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E-commerce Compliance: Protecting Consumers and Marketplaces

How do e-commerce marketplaces maintain compliance with laws, regulatory guidance, and various policies — nationally and internationally? Read further for an overview of how marketplaces ensure compliance and consumer safety while protecting their brands from public and government scrutiny. Then contact us for a quick strategy session.

What is E-commerce Compliance?

Electronic commerce continues to grow at a rapid rate. According to Statista, e-commerce revenue is expected to show an annual growth rate of 8.95%, which will yield a projected market volume of $5.03 billion in the US by 2028.

Let’s explore the laws, regulations, regulatory bodies, and various policies that e-commerce marketplaces must abide by to operate successfully.

How Marketplaces Ensure they meet E-commerce Compliance Requirements

Ensuring that your e-commerce marketplace maintains compliance is no small feat. Here is a breakdown of some of the more notable national and international laws, regulations, and policies e-commerce marketplaces must maintain compliance with — as well as their associated regulatory bodies.

Marketplaces Maintain Compliance with DSHEA

In the United States (US), sellers of dietary supplements are required to follow the legal guidelines detailed in the Federal Food, Drug, and Cosmetics Act (FDCA). In 1994, the FDCA was amended by The Dietary Supplement Health and Education Act  (DSHEA) to “establish standards with respect to dietary supplements”. Now, the market for dietary supplements has more than tripled in size. The US Food and Drug Administration (FDA) is seeking to modernize DSHEA and expand its regulatory authority to ensure consumer safety when purchasing dietary supplements. The proposed changes to DSHEA would “require all dietary supplements to be listed with FDA.” Sellers must maintain compliance with DSHEA in order to sell dietary supplements — or they could face regulatory action from the FDA.

Marketplaces Maintain Compliance with the INFORM Consumers Act

What is the INFORM Consumers Act? The Integrity, Notification, and Fairness in Online Retail Marketplaces for Consumers Act (INFORM Consumers Act) was established in the US by the Federal Trade Commission (FTC) in 2023. In summary, “This bill requires online marketplaces to collect, verify, and disclose certain information from high-volume, third-party sellers,” including making seller’s information available to consumers and maintaining regular reporting methods. Marketplaces must ensure compliance with the INFORM Consumers Act or face possible action by the FTC.

Marketplaces Maintain Compliance With COPPA

The Children's Online Privacy Protection Act (COPPA) was enacted by the FTC in 1998 to “impos[e] certain requirements on operators of websites or online services directed to children under 13 years of age, and on operators of other websites or online services that have actual knowledge that they are collecting personal information online from a child under 13 years of age.” Marketplaces must ensure compliance with COPPA or, “be subject to the review and disciplinary procedures provided in those guidelines in lieu of formal Commission action.”

Marketplaces Maintain Compliance With GDPR, PCI DSS, & BRAM and VIRP (GBPP)


The General Data Protection Regulation (GDPR) was put into effect by the European Union (EU) in 2018. GDPR concerns data privacy and security and is sometimes called “the toughest privacy and security law in the world,” with monetary violations that could potentially skyrocket into the millions. Marketplaces must maintain GDPR compliance if they “target or collect data related to people in the EU.”


The Payment Card Industry Data Security Standard (PCI DSS v4.0) was put forth by the PCI Security Standards Council to “help protect the people, processes, and technologies across the payment ecosystem to help secure payments worldwide.” These are global standards most every e-commerce marketplace must comply with to continue to process online (card-not-present) transactions. The standards ensure consumer data is protected from fraudulent, illicit and/or illegal activity. Marketplaces must continually prove compliance in order to process debit or credit card transactions online.


Marketplaces typically partner with payment service providers who facilitate payments for major card brands. Major card brand policies for payments processed by payment service providers on behalf of e-commerce marketplaces include the Visa Integrity Risk Program (VIRP) formerly known as the Global Brand Protection Program (GBPP). Additionally, Mastercard implements the Business Risk Assessment and Mitigation (BRAM) program. These policies are commonly referred to as BRAM and VIRP (GBPP). Each of these policies ensures consumers are safe from illegal and/or illicit activity while protecting card brands from experiencing brand damage.

Common E-commerce Compliance Challenges for Marketplaces

One of the greatest challenges for marketplaces is ensuring product compliance in all jurisdictions — at scale. They are faced with an overwhelming number of ingredients and products from a multitude of low- and high-risk verticals. If compliance isn’t maintained they could face hefty monetary violations (i.e., fines) from multiple governments and/or the payments companies they partner with.

Furthermore, if regulatory bodies like the FDA or FTC issue warning letters around failure to mitigate product risk, these public notices can cause enduring reputational damage, which can harm your brand.

In a worst-case scenario, inadequate product monitoring can result in the sale of dangerous products that can harm or even kill consumers.

LegitScript Marketplace Monitoring Helps Your E-commerce Marketplace Maintain Compliance

LegitScript Marketplace Monitoring incorporates the largest database of high-risk and problematic products and ingredients along with human analysts to vet potential product violations before notifying you — eliminating false positives. We track 175+ regulatory bodies across 100+ countries in 60+ high-risk areas.

Ensure e-commerce compliance, avoid monetary violations, and protect your marketplace from brand damage with LegitScript.

Contact us for a quick strategy session.

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