Woman making a purchase on her laptop


David H. Schwartz May 5, 2021

While online sales are expected to top $4.5 trillion in 2021, a more troubling statistic is that fraudulent transactions online — using stolen credit card data — are expected to rise to $34.66 billion of losses in 2022, up from $24.26 billion in losses just four years ago.

Operators of e-commerce sites are also coming under increasing pressure, not only for monitoring credit card usage but also for compliance with ever-evolving governmental regulations, including the General Data Protection Regulation (GDPR) in the European Union and the California Consumer Privacy Act (CCPA) here at home. Online retailers must now allow consumers to opt out from sales of their private information and can be held liable for data breaches.

If you’re operating an e-commerce site, the rewards can be great, but the headaches and challenges can be exhausting as well. If you’re facing legal problems with fraud, privacy, or other issues with your online presence, and you’re in or around the San Francisco Bay Area, including San Jose, Santa Clara, San Mateo, and Alameda County, contact the Law Offices of David H. Schwartz, INC. Attorney David Schwartz has 45 years of experience in business litigation and can guide you through the even the most complex legal challenges.

Common E-Commerce Litigation

Since the first online sale was made in 1995 — a book sold on Amazon — the World Wide Web has grown to be the elephant in the room when it comes to retail sales. With the COVID-19 pandemic, online transactions and interactions only intensified as people faced lockdowns and stay-at-home orders. 

Even traditional brick & mortar establishments like Walmart find they can’t stay competitive without a strong online presence. Social media sites that started as ways to interact with one another soon became sales-oriented behemoths with an abundance of ads and buy buttons.

Though losses from credit card fraud can hurt your business, such incidents don’t usually lead to lawsuits and courtroom action that threaten your continuing operation. Product liability, however, is an altogether different matter. In 2018, Amazon got sued for selling a dog collar from a third-party vendor that caused a woman to suffer permanent vision loss.  You need to protect your site against product liability lawsuits with strong sales and return practices, along with expertly worded terms and conditions and privacy policies.

Hacking & Data Breaches

Another source of legal concern is hacking or data breaches. Verizon, Adobe, and Target have all been subject to data breaches affecting millions of users. Often, the target is personally identifiable information, such as names, addresses, Social Security numbers, and the like — commonly referred to as identity theft. The hackers then sell the stolen IDs on the dark web for anywhere from a dollar to $450, with $20 being the average price. For $20 someone could buy a house in your name, or switch ownership of your own home to their name.

Here in California, the CCPA allows the Attorney General to take action against companies that fail to adequately protect consumer data. In addition, the statute permits individuals to file class-action lawsuits for data breaches, allowing for up to a $750 judgment per incident per person affected by ID theft. In November 2020, California voters passed the California Privacy Rights Act (CPRA), which further strengthened consumer protections. The state is also putting in place a data protection watchdog agency that will begin operating by July 2021.

ADA Compliance

Perhaps the fastest-growing area for lawsuits against websites is in compliance with the Americans with Disabilities Act (ADA), which requires refined and refocused online access for individuals with vision issues or other physical disabilities. Sites should include accessibility features enabling text to be read to those with poor or no eyesight. For users suffering from attention deficit hyperactivity disorder (ADHD), online content needs to be streamlined and more focused. For users with seizure disorders, sites should reduce color contrast and avoid flashing text and images. 

The ADA is aimed at businesses that offer “public accommodation,” so retailers with brick & mortar stores are definitely subject to ADA compliance and to lawsuits challenging the accessibility of their online presence. Also included are restaurants, hotels, pizza delivery firms, and the like. Note also that different circuit courts have interpreted “public accommodation” in a variety of ways so that almost anyone selling online can be sued with or without a brick & mortar presence.

The latest standard for compliance is contained in the Web Content Accessibility Guidelines (WCAG) published in 2018, now dubbed WCAG 2.1 (2.2 is due this year). The CCPA incorporated WCAG 2.1 into its required standards.

A study by UsableNet Inc. found the number of digital accessibility cases grew to 3,550 in 2020, up 22.8% from 2,890 in 2019, with 77.6% of the lawsuits being filed against online retailers. California, New York, and Florida annually lead the nation in ADA website lawsuits.

Have Your Questions Answered by An
Experienced Business Litigation Attorney

Ecommerce sites are subject to multiple regulations and laws. If you sell in the European Union (EU), the GDPR will affect how you handle customer data. In California, you can be sued if there is a data breach, both by the state and by consumers whose IDs were stolen. Many other states in the U.S. are adopting their own version of the CCPA. Being in compliance with all of these different jurisdictions can be a daunting challenge and may result in far-ranging and far-flung legal challenges.

When you face legal action because of something your site did or failed to do, you’re going to need the services of a knowledgeable and experienced attorney. If you’re anywhere in or around San Francisco, Alameda County, the East Bay, or the North Bay area, contact the Law Offices of David H. Schwartz, INC. With 45-plus years of business litigation experience, attorney David Schwartz will offer you vigorous representation, whether your site is being sued or you’re contemplating action against an e-commerce site and its owner. Reach out today for more information.