Why Your Probably Breaking The Law Online – Richard Chapo

richard chapo rec

DISCOVER HOW TO BUILD THE RETAIL STORE

YOU'VE ALWAYS DREAMED OF

“If you create something, you don't want someone else to go and profit from it"

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TIME STAMPS

How did Richard get into Internet law like it's a very niche thing and the Internet's only been around for twenty years? [4:35]
What to do when somebody blatantly steals your copyright? [7:40]
What is Federal Trade Commission? [13:08]
If you're using images on your social media or on your website on your blog, how do you have to act there?[17:20]
Learn more about the pitfalls you might have if you're using an influencer to build your brand [26:50]
Never promise not to sell or share or rent personal information because it could hurt your business[37:15]

richard chapo square

TRANSCRIPTION

SALENA: Hey there and welcome to this week's episode of the bringing business to retail podcast. Now, the Internet has been a godsend for us it means that we can sell our products and services anywhere in the world, but as it grows it becomes a legal minefield so today's guest Richard Chapo is an internet lawyer and he is going to help us navigate just a teeny tiny part of the internet web laws that are out there we can't cover all of them. But I've asked him to talk about a few of the key ones that are going to be relevant to you no matter where you are in the world. So, welcome to the show Richard.

RICHARD: Thank you for having me on.

SALENA: Now tell us how did you get into Internet law like it's a very niche thing and the Internet's only been around for twenty years. So, how did you choose that field?

RICHARD: You know I actually started out as a litigation defense attorney and I ended up defending cases where there was a person who had died typically Hospital treatments and things of that sort, I did that for about ten years that got really old really quickly and so I went to Russia for a year on a sabbatical and taught at a university there and came back had a friend this is 2000, had a friend who was running online company, he was the CEO of it and you know around 2000, if you think back that far you know  most people are still in dial-up and it was very much the wild-wild west and so, from a legal perspective it was interesting because frankly there just weren't you know that many laws that applied. So, it was a true see I was, so started doing that and next thing I know eighteen years have passed and I'm still doing it so, I'm.

SALENA: And you seem very enthusiastic about it and I guess the great thing about this area law of law is that it's constantly changing, so for you it's keeping up with what the changes mean and getting that knowledge out there.

RICHARD: Yeah, I think so, you know I think the best way to analogize this is probably like doing SEO search engine optimization first site you know SEO and 2002, was mostly about building as many links as you could regardless of where they were coming from or the quality of the links and you keep forward to 2018, obviously that's not the best approach you need relevant links all these different things it's become much more sophisticated same is true for the law you know 2001, you had judges they couldn't set up their own email, 2018 you know now you'd have judges who you know are intimately familiar with the Internet they're obviously using it all day on their smartphones and what-have-you and so as that's occurred and as that process has moved along you know I've seen a lot of develops developments on the legal side some good some bad, but it's definitely becoming more sophisticated and unfortunate it's also becoming more complex you're seeing a lot of governments trying to mark their territory, if you learn online and that's leading to a lot of uncertainty for businesses unfortunately.

SALENA: So, I have to ask you just yesterday, I was doing a Google Alert for myself and if you don't have one of those set up you really should because I'd done a whole bunch of pictures to some major newspapers and I thought I might just go and double-check just in case I'm out there in the world and my Google that hasn't picked it up. When I googled myself I found some icons that my graphic designer had made for one of my courses and they were on one of those I just called them spam sites you know it was just a bunch of icons that they'd stolen from other people admittedly they did refer back to my website, but I hadn't been notified, I hadn't been asked if they could use it and they were actually encouraging people to download and use the icons for their site and when I click the contact us button it went to 404, error page, so clearly this was just like a link farm or something along those lines to generate traffic and probably spam people. So, tell me what am I right here when somebody blatantly steals my copy right?

RICHARD: Sure, well copyright is definitely the issue were talking about it's important to start off by saying excuse me copyright is a country-by-country law there is no international copyright law. So, always check in your country you know as to what the specific standards are they differ quite a bit. I'm in the United States, so the biggest issue in the United States is rather the Digital Millennium Copyright Act it's a federal law was issued and an enacted in 1998, and the whole idea behind the DMCA was to create an environment where businesses could grow online without being dragged into court every time there was an infringement claim.

So, if you think about Facebook you know it's kind of classic example Facebook is actually a really brilliant business model and people don't really think it through a lot to understand why Facebook doesn't really create much they really don't do that much content creation because they don't need to because people do it for them you know when they open pages you know most of the content you're seeing shared on Facebook is you know content from friends and people who follow and what have you and so, you know in your situation you were talking about and Facebook and everything else the government was faced with the question of well we have this new thing called the Internet most of us don't know how it works. But we could see it has potential as a commercial medium what do we do you know to protect these companies and so, the DMCA was basically enacted for that purpose. What the DMCA says it says a couple different things, but the section we're interested in section one to twelve and it basically says that as long as you're a passive website or provider and you're not the one who actually posted the content and question you cannot be held liable for copyright infringement based on that content based on the content uploaded by what we'll call users user-generated content and so, it gives you the kind of kind of the idea now, in exchange for that because there's always a price this site has to follow, however the company has to follow a particular procedure known as the DMCA takedown procedure and part of the procedures they have to remove the content.

So, if we go back to your situation and we're looking at it and you're here you know your icon stolen well how are you gonna deal with that situation, well you could go try and fire copyright lawsuit, but as you probably already notice they have a 404, page up and everything else. They're probably located in somewhere like China and your ability to ever track them down you know next to none unless you want to you know spend millions of dollars trying to do it which doesn't make any sense. So, under the DMCA you would you would actually look at the site contacting the sites almost useless sometimes I'll throw a scare letter item you know a cease-and-desist something of that sort, but typically the better approach is to try to identify the host for the site and you can do that by going in and looking at the URL and who has searched and you can usually tell who the host is and then you would just submit a DMCA takedown notice to them their free forms there on the web it's just a form that you fill out most hosts will actually have their own form and you submit that to them and under the DMCA the host has to take down that content and they will send a notice to the person who has that site and saying basically you know we received a copyright infringement complaint you know you have a chance to file a counter notice. Now, they're never gonna file counter notice and the reason they're never gonna do that is because they know they're ripping you off what are they gonna say, but the key thing to understand about this this is an area the deeps here it confuses a lot of people. The host has to take down the content, it's not a choice see a lot of people they submit complaints to Google and all these groups and they think that these groups are looking at it and really evaluating it and in ninety-nine percent of cases it's not true. They have to take down the content if they don't they waive the immunity that the DMCA gives them.

SALENA: So, those host providers are kind of acting like the Facebook example you said, they're just the platform and they're all the individual websites are user-generated content. So, if the domain host wants to keep that immunity, they have to comply with the DMCA takedown law.

RICHARD: Right they have to and then the method the cure if you will for the person who posted. So, let's say somebody posted something legitimate, let's say that you put out a product they tried the product brought a cut on fire almost burned their child they write a review saying this product is horrible and a lot of companies will serve DMCA takedown notices to try to get that review removed even though it's inappropriate.

SALENA: snick it.

SALENA: Yeah, well they'll do it because they'll say you know wind up in court and do you have money to defend it and they said the other thing. So, in that situation what would happen is the hosts would say okay we took out of the content however you can file a counter notice at that point because you have a legitimate reason for using it which is criticism a fair use defense you know you would have the right to file a counter notice and say hey no you know this is fair use now a lot of your listeners are probably thinking I have submitted complaints to Google and YouTube and even Facebook and they look at them and they evaluate them and that is true for really big companies that have tons of money. They do actually go look at the content and they'll make a judgement and the reason for that why it's different from smaller companies is Google has so much money they don't really care if they have email it or not you know if they waive the immunity the biggest copyright claims you're gonna get one hundred fifty thousand dollars per violation which is nothing.

SALENA: It does nothing to them.

RICHARD: Exactly so…

SALENA: That's my ad spend.

RICHARD: Exactly, I mean you know the Federal Trade Commission is the group that's in charge of basically policing deceptive marketing practices in the US and they caught Google at one time that was actually they'd hacked into _ well I won't say hacked allegedly hacked into Apple's Safari browser and we're following people around in building behavioral you know databases of these people which is completely illegal and the FTC find them twenty two million dollars, they're made a big deal about it and twenty-two million dollars is like a half-hour of revenues maybe not even that for Google it means it's nothing and so, you always have to remember you know scale when we're talking about these things and so the DMCA if you have a site and you allow you to supposed to you want to register for the compliance process with the DMCA which we'll talk about in a minute, but if somebody has stolen your content you want to go hunt for that host because those hosts will react and they will become your hammer because if you think about it a host has thousands of clients and so, they're not gonna you know go down the drain because of one guy's paying nine dollars a month you know to put up a rip off site. So, we have more sophisticated situations, so let's say you're in Australia I'm in the U.S. we start looking at the site and we see the host is also in China. So, now what do we do because China's not gonna react most of those people are not gonna react their black hat hosts all over the world that you know they basically exist just you know stick up their middle finger when people send copyright complaints.

SALENA: They like the Swiss spanks.

RICHARD: They are there are in many ways yes those Swiss spanks is a fascinating legal situation that's just differ

SALENA: It's like the theory of Swiss spanks been.

RICHARD: The theory definitely the theory yeah, so just quick thing on the Swiss banks the reason why Swiss banks don't cooperate with tax evasion claims from countries is tax evasion is not illegal in Switzerland.

SALENA:  You learn something new every day.

RICHARD: Yes, social industrial government they have whatever basically they call Canton's are basically cool states and the state set their own rules and in international law most countries will not enforce in a judgement or even act on a claim from another country, if it's not illegal in their country so that's why you get all that, but.

SALENA: Any way we have a whole different conversation about that.

RICHARD: Little cocktail lounge news there, so what do you do if you're sighs you know also the second question is also being hosted in Russia or China or somewhere like that you know the most important and tactic at that point is to try to follow the money. So, how are they making money and if you can identify the affiliates or even who's doing the payment processing you know you can go after that I have a large client in the US who is very well known personality and he sells courses and people rip off his courses all the time it's just ongoing battle to try to stop it and you know we had a scenario recently where the course was you know listed outside those Offshores impossible to go after but they've accepted payment through PayPal and so, we approached PayPal and after a couple months of screaming and yelling you know PayPal eventually you know took down the payment processing well if they can't make money off the content obviously you know defeats the purpose. So, following the money all the time, if they have affiliate links up or something like that you can also contact those companies and they will usually shut them down so that's definitely another approach.

SALENA: Wow, that's interesting and I see that all the time I know quite a few friends of mine, I've seen on those I don't know how you end up finding them, but I remember I just emailed my friend Natalie Sisson about six months ago and said I found your course on some spam website selling it for a fraction of the cost of what you do. So, their definitely out there and people are going to be unscrupulous people are always going to try and make an easy buck at the expense of everybody else, so really need to be aware of what you're allowed to do legally, but also what your requirements are. So, can we just quickly touch on, if you're using images on your social media or on your website on your blog, how do you have to act there?

RICHARD: Sure, so the images again the issue is copyright and it really you just need to really think about okay where am I getting this image from and what rights do I have and there can be a lot of confusion and again right now we're talking about US law. So, in the U.S. let's take a photographer shot once they shoot that image and make it quote unquote available to the public they own the copyright in it and that's just the way it is there's no ifs ands or buts about it same thing with a graphic same thing with anything like that, so once they have that if you want to use that image you have to have a reason a real reason to do it every illegal reason and typically that's you can license it you can go to you know stock photo sites and things of that sort or you can contact photographer directly NASA and permission and in some cases you know people want something to go viral and so they'll offer it up and you'll see share buttons and things of that sort you know and you could share it without changing it and you're fine.

The problem is you know unfortunately it's really easy obviously to copy an image online it's just right click Save and you know we published wherever you want you can't do that unless you have some kind of fair use basis for doing that one of the common We are talk about fairies in just a second, but one of the common mistakes people make is they think well I can use an image from somewhere as long as I link back up to that source then it's not copyright infringement under US law that's just wrong. It is copyright infringement you're all you're doing is giving attribution, attribution is a defense to plagiarism not to copyright infringement.

SALENA: That's interesting because a lot of people on bugs will do like a roundup post and they might take you know five ways to take the time out in your day and they go and take the blog's from other people’s websites and you know potentially use those images and they think just linking back is okay, but you're saying it's actually not.

RICHARD:  No, it’s not only, it not, but it's actually kind of particularly damaging because when you're determining damages and copyright infringement cases one of the issues was the person who posted the image from.

SALENA: Innocent, I was going to say when we talking about the image we also could be talking about the text as well.

RICHARD: Yes, so roundup post let's talk about roundup post, so when the post copyright is frustrating for people's frustrating for lawyers and the reason why is copyright law was established literally hundreds of years ago, well before the web came, so the applications that you see on the internet and in common techniques you see on the internet you know didn't exist offline you didn't have roundup you know books or something of that sort of just you know a lot of these things didn't exist. So, the application of copyright law to the web can sometimes be a real stretch and you know it's the putting the square piece into the round hole kind of a situation. One of the things about copyright is you cannot copyright facts you cannot copper at an idea and you can only copyright a creative work that is substantial meaning you know what well what a substantial mean well typically it means you know more than a couple lines and so, when people do round up posts and they published a couple lines and maybe the title from the article and then it's a link off to that article, the argument that they are making even if they don't realize it is I'm not copying enough of this that it matters.

SALENA: This is how Buzz Feed stays in business.

RICHARD: A lot of sites having to pose you know a lot of these groups and so that's what's going on there now there is another side to it and this is very important for listeners to always keep in mind and if you have a lawyer feel free to smack them upside the head because a lot of lawyers don't do this there's the practical aspect. If Forbes writes an article that's on the front page of their site and they have a link to your site really don't want to be creating that link taking down you know I mean it has valuable SEO purposes you can get a lot of traffic, I'll give you an example I represent a couple of bands don't know why help some friends out like saying I know I represent a couple bands and one of the bands the members and we laugh about this that's pretty much public knowledge at this point you know they will do concerts and people will film the concerts on their phones and then they'll publish them on YouTube and they used to go ballistic take it down as copyright infringement you know I kept pointing out to them these are your fans you know we don't really want to be serving the fans with cease and desist letters you know you know now there's some legal aspects you have to think about, but you know generally you want people to promote you and if your fans are out there saying hey, look at this video this concert was great you guys should all follow this band you know we probably don't want to follow up that you know with a letter from law officer Richard a Chapel cease and desist you know that just doesn't really make a lot of sense does it.

SALENA: No.

RICHARD: So, there's a practical side to all of this that you need to keep in mind, but yeah so that's what's going on with us and roundups really you know most people you know be very happy to be in a roundup just from a practical purpose you know link-building can be a pain in their ears we all know and so, that's an easy way to get into it so you're really going to complain at that point no but if somebody's got ear you know content scraped off of your site you know on a cheesy blog somewhere you know and they're using it to rip people off well you know at that point probably gonna be a little more angry.

SALENA: Yes sure and feel free forbs if you'd like to take any of my articles, I'm gonna give you permission out here as long as you link back to my website.

RICHARD: Exactly maybe you'd be surprised how many calls I get.

SALENA: Oh, Gosh.

RICHARD: Really.

SALENA: We should all be so lucky; I know you know it's like you know kill to have that you know in the early times website.

SALENA: So, I was reading on your website something about having an agent for the DMCA, so can you just _ I wanted to ask you this question personally, so can you just explain that a little bit more.

RICHARD: Sure, so as part of the compliance process, so you have a website you have an app you have something and you allow users to interact with it even if it's just comments you want to comply with the DMCA and the reason is the cost is a staggering six dollars and for that six dollars you're buying immunity from being sued for copyright infringement for anything and if your users posts, so you know do it I mean you can't find something that cheap ever, but part of the compliance process is that you have to select a DMCA agent. Now, if you think about Facebook okay well if you wanted to serve a legal complaint on them who you gonna serve it to you know Mark Zuckerberg now, the way it works with corporations you select an agent and the agent is published in the Secretary of State database and lawyers know that they know how to find them. Well it's the same idea with the copyright law with DMCA you have to designate a DMCA agent they're listed with the Copyright Office in the United States they have an online database you also have to list the information online on each side and what's called a DMCA policy and again the cost of six bucks. So, it's something else nothing to it you can be your own agent or if you have an attorney that you work with the attorney often do it for free and if you need an agent you want to have some third party do it yours truly owns a site called DMC agent service.com and you can get you know you can get an agent the only reason you might want a third-party agent is if you work at home and the reason why that's a problem is under the Copyright Office regulations have to remember they've never run a business before and so you don't think these things through.

SALENA: I'm guessing you have to list your address.

RICHARD: Your phone number, your email address and your physical address, so you can't use a PA box or a service.

SALENA: Yeah.

RICHARD: So, if you want you know if you're worried about quote unquote a fan showing up on your front door you know then getting your lawyer or an independent agent act as you know that agent you know it's definitely what you guys do lawyers don't care that people coming in yelling all the time, but you know, if you have kids or something like that if you're writing a controversial topics, you know I mean it wasn't long ago a gamergate you know and all these kinds of things and people get all out of control about it you know and some of those people you read some of those comments and really don't want him showing up at your house and so, you always have to understand that part of the process.

There was a book online on Amazon called the DMCA handbook it was a tremendous book was written by an attorney in Arizona explaining the DMCA process and you could buy it and anybody could learn it and do it I would encourage the book unfortunately is out of print. So, I'd encourage people to go around just do a search for DMCA takedown process you should see plenty of articles online learn how to do it yourself I mean I'm glad to do it for you, but I'm gonna charge you and all I'm going to do is basically hunt for hosts and things that you could do yourself. But if you can learn the process yourself you know you can largely take control of the potential copyright infringement issues that you face and then with the agent you know it's just a question of do you care if your information’s out there or not.

SALENA: True, okay let's move on a little bit because of course I'm sitting here thinking I need to find the link to the takedown forum. So, I'm going to find that and I'll put it into the show notes and of course we'll also link back to your DMCA agency as well for people who are like yes, I need one of those you did a really great blog on social-media influencer followings and I'll link to this one as well because I know a lot of retailers use influences to build their brand to get brand awareness to build credibility and social proof. So, tell us a little bit about the pitfalls you might have if you're using an influencer to build your brand.

RICHARD: Sure well there's a couple aspects of it in the U.S. so, the two of them primarily one is disclosures that you have to make under FTC requirements and the second one is control really you know how do you control your followers things that sort of it's difficult to explain in a catch phrase, but let's start with the FTC requirements if you are retailer and you're hiring an influencer, this is a hot-button topic with the FTC thickets that are deceptive marketing if you do not have that influence are disclose that you're paying them or that you're giving them free swag or whatever it is that you're doing exchange for them promoting your product and so, think about Instagram and the first three lines of you know the posts they have to put something in there you know a hashtag sponsored or hashtag ad or something of that sort it needs to be a parent and you know that there's compensation being paid there and the reason being that you know they would just want people who are viewing it to know you know that there's some money online because obviously that effect credibility, I think we've all been to you know various web sites you know let's say treadmill sites are kind of infamous for this you go to the site there's eighty-five treadmills listed all of them have five-star ratings and it's apparent that whoever built the site probably has never been on a treadmill nor why.

But you know use treadmill links through to Amazon or some other site you know whether they generate affiliate Commission's and that's fine there's nothing wrong with that at all, but you just have to disclose and so you have to put the Scotia's up there saying you know basically I'm earning money if you click this link and purchase now most people cringe at that idea because they think about it from the wrong way, instead of thinking of it as oh there's burden present it to people as a positive you know I just want to make sure you know you understand you know this is a for-profit business and I make money on the following links you know it doesn't affect which products I promote you know and that kind of thing and make sure that's true obviously you know and use it as a positive it can actually build your credibility because I think we all know there's so many sites out there that don't do that and that are making money in funny ways that you know most people are pretty cynical now in the cruise around the web, so that's the most important thing FTC violation penalties they can claim it forty-one thousand dollars now per violation.

So, you really don't want to go down that road and the second side of that is when you're building a following on social media whether you are retailer or an influencer and really anybody the important thing to remember is the issue of control. So, do you control those accounts and you may think to yourself yes I do and the answer is no you don't so if you build up a hundred thousand followers on Instagram the company that controls those followers is Instagram and if you do something that violates their term or you do something that forces them to act they will close your account and when they close that account you are not getting it back.

SALENA: You have no recourse either.

RICHARD: You have almost no recourse at all and you know we were talking before the show started you know I get calls on this a couple times a month I know other attorneys in this field get calls all the time too. So, how does any of this happen well let's go back to the DMCA. So, the DMCA has something and I call it a repeat that repeat infringer requirement and so, when you think about the web you know if somebody is taking your graphics and they posted them on the site somewhere it's probably not the only site they posted them on you know they may be on other you know other ten to fifteen sites, so what happens is the copyright owners you end up playing whack-a-mole where you're going around you know and you get them taken off a ten sites and suddenly they appear on ten more sites and so under the DMCA they say if a site has knowledge you know that a person has infringed they have to set a policy a reasonable policy that if a certain number of infringement occur within a certain period of time that person has to be terminated from the site and no longer be able to use the site and the numbers are pretty low like maybe two or three violations in a two year period.

So, let's say you're on Instagram and you have a competitor that you have a very strong rivalry with what's to stop that competitor from claiming that you're committing copyright infringement you know three or four times in a year and if you don't counter notice those and get them taken away if you just ignore them you know suddenly you have two or three complaints against your Instagram account Instagram is going to shut your account you just lost all those followers.

So, the answer to that is really to try to you know think about control how can I survive a situation like that so maybe moving people back to your website you know to try to get them on to you know an email list or something of that sort you know depends on the business model what you're doing, but the point is to always think about that and think about you know are these different things in the Instagram obviously is very popular one of things most people don't realize about Instagram and you wouldn't realize looking at Instagram is that racy images are against our violation of the terms of use for Instagram now you go float around Instagram at the bath and you know the people who are modeling bathing suits and things like that and I don't know where you draw the line on racy images, but some of those are pretty damn racy.

SALENA: Some of them are very racy my daughter is for over looking over my shoulder going that lady hasn't got very much covered.

RICHARD: right, exactly, so you know what's to stop you know Instagram from one day you know saying okay well you know we're creating these guidelines and you know suddenly poof people disappear so that's obviously another issue you know that you need to keep in mind the other thing that could come up and we've seen it with YouTube lately and if anybody is a YouTube influencer uses YouTube to make money you know they'll be painfully aware of this you know in the last year YouTube has been slicing the revenues that they pay out to people you know they're publishing on YouTube and in some cases slicing them directly or damagingly and significant percentages and you have no recourse you just have not they have every right to do that so what I try to tell my clients and is you know if you're gonna be weather you gonna want to be an influencer or something of that sort always try to get that data back to something that you control again your email list you know make sure you spread them across all the social media you know platforms you know whatever you can do so that if you lost one of those you know you're not going to be devastated and like frankly you see a lot of people you know go through because if you do that then you know it makes a huge change in the world I mean you go look at look at pudgy pie you know the gamer on YouTube you know has a fascination was saying you know the end word every once in a while well if YouTube's you know just cut him off you know his response as well I have all these other things going on well yeah. But if YouTube cuts you off you're not gonna have those other things going on for long.

SALENA: And where's your revenue coming from.

RICHARD: Right exactly you know sponsorships and things of that sort, but you know there's a lot of people that love to sponsor Tom Brady, but if Tom Brady stops playing football there's no reason to the sponsor them.

SALENA: His not what.

RICHARD: Right you know if he's sitting on the couch all day your nachos no that's just not really a good look for most of the sports go you know, so it's one of those things. So, I'm not in any way suggesting people shouldn't go out and try and build you know following on the social media channels you should absolutely the beautiful thing about the web as it evolves it always comes up with these little niches that people would have never thought about before and you should take full advantage of those and do everything you can to build a following, but just think about okay how do I convert this following nothing not only into instant money, but how do I get control of them so that if you know God forbid I lost this account you know I'm not just wiped out and you know and you can do that by offering you know free _ I don't know a free book ,so yeah, it depends what you're doing you know free meetings, free whatever on your site you know people come over and they you know submit their email address or something like that and you know you can do that under your US law certainly can do that under EU law anymore, but you know any of those kinds of tactics where you can move those people you know into your control so then again you know Facebook disappeared or something like that you're in business and you have you know a good position to continue on from.

SALENA: And this is the point guys where I take out my big stick and I whack you when you tell me that newsletters aren't worth sending an email lists aren't worth creating, I don't want to spend my sixty a month on Mail Chimp yes you do Richard's just giving you an extremely good reason other than all the reasons I would give you, but Richards has given you a fantastic reason to go out and pay your bloody Mail Chimp monthly subscription and get those social media followers onto a database that you control.

RICHARD:  Yeah, I think email emails definitely changed I don't even say that it's lost its value it's just changed, if your idea of an email you know drip campaign is to send you know bizarre offers to your list every day yeah your list is worthless because you all you're doing is annoying people you need to give them some kind of a value you know you need to give them free stuff you know send them an email once that has you know a long article on you know how to build the following on you know whatever and it doesn't picture many thing and people read those and they see its value and there's nothing in there that you know you're trying to sell them you don't to someone every email and then they look at that and I said wow there's value here and then when you send the next one that has a subtle you know not in their face pitch they're gonna be more receptive to that, so go out and you know Pat Flynn people like that read their email strategies because yeah if you're just sending you just spamming your email list yeah it's not gonna be worth anything.

SALENA: No we set them off the social media channels so that like you said you've got a good distribution. So, if one of them goes pear-shaped you can still access your people somewhere else.

RICHARD: Right and the sites that have the biggest problems with this tumbler if anybody's still using tumbler they closed them all the time Instagram will close them YouTube will Facebook's pretty lenient, but when they do decide to close it forget it you're never getting it back but yeah. So, it is a problem on all the sites and it will be on whatever you know the next big thing is so just make sure you here protect yourself as much as possible.

SALENA: And just lastly what we're talking about personal information you intrigued me when you said that you should never this is gonna be double negative never promise not to sell or share or rent personal information because it could hurt your business can you just go a little bit deeper into that because of course I know whenever I do an opt-in it always says down the bottom we won't yeah we won't sell or share your information to a third party just give me a little bit more information on why that could hurt my business.

RICHARD: Right well now would be the time to extol the negative virtues of free forms and everybody else does it statements. So, if you have a website or an app or you know whatever your thing is that you're generating money off of and you control it it's a business, so ask yourself what is the value of that business and unless you're doing something really creative the value is typically your client lists or your newsletter lists you know a dating site match.com huge dating site does really well has a lot of value ninety-nine pint nine percent of its value are the people that are listed as you know individuals looking for dates on that, the graphics, the color, the cool, coding all that stuff is worthless when it comes to sale I can get that anywhere, but I can't get that member list. So, if you've promised those members you will not sell share rent their information and you know Mark Zuckerberg shows up one day and the slight haze from drinking too many margaritas and offers three million dollars for your website you know and he wants that database you can't give it to him because you just promised everybody that you won't sell share or rent their information. So, the same famous cases dating site called true.com and they were owned by a parent company that had financial problems parent company got dragged into bankruptcy and so, all the assets the company get dragged in as well and true.com is the Bankruptcy Court smart little dating site called plenty of fish saw this and recognized hey we can buy their database.

They came in and offered seven hundred thousand dollars to buy the database of all the members and then we're gonna republish them on plenty of fish and it wasn't fast expanding their database which is a big issue with dating sites and everybody be happy and the Attorney General of Texas objected to the sale and he said to the court and hey you know to calm promise not to sell share or rent remember information and that's exactly what this is and the court agreed terminated the sale.

SALENA:   So that is interesting because what if they would have sold the whole business do they then acquire the email list as well, if they buy the business and not just the email list I know we're talking there's a whole bunch of other implications like the debt and all that kind of stuff, but let's just say there was obvious implication of that they bought the cut the whole company for a dollar, do they then own the mailing list?

RICHARD:   I don't know any case law on it I would think that they do not I think you'd have the same objection because it's an activity of that business, I mean it's a good question ad raise good points about the debt and all those other factors but you would certainly get an objection you know and I think it's probably going to depend on you know how the court views the promise, but the privacy policy applies to the site regardless of who owns it and so, I would think that you would have to follow that and that would mean the sale would be you know terminated another way around all of this is to include a clause and your privacy policies however you know should we sell this site or our parent business you know your data will be transferred to the purchaser it's as simple as that.

SALENA: Of course you one hundred percent right about the email list again this is big stick coming out you need an email list because what was it back in twenty-four Facebook bought, WhatsApp that the chat website for nothing else other than the metadata on the people who were inside of the app and they paid nineteen billion dollars that's billion with a B I just went and googled it because I couldn't remember the exact number, but nineteen billion dollars for that data. Now, I would believe that the WhatsApp people didn't have this close all they had that disclaimer in there if they did because like you said if somebody somewhere decides that what you have is valuable them you might want to cash in on this this opportunity. So, I know that once we get off this call I'll be going to check my privacy policy because I'm not sure what's in it.

RICHARD: All right well I think it's you know I think a lot of it you know comes down to how big are you, I mean obviously you know if you have a large site that's being sold you know I bet somebody did look at that because a lot of people objected it to the sale to Facebook just because you know the pure amount of personal information was being moved. So, what that may have well I've done that correctly or they may just not mention that you know who knows what it actually said but I bet somebody looked at it you know obviously with smaller sites it's you know kind of an issue the problem is that if you have a sale even if it's a smaller site and the other side has an attorney that's one of the things are gonna look at and the web sites you know there's the thing that I understand about web sites is the beauty of the Internet is you know now we have some of much open source code and everything so module you know WordPress and what have you that you know a site and its design really isn't very valuable.

SALENA:  No.

RICHARD: Just because you can get it anywhere, so the value is almost purely in the intellectual property if you have a trademark or something of that it's well-known name or in yeah your metadata your client data you know however you want to define it.

SALENA: Or your traffic them which is kind of as well and you pay the way you look at it whether they're on your mailing list or not the traffic coming to your website do their potential customers.

RICHARD: Right you know in with traffic though again you're looking at control you know if it's SEO who knows Google comes up with some bizarre change their algorithm and suddenly you know your traffic gets killed, but if you're running Facebook funnels or something like that you know then you have more you know Facebook could do something but realistically you have a lot more stability in that market you know how are you going to address all these things the other thing that's coming along is in the EU they're sharing a new privacy law it goes into effect in that is very anti-business.

SALENA: Is it the double up.

RICHARD: Yes well more than that yeah, the general data protection regulation the much hated GDPR. So, the GDPR is says basically won't go into it it's ninety-nine articles long and many hundreds of pages, but it basically says this unless you have a legal basis for collecting information from somebody such as their name credit-card information when they purchase something from you, you have to get consent from them and consent means that when you go to a site and EU starting in mail there's gonna be a pop up and the pop up is going to list granular explanations of what they're collecting information for so you want to collect information to market to you we want to collect information to send your administrative emails, we want to collect information so we could sell it to third parties who will mark it to you each one will have a check the box and you as the consumer will have the right to check the box yes or no and then that business and that sounds great if your consumer.

But if you're the business you have to realize that box once you take that action they then need to track you it's going forward individually each one of you. The whole way for the rest of however long they hold that information and they have to have an audit trail there that they can show and you're the twenty-eight enforcement agencies in the EU you know that they're doing this and that they're basically going through the consent you know and you can be fined up to twenty-four million dollars for failure. Now, obviously those are scary numbers but you know there will be substantial fines out there. the other aspects of it are unlike in the U.S. you can no longer hold your list forever you can only hold it for a set amount of time now you get to set that amount of time has to be reasonable. So, say you know two years, three years, whatever it is and at that point you've send out emails to your list and get them to try to renew you know and your old email list, email list that you have right now you may not be able to use it because the consent requirements you know they go beyond double opt-in in the EU.

SALENA: So, that's a legal minefield and I'm just thinking I am I subscribe to a lot of American stores and I know I've been on their websites for more than two three four or five years and I don't think I've ever been asked to come back and opt-in again. So, unless it's somewhere hidden in one of the emails that you know because you opened this email you can set to us sending you more emails, I don't know how many people are complying with that one.

RICHARD: They're known in America that’s not in American EU.

SALENA:  Oh it’s not only EU okay.

SALENA: Yeah, but the problem is that EU, so the EU has actually had a privacy law similar this the director since 1995, the problem with the directive well I didn't consider your problem I considered a great thing I had one those little strange loopholes that they didn't again nobody really understands the web. So, they said this directive applies to any business located in the EU and not realizing that doesn't really matter where the business is located.

RICHARD: right exactly if you're a Sydney or in California you're in London you can still market to this all the same people and so, this new GDPR says if you're offering goods or services to the EU; you know it doesn't matter where you are you offering goods and services and then there's this vague sliding scale that will be litigated over for twenty years you know and you have to go through this whole process and it's okay for Facebook they got the resources for it, but what about everybody that's small and the GTR makes you know no exceptions for small guys. They just don't care and they're very anti-business one of the worst Regency businesses in the world not even just this for anything just a terrible place to do business, but you know it's gonna rock the world an email lists and things of that sort you know people have to rethink monetization you know how are they gonna deal with us. So, if you if you are looking at an EU market you know if that's your target market for your business you should be speaking of the lawyer and the EU now and trying to figure out how you're gonna get through this mess.

SALENA: I have to say it is one of the places I don't market to only for the reason that the time zone is so different that it's almost impossible for us to find great times to chat like if I'm working with clients there's like you know and a window of one hour per day that works for both parties. So, I just kind of I keep my Facebook at my Google ad spend by just not marketing to you.

RICHARD: That’s definitely benefit, I think that's what you're gonna see is the web evolved, so you're gonna see economic you know walls if you will because for a lot of us clients you know why would you go if two percent of your sales are in the EU well do you want to spend thirty grand trying to comply with this stupid regulation or do you just want to say mmm and you know block all traffic from the EU.

SALENA: Yeah, definitely, now you have a fantastic download that we're going to link to which is nine legal tips for protecting your online of business. So, I'm going to make sure to link to that because you have given us so much information we could talk for ages, but I do have a couple of questions to finish off with first one is what is your favorite store?

RICHARD: My favorite store?

SALENA: Yeah.

RICHARD: this is gonna be so sad, I have to admit I am an Amazon slave.

SALENA: Amazon comes up a lot.

RICHARD: Yes, I live actually San Diego a little a little bit to the east and the mountains outside San Diego and…

SALENA: Yes my friend lives in Malaysia.

RICHARD: Yeah.

SALENA: At the bottom of the mountains.

RICHARD: Right now I'm at the top, so yeah way out there, so I'm kind of in remote area so Amazon's nice because it's hopping out here so I think yeah Ted say but I'm an Amazon slave.

SALENA: And why do you love Amazon? what is it about Amazon that makes you go back again and again.

RICHARD: Two days shipping.

SALENA: Two days shipping.

RICHARD: Yeah, you know when you're sick if you need something or whatever you know I need that shipping right away I hate ordering things and waiting three weeks for them show up you know, but again that's kind of where I am you know there's no store just to pop down to and buy you know some kind of cough drops or something.

SALENA: But that's interesting actually because what we can learn from that as independent retailers is fast shipping is super important to our customers. So, if you have the opportunity to whilst you may not be able to affect how fast your parcel is delivered what you can change is how fast you get that parcel out. So, if you are marketing to someone like Richard and to be honest there are a lot of people like Richard who fast shipping is super important to them take that on board and look at your shipping processes and how can you turn around your orders a lot faster to get them out.

RICHARD: Absolutely.

SALENA: Okay Richard thank you so much for being on the show if people would like to maybe talk about you being their agent or find out some more information on this legal minefield that is the Internet can we find you.

RICHARD: Sure, if you need a DMC agent you can always cut a DMC agent service.com very creatively named and just use the contact form there and I'll get back to you and if you have legal questions you can reach me at my law firm website which is SoCal like Southern California internet lawyer.com obviously all these domains were purchased when keyword phrases were still getting ranked.

SALENA: I was just thinking the DMCA agent a Hello the great idea on that one.

RICHARD: Yeah unfortunately a Google down plays the keywords a bit these days but you know I was king of the world for a couple of years there, but any of those sites and just use the contact form and I'll get back to you.

SALENA: Fantastic again thank you so much for all this information, it's been so much to take in, but also for me great learning experience so I reckon if I've learned something you've completely blown the minds of our listeners.

RICHARD: Hopefully, so thank you for having me on.

Bio

A lawyer for 24 plus years, Richard Chapo (“chap-oh”) is a well-known Internet business lawyer in Southern California. Richard’s philosophy is to proactively position his clients to minimize their potential exposure to lawsuits. To this end, he provides advice to clients as large as multinational corporations and as small as hobby bloggers with an eye towards eliminating potential problems areas before lawsuits are filed. Richard is versed in a variety of Internet laws including the DMCA, Communications Decency Act, and Children’s Online Privacy Protection Act, as well as FTC compliance guidelines, state privacy mandates, and recurring billing laws. One of Richards greatest strengths as a podcast guest is the ability to speak on legal topics without droning on in a fashion guaranteed to bore your listeners. Instead of discussing vague terms or employing scare tactics, Richard provides plenty of real-world examples and tips involving companies such as Google and Facebook your listeners can apply in their businesses the same day they listen to the podcast episode. Richard has been featured in various publications and podcasts including the Smart Passive Income podcast.

“Each week I interview industry and thought leaders for their take on business and life”

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