Outdated Laws Are Holding Ecommerce Back

Martechvibe

28-04-2025

Ecommerce has transformed the way consumers shop and engage with brands, yet the legal frameworks governing digital marketing remain outdated and aren't keeping pace with technological innovations in the industry. Many of the regulations that apply to ecommerce businesses were established long before the rise of mobile commerce, SMS marketing, and the widespread adoption of online shopping. As a result, these laws are not only limiting innovation but are increasingly being exploited in costly and frivolous litigation.
And while there needs to be laws and policies in place to protect consumers from true bad actors, ecommerce businesses should not be forced to operate under the constant threat of litigation for engaging in responsible, consumer-friendly marketing practices. How Outdated Laws are Hurting Businesses
The Telephone Consumer Protection Act (TCPA) is a prime example. Originally enacted to prevent unwanted telemarketing calls, the TCPA is now frequently misused in lawsuits targeting businesses — often in cases where consumers have explicitly opted in to receive communications.
For instance, companies are facing costly litigation for sending marketing texts outside of designated 'quiet hours' (8 a.m. to 9 p.m.), even though this law was intended to curb disruptive phone calls to landlines in the middle of the night or early mornings. Some plaintiffs' lawyers are trying to capitalise on the fear of TCPA litigation, filing hundreds of lawsuits against ecommerce brands that have obtained consent and forcing these businesses to engage in expensive legal battles and 5-figure settlements (which many small ecommerce companies can't afford), which would be a huge hit since ecommerce companies rely on SMS marketing to reach customers and make sales.
Similar legal vulnerabilities exist within state 'mini-TCPA' laws such as the Florida Telephone Solicitations Act (FTSA) or the Virginia Telephone Privacy Protection Act (VTPPA). These laws have been manipulated to support lawsuits over hyper-technical violations. In one case, a plaintiff sought $800,000 in damages by opting into a brand's messages and then arguing that he should have been able to submit a hard copy opt-out request.
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Another lawsuit demanded $225,000 in damages, in part, because the sender's full first and last name was not included in the message—although the company's name was clearly displayed. These cases demonstrate how outdated voice-based laws that are then expanded to include text messaging can be leveraged in ways that do not serve consumer protection but instead create a legal minefield for businesses.
The former US FCC Commissioner Mike O'Reilly, who has seen firsthand the challenges of these acts, from both the perspective of the consumer and from businesses, says, 'These laws were designed to protect consumers from real harm, not to serve as a tool for aggressive litigation against businesses that are following best practices.'
'The original intent of the TCPA, for example, was to stop intrusive robocalls—not to penalise brands that are engaging with customers who have actively opted in to receive their messages. Today, these laws are being twisted in ways that punish legitimate businesses for harmless technicalities. Reform is long overdue,' he adds.
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Given the increasing legal risks associated with SMS marketing and digital outreach, ecommerce businesses need to take proactive measures to ensure compliance while also advocating for necessary legal reforms.
The first and most critical measure is ensuring compliance with existing regulations. This starts with obtaining explicit, documented consent from consumers before initiating any text-based marketing. Maintaining detailed records of consumer opt-ins, opt-outs, and message logs is essential to demonstrating compliance if a dispute arises.
Additionally, all marketing communications should include clear disclosures, such as opt-out instructions, to ensure transparency and adherence to best practices. To stay ahead of potential risks, businesses should conduct regular audits of their SMS marketing programs, identifying and addressing compliance gaps before they escalate into costly legal challenges.
However, compliance alone is not enough—regulatory change is essential to prevent bad actors from exploiting outdated laws. Ecommerce businesses must actively support initiatives that modernise regulations to better reflect today's digital economy.
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A strong example of effective advocacy comes from the Ecommerce Innovation Alliance (EIA), which played a key role in the passage of Virginia SB 1339, closing legal loopholes that had enabled frivolous litigation under the Virginia Telephone Privacy Protection Act (VTPPA).
Mike O'Reilly emphasises, 'If businesses don't step up and advocate for clear, modernised regulations, they will continue to operate under a legal framework that is not just outdated but actively harmful to responsible companies. Policymakers need to hear from the brands that are being impacted so that we can ensure consumer protection laws are serving their intended purpose.' To drive meaningful change, businesses should consider joining industry coalitions, engaging policymakers, and voicing their support for updates that bring greater clarity and fairness to digital communication laws.
Finally, businesses should explore ways to resist the pressure to settle frivolous lawsuits, as doing so only encourages further exploitation. Many Telephone Consumer Protection Act (TCPA) lawsuits are built on weak claims, banking on businesses choosing to settle rather than endure a lengthy legal battle. Instead of conceding, companies should work with lawyers with deep experience in TCPA cases, carefully evaluate their legal standing, and leverage their compliance records as a strong defense.
Organisations like the EIA are already working with regulators, including the Federal Communications Commission (FCC), to challenge abusive litigation and clarify compliance guidelines. By pushing back against bad-faith lawsuits, businesses can help prevent these laws from being weaponised against responsible companies and ensure that consumer protection laws serve their original purpose.
The laws governing digital communications must evolve to reflect modern commerce while maintaining genuine consumer protections. However, meaningful change will require proactive engagement from the businesses affected by these outdated regulations. By strengthening compliance efforts, advocating for legislative reform, and challenging frivolous lawsuits, ecommerce companies can help create a legal environment that fosters innovation rather than stifling it.
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The Martechvibe team works with a staff of in-house writers and industry experts.
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