{"id":3321,"date":"2019-01-09T11:32:33","date_gmt":"2019-01-09T03:32:33","guid":{"rendered":"https:\/\/zegal.com\/?p=3321"},"modified":"2023-01-18T13:32:50","modified_gmt":"2023-01-18T05:32:50","slug":"essential-legal-considerations-online-marketplaces","status":"publish","type":"post","link":"https:\/\/zegal.com\/en-nz\/blog\/post\/essential-legal-considerations-online-marketplaces\/","title":{"rendered":"Top 3 Legal Considerations for Online Marketplaces"},"content":{"rendered":"<p><span style=\"font-weight: 400;\">Are you an \u201conline marketplace\u201d? Online marketplaces are all the rage lately, with every startup aiming to be the next <\/span><i><span style=\"font-weight: 400;\">unicorn<\/span><\/i><span style=\"font-weight: 400;\">.<\/span><\/p>\n<p><a class=\"CMY_Link CMY_Valid\" href=\"https:\/\/www.linkedin.com\/pulse\/myth-small-balance-sheet-ben-robinson\" target=\"_blank\" rel=\"noopener noreferrer\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter size-full wp-image-3169\" src=\"https:\/\/blogdragonlaw.files.wordpress.com\/2016\/08\/online-marketplaces-4.png\" alt=\"Online marketplaces\" width=\"568\" height=\"190\" \/><\/a><\/p>\n<p><span style=\"font-weight: 400;\">Online marketplaces serve as a platform for the buying and selling of a third-party vendor\u2019s goods. In other words, online marketplaces merely facilitate transactions and, most of the time, do not own any goods or services themselves. This means that legal considerations for online marketplaces can differ from that of a regular business.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">There are a few fundamental issues you must consider for your online marketplace:<\/span><!--more--><\/p>\n<h2><span class=\"ez-toc-section\" id=\"1_Your_role_in_the_marketplace\"><\/span><b style=\"line-height: 1.5;\">1. Your role in the marketplace<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">How involved are you in the transactions that occur in your marketplace? <\/span><\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter wp-image-3168 size-large\" src=\"https:\/\/blogdragonlaw.files.wordpress.com\/2016\/08\/airbnb-privacy-policy-role.jpg?w=809\" alt=\"AirBnB Terms of Service\" width=\"809\" height=\"94\" \/><\/p>\n<p><span style=\"color: #de5b6b;\"><a class=\"CMY_Link CMY_Redirect CMY_Valid\" style=\"color: #de5b6b;\" href=\"https:\/\/www.airbnb.com.sg\/terms\" target=\"_blank\" rel=\"noopener noreferrer\"><span style=\"font-weight: 400;\">AirBnB\u2019s Terms of Service<\/span><\/a><\/span><span style=\"font-weight: 400;\">, for example, states clearly that they are no party to agreements that are entered into between hosts and guests. This helps limit the scope of acts or omissions that you may be liable for.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">It is important to make clear that you are merely providing an<\/span><b> introductory service <\/b><span style=\"font-weight: 400;\">to the parties that transact via your marketplace. As such, you have to make clear what role(s) you play and how that helps make transactions possible. You should think about:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">How can users begin to transact on your platform? Will they need to create an account?<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">If so, do they access the service for free? If not, will you charge a listing fee, a subscription fee, or take a commission for every transaction?<\/span><\/li>\n<\/ul>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter wp-image-3173 size-full\" src=\"https:\/\/blogdragonlaw.files.wordpress.com\/2016\/08\/zalora-terms-of-sale.jpg\" alt=\"Zalora Terms of Use\" width=\"804\" height=\"592\" \/><\/p>\n<p><span style=\"color: #de5b6b;\"><a class=\"CMY_Link CMY_Valid\" style=\"color: #de5b6b;\" href=\"https:\/\/www.zalora.sg\/terms-of-use\/\" target=\"_blank\" rel=\"noopener noreferrer\"><span style=\"font-weight: 400;\">Zalora\u2019s Terms of\u00a0Sale<\/span><\/a><\/span><span style=\"font-weight: 400;\">\u00a0clearly indicates that users must create an account, and further states that no contract exists between Zalora and a user until a product is shipped to the buyer\u2019s shipping address.<\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"2_Limitation_of_Liability_and_Disclaimers\"><\/span><b>2. Limitation of Liability and Disclaimers<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Because you merely play an introductory role in the marketplace, you\u2019d want to make it clear that you take no responsibility or liability for the actions of third-parties.<\/span><\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter size-large wp-image-3171\" src=\"https:\/\/blogdragonlaw.files.wordpress.com\/2016\/08\/redmart-marketplace.jpg?w=809\" alt=\"Redmart marketplace\" width=\"809\" height=\"195\" \/><\/p>\n<p><span style=\"color: #de5b6b;\"><span style=\"font-weight: 400;\">RedMart\u2019s terms and conditions<\/span><\/span><span style=\"font-weight: 400;\"> for example points a user back to the third-party\u2019s privacy statements and conditions of use. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">Depending on the nature of your business, you will want to keep in mind laws that are specific to the country or industry in which you operate. For example, RedMart clearly states here their policy against selling alcoholic drinks to minors and in so limits their liability:<\/span><\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter size-large wp-image-3170\" src=\"https:\/\/blogdragonlaw.files.wordpress.com\/2016\/08\/redmart-disclaimer.jpg?w=809\" alt=\"Redmart disclaimer\" width=\"809\" height=\"172\" \/><\/p>\n<h2><span class=\"ez-toc-section\" id=\"3_Protection_of_Customer_Data\"><\/span><b>3. Protection of Customer Data<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Users of your marketplace trust you with their personal data \u2013 their name, address, email address, phone number, and in most cases even their credit card details. You must provide assurance that you will only use data for the purposes that they have provided them for, and that you have taken the necessary steps to protect their personal data.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Uber, for example, clearly states in <\/span><span style=\"color: #de5b6b;\"><a class=\"CMY_Link CMY_Redirect CMY_Valid\" style=\"color: #de5b6b;\" href=\"https:\/\/www.uber.com\/legal\/privacy\/users\/en\/\" target=\"_blank\" rel=\"noopener noreferrer\"><span style=\"font-weight: 400;\">its privacy policy<\/span><\/a><\/span><span style=\"font-weight: 400;\"> that they may collect data about your location, transaction, device, and log information, in order to facilitate your use of the ride-sharing app. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">In addition, Uber provides an avenue for you to reach out should you wish to correct your account information:<\/span><\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter size-large wp-image-3172\" src=\"https:\/\/blogdragonlaw.files.wordpress.com\/2016\/08\/uber-legal.png?w=809\" alt=\"Uber privacy\" width=\"809\" height=\"275\" \/><\/p>\n<div style=\"text-align: center;\">\n<p><a class=\"CMY_Link CMY_Invalid\" style=\"background-color: #de5b6b; border: 1px solid #de5b6b; border-radius: 3px; color: #ffffff; display: inline-block; font-family: sans-serif; font-size: 13px; font-weight: bold; line-height: 40px; text-align: center; text-decoration: none; width: 320px; -webkit-text-size-adjust: none;\" href=\"https:\/\/zegal.com\/website-privacy-policy\/\" target=\"_blank\" rel=\"noopener noreferrer\">Create your Website Privacy Policy for free<\/a><\/p>\n<\/div>\n<p><span style=\"font-weight: 400;\">In a nutshell, <\/span><b>a <\/b><span style=\"color: #de5b6b;\"><a class=\"CMY_Link CMY_Invalid\" style=\"color: #de5b6b;\" href=\"https:\/\/zegal.com\/website-privacy-policy\/\" target=\"_blank\" rel=\"noopener noreferrer\"><b>Website Privacy Policy<\/b><\/a><\/span><b> and <\/b><span style=\"color: #de5b6b;\"><a class=\"CMY_Link CMY_Invalid\" style=\"color: #de5b6b;\" href=\"https:\/\/zegal.com\/website-terms-of-use\/\" target=\"_blank\" rel=\"noopener noreferrer\"><b>Website Terms of Use<\/b><\/a><\/span><b> are minimum legal requirements for your online business. <\/b><span style=\"font-weight: 400;\">Mobile app providers can use a <\/span><span style=\"color: #de5b6b;\"><span style=\"font-weight: 400;\">Mobile App Privacy Policy<\/span><\/span><span style=\"font-weight: 400;\"> and <\/span><span style=\"color: #de5b6b;\"><a class=\"CMY_Link CMY_Invalid\" style=\"color: #de5b6b;\" href=\"https:\/\/zegal.com\/mobile-app-terms-of-use\/\" target=\"_blank\" rel=\"noopener noreferrer\"><span style=\"font-weight: 400;\">Mobile App Terms of Use<\/span><\/a><\/span><span style=\"font-weight: 400;\"> for the same purpose.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">If you are not selling goods or services online but act as a portal, you will still need to set out <\/span><span style=\"color: #de5b6b;\"><a class=\"CMY_Link CMY_Redirect CMY_Valid\" style=\"color: #de5b6b;\" href=\"https:\/\/zegal.com\/terms-and-conditions-for-online-marketplace\/\" target=\"_blank\" rel=\"noopener noreferrer\"><span style=\"font-weight: 400;\">Terms and Conditions for your Online Marketplace<\/span><\/a><\/span><span style=\"font-weight: 400;\">. <\/span><\/p>\n<p><span style=\"color: #de5b6b;\"><a class=\"CMY_Link CMY_Redirect CMY_Valid\" style=\"color: #de5b6b;\" href=\"https:\/\/zegal.com\/website-payment-terms\/\" target=\"_blank\" rel=\"noopener noreferrer\"><span style=\"font-weight: 400;\">Website Payment Terms<\/span><\/a><\/span><span style=\"font-weight: 400;\"> will help set out the conditions of payment and if you advertise online or rent online advertising space use a <\/span><span style=\"color: #de5b6b;\"><a class=\"CMY_Link CMY_Redirect CMY_Valid\" style=\"color: #de5b6b;\" href=\"https:\/\/zegal.com\/website-advertising-agreement\/\" target=\"_blank\" rel=\"noopener noreferrer\"><span style=\"font-weight: 400;\">Website Advertising Agreement<\/span><\/a><\/span><span style=\"font-weight: 400;\"> to establish price, conditions of advertising, and length of agreement.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">It is not uncommon for an online company to pre-release a product for beta-testing. In this case, you will need to warn users about the possible risks with a <\/span><span style=\"color: #de5b6b;\"><a class=\"CMY_Link CMY_Invalid\" style=\"color: #de5b6b;\" href=\"https:\/\/zegal.com\/pre-release-software-terms-of-use\/\" target=\"_blank\" rel=\"noopener noreferrer\"><span style=\"font-weight: 400;\">Pre-release Software Terms of Use<\/span><\/a><\/span><span style=\"font-weight: 400;\">. <\/span><\/p>\n<p><span style=\"color: #de5b6b;\"><a class=\"CMY_Link CMY_Redirect CMY_Valid\" style=\"color: #de5b6b;\" href=\"https:\/\/www.goeasyship.com\/blog\/your-ecommerce-business-needs-a-website-privacy-policy-if-you-do-these-3-things\" target=\"_blank\" rel=\"noopener noreferrer\"><b>No two online marketplaces are the same<\/b><\/a><\/span><b>. Have you put in place the right clauses that will protect YOUR business in the correct manner?<\/b><\/p>\n<p><span style=\"font-weight: 400;\">Most legal documentation for online marketplaces are established for the similar purposes of providing terms and conditions of usage, protecting your users, and managing expectations around liability and warranties. It is important however that each of these clauses are <\/span><i><span style=\"font-weight: 400;\">customised <\/span><\/i><span style=\"font-weight: 400;\">according to what your marketplace has to offer specifically.<\/span><\/p>\n<h3><span class=\"ez-toc-section\" id=\"i\"><\/span>\u00a0<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<h3 style=\"text-align: center;\"><span class=\"ez-toc-section\" id=\"Enjoy_unlimited_creation_and_customisation_of_all_the_legal_documents_for_your_online_marketplace_for_a_one-time_fee\"><\/span><b>Enjoy unlimited creation and customisation of all the legal documents for your online marketplace for a one-time fee.<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<div style=\"text-align: center;\">\n<p style=\"text-align: center;\"><a class=\"CMY_Link CMY_Invalid\" style=\"background-color: #de5b6b; border: 1px solid #de5b6b; border-radius: 3px; color: #ffffff; display: inline-block; font-family: sans-serif; font-size: 13px; font-weight: bold; line-height: 40px; text-align: center; text-decoration: none; width: 320px; -webkit-text-size-adjust: none;\" href=\"https:\/\/zegal.com\/register\" target=\"_blank\" rel=\"noopener noreferrer\">Get started with a Zegal free trial<\/a><\/p>\n<p style=\"text-align: center;\"><em>No minimum commitment, no credit card required.<\/em><\/p>\n<\/div>\n<p><em><strong>Further\u00a0reading:<\/strong> <a href=\"https:\/\/zegal.com\/ebooks\/\"><span style=\"color: #de5b6b;\">Download our FREE ebooks<\/span><\/a><\/em><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Are you an \u201conline marketplace\u201d? Online marketplaces are all the rage lately, with every startup aiming to be the next unicorn. Online marketplaces serve as a platform for the buying and selling of a third-party vendor\u2019s goods. In other words, online marketplaces merely facilitate transactions and, most of the time, do not own any goods [&hellip;]<\/p>\n","protected":false},"author":51,"featured_media":39287,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_editorskit_title_hidden":false,"_editorskit_reading_time":0,"_editorskit_is_block_options_detached":false,"_editorskit_block_options_position":"{}","inline_featured_image":false,"footnotes":""},"categories":[14278,133],"tags":[],"usecases":[13691,13692],"businesstypes":[13696],"country":[],"class_list":["post-3321","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business-management","category-startup","usecases-privacy-policy-generator","usecases-terms-of-use-generator","businesstypes-saas-zone"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v20.8 (Yoast SEO v27.3) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>Top 3 Legal Considerations for Online Marketplaces | Zegal New Zealand<\/title>\n<meta name=\"description\" content=\"Online marketplaces serve as a platform for the buying and selling of a third-party vendor\u2019s good. 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