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Considerations for Chinese E-Tailers Seeking to enter American E-Commerce
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Stacey Anne Mahoney
2013年2期
Considerations for Chinese E-Tailers Seeking to enter American E-Commerce
Stacey Anne Mahoney
Bingham McCutchen LLP, United States

Considerations for Chinese E-Tailers Seeking to enter American E-Commerce
  International companies continue to choose initially to expand into the United States through e-commerce outlets. In many instances, e-commerce is a way for these companies to test American waters with relatively minimal expense and exposure before they dive in head first with a brick and mortar presence. Chinese companies may be particularly well positioned to enter the U.S. e-commerce environment; the Chinese e-tail market is now second in size only to that of the United States. There are, however, some important legal and practical differences between the two e-tail environments that a prospective entrant should be aware of and factor into their business plans. This article identifies issues that a Chinese company should consider when engaging in e-commerce in the United States for the first time.

  LEGAL ISSUES

  There are three primary legal areas that must be considered when developing a nascent e-commerce presence in the United States: antitrust/competition, privacy, and contractual terms and conditions. A Chinese entity should be aware that it must comply not only with U.S. federal laws, but also with numerous state laws that apply as well. Which state’s laws will apply will have to be determined on a case- by-case basis considering a number of different factors. The e-commerce entrant must evaluate where its anticipated customers will be located in order to evaluate the applicability of certain statutory regulations; for example, many, but not all, states have registration requirements for companies that sell to customers located in those states if those companies use trade names on their websites, instead of their official corporate name. In addition, there may be different legal requirements based on the type of e-commerce being contemplated, e.g., whether the products sold are subject to additional governmental regulations (i.e., jewelry, appliances, clothing, among many others), and whether the sales audience is other businesses, consumers or children. Further, savvy companies will want to be advised regarding the value of compliance with aspirational codes, like the Better Business Bureau Code of Online Business Practices, that may facilitate successful and prompt sales penetration into their particular e-market segment.

  It is also worth noting at the outset that the World Wide

  Web is just that, “worldwide.” As such, companies doing business internationally would be wise to be aware that, in order to bolster their enforcement efforts, American regulators have been and will continue to be in consistent contact with foreign regulators. For example, the 2006 Undertaking Spam, Spyware and Fraud Enforcement With Enforcers Beyond Borders (“SAFE WEB”) Act was enacted to enhance U.S. regulators’ ability to engage in successful cross-border enforcement efforts and to obtain more data about possible violations of U.S. law from international sources. Thus, be forewarned that international troubles may not be left behind when a company crosses over onto American shores.

  ANTITRUST/COMPETITION

  Chinese companies intending to engage in e-commerce in the United States must be aware of numerous federal and state antitrust and unfair competition laws, as well as related deceptive acts and practices statutes, that govern e-commerce. In this regard, companies should understand that not only can enforcement actions be taken by regulators against e-tailers that are in violation of any of these laws, but often, competitors, suppliers and customers may also be able to sue for damages suffered in the United States. As such, not only is it critically important that companies seek advice when they are initially developing their e-commerce sites, but it is also crucial that they regularly monitor their compliance with these laws once their sites are up and running. (This article assumes that e-commerce entry is being contemplated by a single company independently; if multiple companies are working together to develop an e-commerce initiative, an additional review of market shares of the e-commerce participants, as well as those of their customers and/or suppliers, may be warranted, and the terms of their joint e-commerce arrangement must be closely analyzed for possible criminal or civil horizontal antitrust implications.)

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