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May 17, 2023 Stage TEN

The Legal Ins and Outs of Live Shopping

Whether you’ve been using live shopping in your business for ages or just starting to use live commerce to increase sales, understanding the legalities surrounding live streaming and live shopping is essential. 

Sure, going live and selling your products can be as easy as making a phone call with the right technology. But there are some things to consider before you start streaming to make sure you aren’t getting into any hot waters. 

Let’s look at six key legal considerations that you should be aware of before you go live to sell your products. 

Understand the difference between commercial and private use

If your live stream is for commercial purposes—and if you’re selling live, it is!—there are many legal concerns to consider. So before you do anything live, establish whether you are live streaming for commercial or private purposes.

For clarity’s sake, commercial use is a term that defines the use of certain merchandise, tools, intellectual property, or activities for financial gain. It is considered commercial if you are selling or advertising during your live stream.

So, with this definition in mind, all live ecommerce or live shopping events are considered commercial use. 

Tread lightly when it comes to copyrighted materials

Picture this: you’re getting ready to go live to sell your latest product and have your favorite song playing in the background. Maybe it’s a classic from the Beatles or the latest bop from Lizzo. Either way, you decide to keep the good vibes rolling and leave your music playing. 

You may not realize it, but you’ve just exposed yourself to liability. Using copyrighted materials in your live stream is fine if you have permission. Without permission, you violate the DMCA (Digital Millennium Copyright Act). This group of laws protects copyrighted materials on all digital mediums. 

While you may think of music when you think of copyrighted materials, much more falls under that umbrella. Artwork, performances, written works, and architectural works can be copyrighted.

You’re committing copyright infringement by using copyrighted materials during your live shopping event. And copyright infringement is no joke. In the United States, the criminal penalties include up to five years in prison and fines of up to $250,000 per offense. The copyright owner can also take you to civil court, which can result in even more penalties. 

Needless to say, those kinds of fines are enough to kill any vibe you might have created with that Lizzo bop. Instead, make sure you have permission to use all music and materials in your live shopping stream to avoid costly penalties.  

Be sure you’re licensed to sell
While some products are easy to sell online, there is one product in particular that will require you to jump through a few more hoops—alcohol. 

Because alcohol is age-restricted, you will need to have the relevant paperwork and licenses to be able to sell online. The specific rules that apply to you will be location dependent so reach out to your state revenue office or the equivalent in your location for specifics. 

Here are the most common forms of licensing your ecommerce alcohol business will need:

- If you are producing your own alcohol you will need a manufacturer's license that shows you are legally permitted to produce your own alcoholic beverages.
- Like most businesses, you will need an employer identification number (EIN) or federal tax ID (FTID).
- You will need an ecommerce business license, which shows the government that you’re permitted to do business online.
- Your ecommerce shipping license will also be required to help the state government track which businesses sell products to other states.

There are also state laws that govern the delivery of online alcohol sales. Be sure you are aware of the laws in your state.


Location, location, location—can you go live there?

Where you film your live ecommerce event is another important legal consideration. You need to have the right to be where you are filming. Additionally, you need permission to film in that location—because authorization to be there and permission to film there are two different things.

You’re likely safe from a legal standpoint to film on public property. But even public property comes with some restrictions. For example, you can film on the street but can’t block traffic. And a public school is public property, but if you’re trying to film there, you will understandably run into issues.

Many cities require a permit for commercial live streaming aka live shopping streams, so be sure to look into your city’s bylaws beforehand. 

The safest place to film? Your own property or a studio you’ve rented with the express purpose of filming your live ecommerce show.


The importance of releases

If you are filming in public, you need to consider releases. Everyone has the right to privacy—the right to control information about you and how it is shared. Additionally, the Right of Publicity is the right to protect your name and likeness from being exploited for commercial gain. 

What does this have to do with your live shopping event? If you are filming in a public place for commercial purposes, you need to get consent from everyone filmed during your broadcast.

This is why you often see movie locations cordoned off—to avoid having random people appear in the background.

And when you are filming and broadcasting live, it’s not as easy as editing a person out after the fact. So if you are set on filming in a public place, ensure you have an area that isn’t full of people. If someone does come into frame, get them to sign a release—it can save you from potential legal issues down the road.


Full disclosure… you need to be transparent to be compliant

While some kinds of advertising are pretty straightforward, it’s essential to be transparent about what is and isn’t an ad. 

Going live on your brand’s account and promoting your brand’s products is a clear advertisement. But what if you have an influencer going live on your channel to sell your products? Or an influencer goes live on their own channel to to host a live shopping event? In these cases, the waters can get a little muddy about what is and isn’t an ad.

So make it crystal clear and avoid any issues with the United States Federal Trade Commission (FTC) laws. Disclose at the beginning of your live stream to your audience that they are watching paid content.

You can call it whatever you want—sponsored, paid ads, or just plain advertising. As long as you’re transparent, you’re compliant with FTC laws.


Find a trustworthy team help you navigate every aspect of live shopping for your brand

Now that we’ve covered the six biggest legal concerns you should know when planning a live shopping event, let's talk about the easiest way to stay compliant. Finding a team and platform you trust is the key to creating shoppable live content that won’t break any laws.

With Stage TEN, we help you navigate every aspect of live shopping. From the technical aspects to the legal considerations, we give you everything you need to create a live shopping channel that converts. 

Let's get you set up!

Published by Stage TEN May 17, 2023
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