The proliferation of commerce on the internet has not eluded the Turks and Caicos Islands. It is constantly evolving as more and more businesses are setting up shop on the internet. Over the past few years, we have seen lots of websites popup offering goods and services where customers can pay directly online. This fast-paced space means that the law is usually playing catchup, and businesses must be mindful that their operation is within the law.
So, what are the top legal issues that attention must be paid to?
Data protection is king for online businesses. If you are not on top of this, your reputation may suffer, and you risk losing business. Robust and transparent policies, such as privacy and cookie policies, are a must.
Almost all businesses will use and process personal data, therefore, it is imperative that websites and developed with privacy laws in mind, to protect and limit risks of disputes and large penalties. The risk of a data breach is inevitable. Therefore, it is key to ensure that you have workable policies and procedures to deal with any breach effectively.
Businesses will require funding to scale and develop their offering. The founders must take legal advice at an early stage to protect themselves and their business during investor involvement.
Confidentiality agreements are very important for these businesses when sharing valuable information about products and services. Early involvement of lawyers is proven to reduce costs in the long run. They can offer sound commercial advice, as they will have seen many issues before.
It is worth noting that if investment documents are not in line with your best interest, you may relinquish a large degree of control of your business without realising it. Therefore, the earlier you involve lawyers, the better.
Cloud computing poses a serious legal risk from a data protection and privacy standpoint. When using cloud computing, all online businesses should consider the entire data lifecycle, from generation to transfer and storage.
Other key factors include ensuring that robust contracts, internal policies and insurance are in place when relying on cloud computing, to help address litigation risks and regulatory scrutiny. Several major companies that offer cloud solutions have international servers. This must be factored into data policies, and the relevant laws on international data transfers must be adhered to.
Environmental, Social and Governance (ESG)
There is a growing reliance on digital offerings, and stakeholder expectations are constantly increasing. Due to this increase in expectations, we are also seeing governments become more and more involved in ethics and accountability. It is therefore important that online businesses consider how they can improve their ESG accountability. It will ensure stakeholders (including investors) remain happy and will reduce the impact any legislative change will have on them.
Intellectual Property (IP)
IP protection should be a top priority for online businesses. You should have clear documents to establish IP ownership, especially if you are using external developers. Fundamentally, IP rights can only be transferred in writing. If you outsource any development, you should expressly state, in a document, that you will own all IP created by the developer.
We also suggest conducting extensive due diligence checks on the third-party providers and having any contracts reviewed before signing, as tech businesses are built around their IP.
You should also carefully consider how your IP can be protected from users in the real world and the Metaverse. Any claim should be brought without delay if you notice an IP breach.