Amazon Associates’ Child Directed Policy, COPPA, and Your Website

coppa childrens online privacy laws
Is your website violating COPPA or other child protection laws?

Amazon recently emailed its affiliates (called Amazon Associates) to let them know that “sites targeted at children under 13 are not eligible to display links and advertising from the Amazon Associates program.”

Amazon sells children’s clothing, toys, games, etc.

So why would the company do this?

The reason is simple: potential legal liability.

There’s a U.S. law known as the Children’s Online Privacy Protection Act of 1998 (COPPA). This makes it difficult to legally do business online with websites that target (directly or indirectly) children because there are many extra requirements for doing so. If your website violates the law or related regulations, chances are you’re exposing yourself to lawsuits and government investigations by the U.S. Federal Trade Commission (FTC) and other consumer protection agencies.

If you’re an Amazon affiliate, the company doesn’t want to end up being liable for you putting ads on a site that violates COPPA.

What if your site isn’t targeted at young children?

You probably ought to make that clear on your site, both in your content and the website’s legal documents. That’s why the customized site documents I draft for clients (privacy policies, terms and conditions, etc.) and my legal forms generated by Website Legal Forms Generator software (http://LegalFormsGenerator.com) inform visitors that a site is not intended for children and imposes limits on how minors can use the website with parental involvement.

What if you do have a children’s website?

Have a qualified Internet business lawyer review your site to ensure you’re not violating COPPA. Let’s face it. If Amazon thinks there’s a legal risk, chances are you don’t want to violate that law either.

Texas Attorney General Ken Paxton Indicted for Alleged Tech Securities Fraud

texas attorney general ken paxton indicted
Attorney General Paxton was indicted for alleged securities law violations

When a client starts talking about raising funds for an Internet startup by selling equity, it’s time for a reality check because of federal and state securities laws.

Quite simply, you can’t run around selling stock in your company without dotting a lot of legal i’s and crossing regulatory t’s. And you can’t pay commissions to your buddies for bringing investors to you.

Securities law is so complex that even most lawyers avoid it like the plague.
Which makes it all the more interesting that Texas Attorney General Ken Paxton has just been indicted by a grand jury on charges related to his alleged solicitation of investors for tech company Servergy, Inc. The three felony indictments accuse him of securities fraud and failing to register with the State of Texas to sell securities.

I don’t know if Attorney General Paxton violated the law. Some call the charges a political witch hunt. Others say he crossed the line.

Regardless of what did or did not happen, the important thing to learn from Paxton’s predicament is that you have to be extremely careful when raising funds for your tech startup. If you’re selling equity, get a securities lawyer on board to advise you before you even solicit investors.

For many entrepreneurs, the safer (and cheaper) course of action would be to do crowdfunding through sites like Kickstarter and IndieGoGo.

Disclosure: I dealt with Paxton’s office on an unrelated matter last year when he was a State Senator, and I voted for him when he ran for Texas Attorney General.

Ashley Madison Hacked: Sex, Lies, and Internet Privacy

ashley madison hacked
Why is the hacking of AshleyMadison.com important?

If you’re married and trolling the Internet looking for extramarital “no strings attached” sex, you’ve probably come across the website AshleyMadison.com.

Anonymous Married Dating?

The primary purpose of the site is to make money by helping adulterers find each other for secret affairs. In fact, as of today, Ashley Madison claims almost 38 million “anonymous members.”
However, news reports allege that hackers now have the entire database and are starting to “out” these members to the public. Imagine what your spouse would do to you upon discovering you’re a member of an adultery website.

The Lesson of the Fappening

Whether or not you’re an Ashley Madison member, there’s a lesson to be learned here that has nothing to do with infidelity.
As celebrities found out when their nude photos were hacked during the “Fappening,” you should assume that anything password protected on the Internet isn’t really secure.
Before putting anything online, whether it’s in cloud storage or on a paid membership website, assume that the public can and will see it at some point.

Do you own a website?

What if you own a site that advertises complete privacy or anonymity? It’s probably time to see your Internet lawyer about revising your site’s content and disclaimers because hackers are making it just about impossible to make that promise and keep it.
Internet privacy isn’t dead. It’s virtually nonexistent these days. Act accordingly.

How to Avoid the Costliest SEM Agreement Mistake

sem agreement mistakes
Do you make this mistake in your SEM agreement?

When you’re providing searching engine marketing (SEM) services to clients, the most expensive mistake you can make is not defining who owns what as part of your SEM agreement.

Whether you’re rendering SEM services as an independent contractor or as an employee, your client will assume they own what you create.

This means that if you don’t have a written agreement that defines the scope of services plus ownership, it can be an expensive legal mess to sort things out later.

Who Owns What?

Who owns the PPC (e.g. Google AdWords) accounts and the analytical data?

Who owns any custom coding that was done, including any APIs developed as part of providing services?

As a practical matter, you don’t want to be put in the position where you can’t use what you’ve created to provide SEM services to third parties. However, clients won’t be pleased to discover they paid you for SEM work and then you sold similar services to their competitor too. In short, they will feel cheated.

So what’s the solution?

Although there isn’t a one-size-fits-all answer to that, a good starting point is a provision in the SEM agreement where you retain ownership but provide a limited license to use the intellectual property (IP) you created for the client that enables you to license the same IP to others.

Some prospective clients will balk at this idea if they believe you’re going to sell the same SEM services to their competitors.

How do you respond?

First, explain to the prospect that the IP you create is the lifeblood of your business and that giving them exclusive ownership over key parts would in essence put you out of business.

If the prospective client still objects, offer a compromise that limits your use of the IP with one of their competitors for a reasonable period of time (e.g. 2 to 3 years). However, this should be a final offer not the starting point of negotiation.

Be careful when you do offer to restrict your future services to competitors. If the current prospect is a small fish, sometimes it’s better to wait for a bigger better deal with a large competitor of the prospect than be frozen out of that market for a few years because of a non-compete restriction.

Where do you start?

Your Internet lawyer can prepare an SEM agreement that’s designed to protect your interests and can be customized on an as-needed basis to serve individual client needs in order to get a deal done that’s good for both you and the client.

Books for Website Owners – May 30, 2015

As an Internet lawyer and entrepreneur, I read many business
books. From time to time, I’ll come across one that I think
will help you with your business. Here’s one you should take a
break to read.

Title: Built to Sell: Creating a Business That Can Thrive Without
You

Author: John Warrillow

Reason to Read:

Learn how to structure your online business so that it has value
when you either sell it or decide to step back out of the picture
(e.g. retire) and let someone else run it for you.

Key Quote:

“When people are the main assets of the business – and they
can come and go every night – the business will not be worth
very much.”