In the United States, there are several local, state and federal laws that govern the conduct of e-commerce businesses. ( Stimmel, Stimmel & Roeser, 2021) These include:
- Federal laws such as Digital Millennium Copyright Act govern against pirating and other unauthorized software use
- The Electronic Signatures in Global and National Commerce Act that validates contracts executed via electronic signatures as well as protecting consumers.
- The Uniform Computer Information Transactions Act (UCITA)
- The Uniform Electronic Transactions Act (UETA)
Generally, in the United States e-commerce and non e-commerce businesses are treated in the same manner legally. ( Stimmel, Stimmel & Roeser, 2021) Business owners have the right to refuse service to certain consumers for legitimate reasons. Most businesses even have a sign pointing out that they reserve the right to refuse service. Some reasons upon which an individual can deny service to another are
- When a customer is rowdy and disruptive.
- When there are safety concerns in terms of health, security and violation of health codes
In Hessians Motorcycle Club v. J.C. Flanagans (2001) ( Justia US Law, 2001) a sports bar denied admittance to members of motorcycle clubs when they refused to comply with the bar’s policy requiring them to remove their “colors”. The excluded members sued, on grounds of violation of their rights under the Unruh Civil Rights Act. The court found no Unruh Civil Rights Act violation and entered judgment for the bar. In this case, the sports bar was within its right to deny service to the members.
However, there are limits on when one can refuse service to consumers and customers. These limitations are provided for in anti-discriminatory laws in the united states.
There are many anti-discrimination laws in the United States which the government can invoke to control any discrimination by e-commerce businesses. (Cozen O’Connor,2020) These include
- The civil rights act of 1965 forbids discrimination the basis of color, religion sex or national origins. Under title VII of this law, no business is to deny service to a customer based on the above classes.
- The Americans with disabilities act prohibits discrimination to people who are disabled or handicapped making it illegal to refuse service on public forums and amenities.
- The Unruh Civil Rights Act-Section 51(b), provides that: “All persons within the jurisdiction of this state are free and equal, and no matter what their sex, race, color, religion, ancestry, national origin, disability, or medical condition are entitled to the full and equal accommodations, advantages, facilities, privileges, or services in all business establishments of every kind whatsoever.
Therefore, declining service to anyone must be reasonable and justifiable. X-Bay cannot refuse service to groups it disagrees with as disagreement is not a reasonable or justifiable ground upon which anyone is to be refused service.
In Domen v. Vimeo, Inc, ( Justia US Law, 2021) Church United sued Vimeo, on grounds of discrimination against them by deleting Church United’s account from its online video hosting platform. Plaintiffs claimed that the discrimination was based on sexual orientation and religion under federal and state law. The district court concluded that Vimeo deleted Church United’s account because of its violation of one of Vimeo’s content policies barring the promotion of sexual orientation change efforts (SOCE) on its platform. This is to show that an online platform has the right to set up its own rules and violation of the same gives the platform a right to remove or deny service. Therefore, CrapCast, as part of its terms and conditions, has the right to monitor, read, and record all Internet traffic; to block and/or slow down any Internet traffic and/or sites that it disagrees with.
On the other hand, X-Bay has the right to exclude any products that they deem low quality from their platform. X-Bay also has a right to set the minimum price upon which products are sold within their platform.
Online platforms do not necessarily have to invest directly in the production and supply of goods that they offer online. They can rely on third parties and concentrate on handling all the orders, accepting of payments, and shipping of products.( Caroline Cauffman, 2021) When they choose to act as intermediaries between product providers and consumers, they assume liability for any defects to goods offered herein.
In Bolger v. Amazon.com LLC( Justia US Law, 2020) ,” the plaintiff bought a replacement laptop computer battery on the online shopping website operated by Amazon.com. The listing for the battery identified the seller as “E-Life,” a fictitious name used on Amazon by Lenoge Technology (HK) Ltd. (Lenoge). Amazon charged the plaintiff for the purchase, retrieved the laptop battery from its location in an Amazon warehouse, prepared the battery for shipment in Amazon-branded packaging, and sent it to plaintiff. Later on, the battery exploded several months later, and the plaintiff suffered severe injuries. The plaintiff consequently sued Amazon and several other defendants for strict products liability, negligent products liability, breach of implied warranty, breach of express warranty, and “negligence/negligent undertaking.” Lenoge was served but did not appear, so the trial court entered its default. Amazon then moved for summary judgment, arguing primarily that the doctrine of strict products liability, as well as any similar tort theory, did not apply to it because it did not distribute, manufacture, or sell the product in question. It claimed its website was an “online marketplace” and E-Life (Lenoge) was the product seller, not Amazon. The trial court agreed, granted Amazon’s motion, and entered judgment accordingly. The plaintiff appealed, arguing that Amazon was strictly liable for defective products offered on its website by third-party sellers like Lenoge. In the circumstances of this case, the Court of Appeal agreed and reversed: “Amazon placed itself between Lenoge and the plaintiff in the chain of distribution of the product at issue here. Under established principles of strict liability, Amazon should be held liable if a product sold through its website turns out to be defective. Strict liability here “affords maximum protection to the injured plaintiff and works no injustice to the defendants, for they can adjust the costs of such protection between them in the course of their continuing business relationship.” Likewise, X-Bay by placing itself between consumers and product providers assumes strict liability to any injuries or defective products that might be offered in the website.
- Stimmel, Stimmel & Roeser. Laws Pertaining to Commerce on the Internet. Journal homepage: https://www.stimmel-law.com/en/articles/laws-pertaining-commerce-internet.
- Justia US Law. Hessians Motorcycle Club v. J.C. Flanagans (2001). Journal homepage: https://law.justia.com/cases/california/court-of-appeal/4th/86/833.html
- Cozen O’Connor. Digital Business Laws and Regulations. Journal homepage: https://iclg.com/practice-areas/digital-business-laws-and-regulations/usa
- Justia US Law. Domen v. Vimeo, Inc., No. 20-616 (2d Cir. 2021). Journal homepage: https://law.justia.com/cases/federal/appellate-courts/ca2/20-616/20-616-2021-03-11.html
- Caroline Cauffman. Platform liability for unsafe products sold by third party sellers. Journal homepage: https://www.maastrichtuniversity.nl/blog/2021/10/platform-liability-unsafe-products-sold-third-party-sellers
- Justia US Law. Bolger v. Amazon.com, LLC. Journal homepage: https://law.justia.com/cases/california/court-of-appeal/2020/d075738.html
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