In my last posting, I talked about a Time Magazine article in which Josh Quittner discussed the new internet boom in which founders of low-cost internet start-ups can get rich slowly with nothing more than a good idea, a laptop, and hard work.
As the business transactions attorney that I am, I of course could not resist highlighting legal issues to which even a low-cost internet start-up should pay attention. I previously discussed the necessity of (i) an agreement among the co-founders, (ii) a web host development agreement, and (iii) securities law compliance. In this posting, I’ll finish my discussion of website audits.
Website Audits
You’ll want to verify that nothing offered through your website is going to get you in trouble. A website audit might include a review of the following issues:
- Website Terms of Service. Your Website Terms of Service or Website Terms and Conditions can form a binding contract with visitors to your website if properly formatted. If your website takes subscribers or licenses information, your TOS might take the form of an end user license agreement (EULA).
- General Privacy Policy. There are currently no federal requirements to post a privacy policy as long as your site does not take personal information from children under thirteen. However, some states are becoming more aggressive in demanding privacy policies and procedures of websites. Hence, it may be prudent to post a privacy policy if you will be collecting, using, and/or selling personal information about your online visitors.
- COPPA. Sites targeted to children under thirteen must comply with the Children’s Online Privacy Protection Act. Failure to comply has generated fines from the Federal Trade Commission of up to $1 Million.
- Copyright. Analysis of any copyright or other legal issues raised by images, written materials, and other content provided by third parties.
- User-Generated Content. If your website invites visitors to submit content, you will want to take steps to minimize the risks of user generated content (UGC) including taking advantage of the safe harbors offered by the Digital Millennium Copyright Act.
- Trademark. Analysis of whether your domain name raises any legal concerns (e.g., trademark infringement) and whether it can or should be registered as a trademark.
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