump to:
Do you have contracts for setting up and running your website?
Let’s start with the basics - covering your business when you are getting your website set up and running. In this case, you’ll need clear and robust contracts, which may include:
Web development contracts
If your business hires a web developer or commissions custom software, make sure the contract covers important issues to protect yourself, such as:
- Function, performance, branding, and design specifications.
- A delivery timetable with milestones for testing and launch, plus provisions for delays.
- Acceptance testing and user feedback.
- Provisions transferring intellectual property ownership rights in the website you have commissioned from the developer to your business.
If your business uses platforms with standard terms, you should review them carefully to ensure you know what you’re signing up for and take legal advice on them if you’re unsure.
Website hosting contracts
Any hosting agreements your business enters should include key terms such as:
- Security, maintenance, support, and disaster recovery provisions.
- Reporting, speed, and availability standards.
Do you have well-drafted legal documents for your website?
A range of key legal documents might be necessary when your business operates online via a website.
The most common ones include:
- A privacy policy: UK GDPR requires every business processing personal data as a controller to provide information about it transparently to individuals. You should give a website privacy policy that clearly explains your data processing, which is compliant and tailored to your business and its practical use of personal data.
- A cookie policy: Cookie law rules require your business to provide information on the use of cookies and obtain consent before placing cookies on a user’s device. Many companies achieve this using a cookie policy and cookie banner to obtain consent.
- Website terms of use and acceptable use policy: These outline how people can access, use and interact with your website. They typically cover rules for how visitors may use your site and its content to maintain control of your business. You can also add disclaimers to protect your business from risk and rules about using user-generated content (e.g. letting you remove certain types of content). These terms are essential to help protect your website and content, e.g. from unacceptable behaviour and unauthorised access.
- Terms and conditions for sales: If your business sells goods or services online, you’ll need robust contractual terms to govern these sales and protect your business from risk. It’s vital to ensure your online sales terms are bespoke, fit for purpose and compliant – a lawyer can help you with this.
Are you protecting your intellectual property online?
Protecting your intellectual property and brand online requires careful attention to a lot of issues, for instance:
- Be careful when your business picks its name. Research thoroughly to avoid similarities with other companies in the same sector. Search the UK Intellectual Property Office trademark database to confirm availability. After clearing your search, check for similar domain names to ensure your customers can easily find you.
- Once your business registers its name as a trademark, challenge competitors or other companies using a similar name or domain.
- When developing your website’s content, ensure all content is original, including copy and images. Use royalty-free, public domain, or licensed images and credit authors when required.
- Although no special symbols are needed to show copyrights exist, adding copyright notices can warn users about your intent to protect your rights. You can also add provisions in your website terms of use to protect your business’s intellectual property.
- When hiring web designers or developers, negotiate a contract that transfers all relevant intellectual property rights in the website’s code and design to your business. The contract must also protect your business against copyright infringement, so you should look to negotiate indemnity clauses to protect yourself from risk.
What compliance rules could apply to your website?
Your website may fall under various compliance rules depending on your offering and customer base.
A few common examples include:
- Data protection rules: Running a website often involves collecting data from individuals (e.g., usernames, contact details, browser information, IP addresses) as a data controller. As a data controller, you have a responsibility to protect personal data so your business must follow UK GDPR rules, including a host of rules on data minimisation, data security, and privacy by design.
- Consumer protection rules: If your business engages in ‘distance selling’, you’ll need to ensure compliance with consumer law and distance selling rules, which include key consumer protections such as the need to offer clear pre-contract information and cooling-off periods for consumers.
- Rules and guidance for protecting children online: If your business interacts with children, you must comply with other legal rules, such as data protection law rules and the Information Commissioner's guidance on data protection when processing personal data about children.
The Online Safety Act 2023 also introduces rules to prevent illegal or harmful material for many online businesses. Ofcom enforces compliance and can issue fines of up to 10% of global turnover for breaches. If your business falls under its rules, you must monitor your obligations carefully and ensure you comply.
Protecting your online business
Running a website involves addressing various legal issues – from compliance to risk. What your business needs to do will depend on practical factors, such as how you develop your website, who creates your content, which types of customers your business targets (i.e. B2B or B2C, adults or children), and whether your business tracks user behaviour. These factors will dictate the legal requirements you need to tackle.
If your business gets this wrong, it could lead to intellectual property disputes, regulatory fines and customer claims. As such, you should conduct a thorough legal review of your online activities and adopt a proactive approach to ensure compliance and minimise risks.
Our commercial law, IP, and data protection teams are here to help your business meet all its obligations and mitigate key risks so you can have comfort and confidence when trading online.
