If your ecommerce site on platforms like Shopify, Magento, or BigCommerce uses Meta (Facebook/Instagram) pixels, live chat, or various tracking scripts, it's crucial to be aware of a growing legal threat. Addressing this now could save you tens of thousands of dollars.
The Issue
A new wave of attorneys is targeting ecommerce site owners with legal threats on behalf of anonymous plaintiffs. These claims leverage a 1994 California law originally designed to combat illegal wiretapping. Despite the law predating the modern internet, it’s now being applied to websites. The penalty for violations is $5,000 per "infraction," with most threats citing multiple infractions.
Legal Context
While the case law supporting these claims appears relatively weak, numerous attorneys are still pursuing these threats. Some even go as far as filing for arbitration, especially if your privacy policy includes an arbitration clause. Often, the cost of settling these claims is lower than the expense of arbitration, prompting many businesses to pay settlements.
The Solution For Shopify Sites
One of the remedies is pretty straightforward: obtain explicit consent from California residents, akin to GDPR compliance. Implementing a consent banner can significantly mitigate your risk.
For Shopify users, several free apps are available to help you create this compliance banner. Implementing one of these solutions now could potentially save you upwards of $30,000 in legal fees and settlements. You can find these apps in the Shopify App Store.
Taking proactive measures now can help safeguard your ecommerce business against costly legal threats.
Additional Resources
For a deeper dive into the legal nuances, check out these resources:
The Next Chapter of CIPA Litigation: The Pen Register and Trap and Trace Device
Data Privacy Insight: Notice of Substantial Increase in Legal Demands Regarding Website Technologies
