Essential Legal Terms Every Online Business Platform Must Know

Essential Legal Terms Every Online Business Platform Must Know

In today’s digital era, the rapid advancement of technology has significantly transformed how businesses operate and interact with customers. As your business expands its online presence, whether through a website, mobile application, or any other digital platforms, implementing clear and robust legal protections is crucial. These measures not only safeguard your business but also protect the interests of all parties involved.

Here are some essential legal terms that online business platforms in Malaysia should have:

1. Privacy Policy

A Privacy Policy is crucial for businesses that collect and process personal data from users accessing their platform. In Malaysia, this policy is mandated by the Personal Data Protection Act 2010 (PDPA) and the forthcoming amendments under the Personal Data Protection (Amendment) Bill 2024. Your Privacy Policy should clearly outline how personal data is collected, processed, used, stored, and shared by your business. It must also detail practices related to data transfers, including cross-border transfers, retention and disclosure of personal data, ensuring full compliance with the PDPA.

2. Terms of Use / Terms of Service

The Terms of Use (or Terms of Service) govern the use of your business’s platform or services. These terms establish the parameters for user activities on the platform, including prohibited conduct, usage restrictions, and consequences of violations. Additionally, the Terms of Use should set out the limitations of your business’s liability, outline measures to mitigate such liability and protect your intellectual property and content from unauthorised use or distribution. It is also important to include provisions for dispute resolution, as well as a clear process for addressing legal claims and complaints related to the platform or the services.

3. Disclaimer

A Disclaimer limits your business’s liability for the accuracy or completeness of the information provided on or through your platform, which is especially important for platforms offering health, legal, or financial advice. This document serves as a protective measure against potential legal claims or disputes arising from the use of your platform or its content. By setting clear expectations about the limitations of your platform’s content and services, you ensure that users understand the scope and limitations of the information provided.

4. Cookies Policy

Cookies are small electronic files stored on a user’s device to enhance their browsing experience, such as by remembering user preferences, login details, and tracking user behaviour. A Cookies Policy provides users with clear information about the cookies used on your platform, their purposes, and their impact on user experience. Transparency in data collection practices is key, and a well-crafted Cookies Policy allows users to make informed decisions about their data, including the ability to manage cookie settings in line with their preferences.

5. Return and Refund Policy (for E-Commerce Platforms)

For e-commerce platforms, a Return and Refund Policy is crucial. This policy outlines the terms under which customers can return products or request refunds. In Malaysia, these terms must comply with the Consumer Protection Act 1999, which mandates fair and transparent conditions for returns and refunds to protect consumer rights. A clear and well-defined policy not only enhances customer satisfaction but also reduces the likelihood of disputes between your business and the customers.

6. End-User License Agreement (EULA)

If your business offers software or digital products, an End-User License Agreement (EULA) is essential. This agreement governs the licensing of your software to users, specifying the terms under which users can install, use, and distribute the software. It should include clauses on license scope, restrictions on use, termination of the license, and limitations of liability. The EULA protects your business from unauthorised use and distribution of your software.

7. Anti-Money Laundering (AML) and Counter-Terrorism Financing (CTF) Policy

If your platform facilitates financial transactions or payments, an AML and CTF Policy is crucial to prevent and detect illegal activities. This policy should outline the measures your business takes to comply with the Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001 (AMLA). It should include procedures for customer due diligence (CDD), transaction monitoring, and reporting suspicious activities to the relevant authorities. Implementing a robust AML and CTF Policy helps protect your business from being used for illicit purposes.

Conclusion

Navigating the complexities of the digital landscape requires businesses to have the right legal documents in place on their platforms. These documents ensure compliance with applicable laws, safeguard your business, and build trust with users and customers.

If your platform lacks any of these key documents, now is the time to consult with a legal professional who can prepare them for you, ensuring that your business is well-protected.

Key Contacts

(1) GAN MING CHIEK (Partner)

Corporate, Capital Markets, M&A

+6017 763 0963

[email protected]

(2) KELVIN WONG (Partner)

Corporate, Capital Markets, M&A

+6012 614 9028

[email protected]