Melissa Tehrani offers guidance to in-house counsel as they expand and refine e-commerce strategies
As COVID-19 continues to take a major toll across multiple sectors of Canada’s economy, one area that has flourished is, unsurprisingly, e-commerce. Statistics Canada reported that online sales came in at a record $3.8 billion in May, a year-over-year increase of 112 per cent.
While that figure has decreased in recent months as more and more businesses open their doors again, e-commerce has presented an opportunity to thrive (or at least survive) in an era defined by social distance. In consequence, many companies — from retail to food and beverage through to financial and professional services — have sought to expand their online reach since the onset of the pandemic.
From a legal perspective, however, such an undertaking is not without its hurdles.
Whether strengthening web infrastructure, making inroads into new service offerings or amplifying your presence in new jurisdictions, businesses should be mindful that e-commerce in Canada is governed by a complex constellation of provincial and federal legislation.
In addition to legislation specific to e-commerce, businesses must also ensure they possess a thorough understanding of the applicable laws with respect to consumer protection, privacy, advertising and competition.
While this area of law is multifaceted, below I highlight a few high-level areas for in-house counsel to consider as they expand and refine their e-commerce strategies in the near and long term.
GOING NATIONAL
In Canada, any business that sells goods or services to consumers is subject to the consumer protection legislation of the province or territory where those transactions occur. Given the internet’s borderless nature, however, e-commerce platforms must generally adhere to consumer protection legislation of all provinces.
To minimize complexity, federal and provincial consumer affairs ministers largely harmonized such legislation in 2001 through the introduction of a common “Internet Sales Contract Harmonization Template.” Still, important differences remain from jurisdiction to jurisdiction that must be accounted for if a business that historically only marketed itself in one part of the country decides to make inroads into another.
QUEBEC LANGUAGE LAWS
Quebec’s Charter of the French Language mandates French as the language of commerce in Quebec and businesses carrying on online commercial activity in Quebec — even if they themselves are established elsewhere — may not necessarily be exempt from such rules.
In 156158 Canada inc. v. Attorney General of Québec, 2017, the Quebec Court of Appeal confirmed that commercial websites in Quebec were subject to the province’s language laws. Companies looking to market goods and services online to consumers in Quebec must, therefore, ensure they make available a French version of their website, which includes translations of all product and service descriptions, as well as contractual terms.
INFLUENCER MARKETING
As companies increasingly turn to bloggers, vloggers and influencers to help grow their brands and market their products online, the distinction between unbiased third-party opinions and paid-for endorsements has faded significantly in recent years.
However, companies looking to deploy this type of marketing strategy in shoring up their e-commerce business should be aware that both the deceptive marketing practices provisions of the Competition Act, as well as provincial consumer protection laws, apply to anyone who is promoting a product, service or any business interest.
In addition, The Canadian Code of Advertising Standards provides that a “testimonial, endorsement, review or other representation” must disclose any "material connection" between the endorser and what they’re endorsing. Ad Standards Canada’s Influencer Marketing Steering Committee Disclosure Guidelines outline the best practices for clear, conspicuous, full, effective and contextually appropriate disclosures of the material facts relating to an influencer’s relationship with a brand, company and/or its goods or services.
E-SIGNATURES
There’s little question that COVID-19 has helped accelerate the use and popularity of e-signatures in 2020. Most provincial e-commerce legislation takes its inspiration from the Uniform Electronic Commerce Act in recognizing the validity of electronic signatures, and they continue to be widely accepted in a range of commercial and consumer contracts.
Although in many instances the conditions under which e-signatures can be used has been relaxed in recent months, provinces still prohibit electronic signatures from being used on specific documents, such as wills and powers of attorney.
CONCLUSION
Although COVID-19 has injected significant uncertainty into the global economy, the future of e-commerce in Canada and elsewhere looks bright. However, it’s important that businesses take the time to consider their approach and conduct their due diligence before expanding their online commercial activity.
