By ProBlogger Law Expert Jeanette Jifkins.
Imagine you are sitting in your home office working on your blog. Your domain name is hosted with GoDaddy in Delaware in the United States, your website content is hosted with a local provider. You’re using Mailchimp as a CRM which is based in Georgia in the United States. You have PayPal set up and your clients or customers are 50% your own country and 50% everywhere else. You might also have advertising, affiliate agreements, use a hosted online store, or have a drop ship arrangement out of Asia.
What laws apply?
Back in 2009 a games Blogger in the United Kingdom suggested that there was some inappropriate behaviour by the company behind the online game Evony. The people at Evony got upset and decided to sue. At that time Evony was a Delaware company (and probably still is). When they did start proceedings, the court action was in Sydney, Australia and relied upon the defamation laws of New South Wales.
The Australian law was chosen as part of what is called a ‘forum shopping’ exercise to find where might be the most favourable laws for the person making the claim. The argument as to why the action could be brought in Australia was that the blog was read in Australia, and so that is where the damage to Evony’s reputation occurred. Leaving aside that defamation is generally only for the protection of individual reputations and not corporate reputations, Evony withdrew the court action after its online community threatened to boycott the game, so we never got to see the end result. It does go to demonstrate however, that forum shopping is a potential risk.
Where you are in the world makes a difference to what you are liable for – so what can you do about it?
Courts look at different things before they decide which law actually applies. You can help make it easy by specifically stating that your local law applies to your blog. This doesn’t mean that a court wouldn’t make a different decision, but it does mean that anyone looking to start court action against you will think twice before trying. They will have to prove that some other law should apply rather than the law you chose.
How cool (literally) would it be to say your blog was governed by the laws of Antarctica? (Technically Antarctica is divvied up and ‘governed’ by a collection of nations, but you get the idea.) It might be cool, but it wouldn’t be clever.
If you did face legal action, you’d want to be able to speak with someone in your own language, with an understanding of what laws are like to apply, so they might be able to help you. Nominating the law of a country where you know little about their culture and nothing about their laws isn’t helpful, and unless you can show some form of connection to you or your blog, not likely to be applied by the court.
If you are selling anything, be it a membership, a product or a service (including advertising) through your blog, then you have an obligation to comply with consumer protection laws. These laws cover things like:
- misleading and deceptive advertising
- component pricing (think phone plans per month with minimum 24 month sign up)
- whether or not products or services meet the description
- refund policies
- timely delivery of products or services
There are international treaties about consumer protection laws. These are the laws enforced by the Federal Trade Commission (FTC) in the United States, the Australian Competition and Consumer Commission (ACCC) in Australia and Trading Standards in the United Kingdom. As long as you comply with the consumer protection laws where you live, you are likely to be complying with the consumer protection laws where your customers are. If you do, there is little risk that you will run in to trouble.
However, if most of your sales are happening in a foreign country, you might want to get a review of the way you are promoting your products and services to ensure you aren’t unnecessarily putting yourself at risk.
Another way to reduce your risk is to consider local registration and hosting.
Domain Name Registration
Domain name registration is provided on a “first come, first served” basis, which is why so many people are able to cyber squat on domain names they are not using. If you are able to demonstrate that you have a registered trade mark, or other enforceable right in a name, then you may be able to get a court order to require the cyber squatter to hand over the domain name. Some registrars will take action if you can show a trade mark interest, but most will refer you to a dispute resolution body and ask you to produce an order before they will take action.
The law governing the registration of your domain name will be whatever law your provider nominates. You can challenge which laws apply but it would be expensive and may not be successful. If you use a registrant and hosting provider local to you, you have the comfort of knowing that local laws will apply.
Let’s have a look at what this means for you.
There are some companies that think they have worldwide rights to everything, mostly based in the United States. It is not uncommon for a U.S. company to challenge a domain name owner in another country to hand over the domain name if they believe it has anything to do with their business.
I recently had an example were a company in the U.S. issued a letter of demand on an Australian company simply because the domain name was similar, and ended with a .com rather than a .com.au. If you use a .com domain name registered in the U.S., it is easier for a U.S. company to challenge your right to use it. This is because a U.S. based registrar is likely to follow a U.S. court order.
However, if your domain name is not registered in the U.S. and is instead registered in your country, where you can demonstrate that you have an existing reputation and brand, they have to come to your country to obtain an order that will be binding on the local registrar. This is a much more expensive exercise for them.
Hosting and CRMs
The importance of working out where your website content, and particularly any customer relationship management (CRM) system content is stored, can affect your privacy obligations. The European Union recently passed new Data Protection laws that will gradually come in to effect over the next couple of years. Those laws cover any business who collects personal information about E.U. citizens, not matter where in the world you are. The penalties for breach of those laws are significant – up to 4% of worldwide annual revenue (not profit).
One of the reasons new data protection laws were introduced was as a result of concern about how companies like Facebook were storing and using customer data. In addition, the E.U. parliament was concerned that U.S. spy agencies would have open access to personal information of E.U. citizens held by U.S. companies.
5 Quick Steps to Protect Your Blog
- Consider moving your domain name registration to a local registrant
- Consider moving your hosting and other data storage to your country
- Check out your local consumer protection laws and make sure you comply