Drastic Changes Are Being Made to E-Commerce Policies. What Are Your Options?

July 10, 2019 Publications

A few months ago, Salesforce.com (Salesforce) changed its Acceptable Use Policies (AUP) to expressly prohibit customers from using any Salesforce platform software or service to transact online sales of firearms and related accessories to private citizens. Salesforce is a leading provider of customer-relationship management (CRM) software which millions of businesses use as their primary e-commerce platform to sell and market their products and services to B2B and B2C customers. Companies around the globe have become increasingly dependent on CRM platforms for their business operations, using CRMs for sales, marketing, distribution, fulfillment, and lead generation. E-commerce platforms have become the foundation on which many businesses operate. Salesforce’s decision to unilaterally prohibit sales of firearms through its CRM underscores the ongoing trend of e-commerce providers to exercise their rights to unilaterally change their AUPs and other online terms. When changes prohibit the types of products a company may sell and the means in which it sells products, entire businesses could be materially impacted.

Courts have generally upheld the enforceability of a provider’s modified online terms and conditions, provided that users receive advance and conspicuous notice and are afforded the ability to affirmatively accept the new terms with knowledge of the modifications. Salesforce customers who are impacted by the new AUP will need to act quickly. They must either move their e-commerce product offerings to alternative service providers, or radically alter their business models. If the latter is unlikely, is a move to a new provider feasible without disrupting business? If your main products or services are banned by your primary e-commerce provider, what should you do? And is this situation preventable?

First, before committing to a provider based on name recognition, investigate all options. Industry leaders such as Salesforce bundle artificial intelligence (AI) and machine learning (ML) technologies with current CRM services and offer pricing incentives for multiple solution subscriptions. The bundled suites offer subscribers new technology with the convenience of one e-commerce platform; however, by using one provider for all needs, you may have difficulty moving to a new provider should the AUP or other online terms change. Having different providers to fulfill different needs may afford companies flexibility to change platforms, and flexibility provides leverage in contract negotiations.

Second, many subscription and license agreements are negotiable. As AI, ML and other innovative technologies have become more prevalent in e-commerce, new developers have once again entered the marketplace. These younger companies have been partnering with Salesforce and other established technology leaders. Hungry for an entry into the marketplace, they offer innovative technology that is delivered through secured platforms from an established provider and tend to be more open to negotiating favorable license and subscription terms. Both new and established companies often negotiate their terms and conditions despite their preference of utilizing a click wrap. New companies having unique technology should look for opportunities to gain market share by offering terms and conditions that their predecessors will not.

Third, read the online terms and conditions to which you are bound. Unfortunately, many companies do not realize that the AUP is one of many online documents. The number of online agreements has grown along with the expansion of online software and services offerings. Industry leaders, many of which our clients interact with every day for personal and business use, have added hundreds of different online agreements to their sites, all of which are legally binding on their customers. Use of one product suite could bind a company to multiple agreements, many of which are embedded inside each other.

Example agreements might include:

  • Master Subscription Agreement
  • Data Processing Addendum
  • Product Specific Terms
  • Order Form Supplements
  • Policies
  • End User License Agreements
  • Community Terms

Multiple documents, such as Compliance Documentation and the AUP, are embedded in these documents too! Don’t become overwhelmed and hope for the best.

Recommendations:

  • Investigate: Are there alternative providers? Is a new software company partnering with an established provider? You could find the newest technology combined with the most reliable platform. Is the convenience of a one-stop shop worth terms that could impede your business?
  • Inquire: Are online terms negotiable? If not, what are your rights to terminate? Are there early termination fees? Will the provider help you transition to a new platform?
  • Institute: Companies should conduct semi-annual legal reviews of online terms applicable to their business to ensure compliance and awareness of changes.