In an online marketplace, there are several small but significant details that can either raise or lower your risk profile. The online marketplace is naturally rife with risk because of its rate of scale, and the increase in the number of customers and transactions processed daily.
Few online marketplaces are aware of their level of risk—the enforceability of their clickthrough agreements, inefficient version tracking, and a one-size-fits-all terms of service. It is impossible to minimize marketplace risk without first being able to recognize it.
3 ways to recognize your online marketplace risk
To begin to recognize your level of risk, start by assessing your current processes, protocol, and technology. Here's how:
1. Clickthrough fire drill
Chances are if you do business online, you probably present online legal agreements via a clickthrough. A clickthrough is, after all, one of the quickest ways to present your terms of service to prospects and customers. However, the clickthrough agreements are probably scattered across your web ecosystem. Hold a clickthrough fire drill and ask these questions:
- Do you know where all your clickthroughs are located?
- Can you affirm with certainty what provisions are stipulated in each?
- Are they designed to conspicuously present your terms to users?
- What would happen if a court were to subpoena your records?
2. Review your legal tech stack
Do you have a bona fide contract management system, or an ad hoc "system" built from scratch? What about a robust clickthrough solution that allows you to track and manage the agreements scattered across your digital ecosystem while tracking who signed what version of an agreement? If your legal tech stack is short, then most of your operations are manual, making your processes slower and more prone to human error. Noting the holes in your tech stack might also help you recognize the areas in which your online marketplace may be at risk.
3. An outside assessment
If you don’t have software, or if you do and don’t know how to start using it to its fullest potential, seek the insight of a legal expert who specializes in internet-based litigation. They will understand what makes a clickthrough enforceable and if yours pasts muster, as well as if your legal terms are solid enough to hold up in court.
3 ways to minimize your marketplace risk
It is evident, then, that standardized processes are key to mitigating risk. Doing things ad hoc exposes your organization to more risk than necessary. The following are some ways to do standardize your processes to minimize online marketplace risk:
1. Standard clickthrough protocol
Implementing clickthrough solutions on an ad hoc basis exposes your organization to more risk than necessary. To mitigate this, implement organizational checks and balances that will ensure that your clickthroughs are the same across your digital ecosystem. Where will you present them? How will you update them? How do you track versions of different legal agreements that are at disparate places on your site? Streamlining this process and making it more standardized will go a long way in helping you minimize marketplace risk.
2. Standard update protocol
Your terms of service not only needs to be published, but updated on a regular basis. What is the process for making these updates? Are your terms so illusory that they can be updated at any time for any reason? Can your legal team publish changes to online legal agreements on their own? Implement timelines and courses of action for when your company needs to update terms: how will it be created? How will it be presented to users? How will they be given the chance to accept and reject it? Where will these agreements be stored at the end of the process?
3. Standard response protocol
In the event of a data breach or some other emergency, what actions have been put in place to ensure that the damage is contained?
A comprehensive clickthrough solution can help minimize marketplace risk
Greater visibility into your tech stack and standardized processes can go a long with in helping to minimize online marketplace risk. A comprehensive clickthrough solution can help do both. PactSafe’s robust API-first clickthrough platform was built by lawyers, for lawyers to help track and manage the breadth of your online terms presented to users. It allows for excellent record-keeping, thereby helping you stay protected in the event of a a subpoena or a class action suit.
Do you want to know what you need to protect yourself in the on-demand economy? Read our free guide on Minimizing Marketplace Risk in the On-Demand Economy.