Guide to Laws about Online Shopping in the United States

This is part of our Guide to Laws for Consumers.

Is false advertising online illegal?

Most of the laws against false or misleading advertising apply to the online world as much as to the real world. But some of the ways they apply may be surprising, for example, a business even “liking” someone else’s comment on its Facebook page may be seen as the business adopting or holding that statement. If the comment is false or misleading, it could get the business in trouble.¹FDA letter to Tirosint See more about Consumer Rights.

Is sales tax charged for online purchases?

Many states now require online retailers to charge sales tax for all locations where the goods are shipped.²South Dakota v Wayfair However, these new requirements generally only apply to businesses that do a large amount of business. For example, if you have an e-commerce site based in New York, and you sell at least $500,000 worth of stuff to customers in California, you would have to collect and remit sales tax for California.³AB 147 (2019)

The previous rule was that you only needed to charge sales tax for purchases that are shipped to a state where you have any sort of “physical presence” such as a retail store, warehouse, office, or where the owners reside.⁴Quill Corp. v. North Dakota, 504 U.S. 298 (1992)

Are there any rules about when an online store must ship the product?

When you buy something on the internet, the seller must ship the goods within the time frame it gives you (or within 30 days), otherwise you have the right to cancel the purchase. ⁵Federal Trade Commission rule found at Code of Federal Regulations, Title 16, Part 435

Does a blog need to disclose a relationship to products it reviews or endorses?

If you have an affiliate relationship with a company (they give you a cut for sales you direct to them) and you publish a review or endorsement of that company’s products, you must disclose that affiliate relationship.⁶see FTC guidance on testimonials and endorsements

Can a company sue Yelp for negative customer reviews?

Nope. But if the reviews are clearly false, the company can sue the reviewers for defamation.

Can a company prevent customers from writing any negative reviews about the business?

No. A business cannot prevent a consumer from sharing their “honest opinions” about the business’s products or services.⁷Consumer Fairness Review Act But that does NOT mean a reviewer can post things that are harassing, abusive, or false or misleading.

Further Resources

See your options for getting legal help regarding online shopping issues.

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