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ADA Compliance Lawsuits Converge On eCommerce in 2019

ADA Compliance Lawsuits Converge On eCommerce in 2019

It’s 2019. Accessibility and social justice are everything. As a result, ADA compliance lawsuits are being filed in record numbers, and ecommerce companies are a major target. Here’s the info you need to understand the issue and protect your online business.

ADA Compliance Crackdown

Although the U.S. Department of Justice has delayed the release of the latest federal accessibility guidelines, companies are expected to comply with the Web Content Accessibility Guidelines (WCAG) 2.0 AA. Resulting from this lack of federal guidance, users with disabilities are lawyering up against even the biggest online behemoths. Among these, Amazon, Apple, and Nike have been called out for failure to comply with Title III of the Americans with Disabilities Act, along with hundreds of other businesses, driving a torrent of actions.

According the the Bureau of Internet Accessibility, there were ”at least 814 federal web accessibility lawsuits filed in 2017, but an assessment of the issue by ClassAction.org shows the number of lawsuits [filed] in 2018 may far surpass that number.” In fact, in the first two months of 2018, roughly 200 different ADA lawsuits were filed against websites, at which point retail law advisory Goulston & Storris announced there was “No Relief in Sight”. While it remains unclear just how many lawsuits have been brought since last March, it is expected for this surge in suits to continue.

Why Haven’t I Heard About This?

If you haven’t been targeted yet, chances are you know someone who has. If not, the reason you haven’t heard about this is simple: The Wayfair case. The recent explosion of content on the Supreme Court’s South Dakota v. Wayfair decision incited a media frenzy that circled ecommerce’s corner of the web, from top news agencies to the smallest tech blogs. With the industry distracted by a wide-reaching tax-compliance issue —and retail giants like Nike keeping tight-lipped about their lawsuits— the compliance issue has remained largely under the radar.

In 2018, more than 13,000 suits were filed over online ADA compliance as of October, with ecommerce playing a large role. It’s not the issue alone that’s troubling, it’s the rate at which suits are being brought that’s startling. Last year, 7663 suits were arraigned in federal court, which at the time was a 16% increase over the previous year (see chartL ADA Title III Lawsuits in Federal Court: 2013-2017). With an ever increasing number of lawsuits looming on the horizon, the industry may face a 20% increase over last year for 2019. “I spoke with someone about these suits during Magento Imagine 2018. Just as the conference was ending, they received an email saying their own site had been targeted and served an ADA suit.” Adam Morris, Redstage CEO said. “Ecommerce companies should make accessibility a priority for the year ahead.”

Can My Site Be Next?

ADA compliance lawsuits converge on ecommerce in 2019, accessibility

While a discriminatory class action suit could spell disaster for any company, the first step is identifying the types of companies that fall into the legal crosshairs. According to the Americans with Disabilities Act, these company categories are as follows:

  • Businesses engaged in an industry affeciting commerce (Title I)
  • Businesses with 15 or more full-time employees (Title I)
  • Businesses operating for 20 weeks or more every year  (Title I)
  • Businesses categorizes as “Public Accommodations” (Title III) including:
    -Inns, hotels, and motels
    -Restaurants and bars
    -Bakeries and grocery stores
    -Hardware stores or any sales/retail outlet
    -Banks
    -Laundromats and dry cleaners
    -Accountants and lawyers’ offices
    -Health care providers’ offices
    -Public transportation
    -Recreation venues
    -Schools
    -Social service centers
    -Gyms

While the ADA compliance is primarily focused on physical locations, Title III states that barring access to people with disabilities in the private sector is discrimination, which encompasses websites. With 15% of the global population living with some form of disability (41M+ Americans), and online shopping being so prevalent – think Black Friday – companies are losing business due to inaccessible websites and continuing to run the risk of being served an accessibility lawsuit.

How is Redstage Being Proactive?

Redstage recently partnered with Siteimprove, an all-in-one software that provides the insights needed to address issues relating to accessibility, as well as SEO, content quality, brand compliance, data privacy, and more.

“The Siteimprove and Redstage partnership is one we’re extremely excited about given our common goal of positively impacting web accessibility.” Siteimprove Sales Director Ted Goldberg Said. “We’re looking forward to working together to help facilitate increased accessibility for their client’s sites as well their own.”
The Redstage team is excited about this partnership, as Siteimprove’s automated accessibility checks help identify website elements that violate WCAG 2.0 guidelines, while also organizing those issues into a prioritized list. By partnering with Siteimprove, Redstage will be able to mitigate risk for our clients while building a strong, overall accessibility strategy.

Conforming Your Site to ADA Compliance

At Redstage, we’ve already had our fair share of engagements with merchants facing ADA lawsuits. “Our clients are seeing increased pressure from legal trolls targeting them because they are not ADA compliant. The ADA compliance rules are vague at best, so companies with an ecommerce channel should have an informed partner to help them.” Redstage CEO Adam Morris explained. To mitigate this risk, Redstage is working with specialized authorities in the ADA field to give clients and readers a comprehensive ADA compliance report.

“ADA compliance contains many elements of a great UX strategy,” says Adam Piken, Redstage’s Creative Director, “Your site should be user-friendly and intuitive, allowing customers to find buttons, check out, get your phone number, or type a question into your live-chat quickly and easily.” In this way, ADA compliance is reinforcing activities ecommerce companies should already be doing.

Most importantly, ADA compliance takes considerable design alterations in most cases, so the best time to get compliant is during your next redesign or site migration. If you’ve been following along with our Magento 1 End of Life Initiative, we recommend putting ADA compliance at the top of your Magento 1 to Magento 2 migration checklist.

Get Your ADA Compliance Check Now

If you think your site is at risk of being targeted, email us and we’ll get you set up with a team of experts to help identify and eliminate potential access barriers that may impede access and usability for your users, while safeguarding your business from legal action.

SCOTUS: States Can Charge Ecommerce Sales Tax… But There’s More To The Story.

SCOTUS: States Can Charge Ecommerce Sales Tax… But There’s More To The Story.

States Can Force Ecommerce Sales Tax

 

States Can Charge Ecommerce Sales Tax

So, it finally happened. The South Dakota state government can now charge eCommerce sales tax for online businesses.

This morning the US Supreme Court announced the 5-4 ruling, overturning a 1992 decision (Quill Corp v. North Dakota) that barred states from collecting sales tax from businesses with “no physical presence” in their state. The high court ruled against Wayfair, Overstock.com, and Newegg, sending their stock price into a fall (along with that of Amazon, Etsy, Ebay and more). As a result of the ruling, many fear the gates have been opened for all 45 states that collect sales tax to use the Wayfair decision to charge Internet sales tax. When this happens, online shops will likely begin charging customers at the checkout, driving up eCommerce prices for customers.

However… Consumers are already required to report their online purchases and pay the applicable taxes. According to CNN, “Last year, states could have collected as much as $13.4 billion in additional online sales taxes, according to the General Accountability Office. Although buyers are technically supposed to add up their purchases and pay all the applicable taxes along with their regular filing, few do.” As a result, some argue this decision is fair, especially when one considers eCommerce’s massive impact on the U.S. economy.

In the majority opinion, Justice Anthony Kennedy wrote, “The Internet’s prevalence and power have changed the dynamics of the national economy.” He also mentioned the need for states to collect the tax as digital retail continues to explode, saying, “The expansion of e-commerce has also increased the revenue shortfall faced by States seeking to collect their sales and use taxes.” With eCommerce poised to make up 17% of US retail sales by 2022, the ruling makes sense now more than ever.

Who Wins?

The likely winners in this scenario will be states who can now collect the online sales tax (many more to come), and Amazon, who has been paying state sales taxes for years. While the decision will hurt smaller, non-monolithic eCommerce businesses, Amazon’s competition will now likely face the same tax requirements, keeping Amazon even still again, ahead of the curve.

For now, in South Dakota, the law will only apply to eCommerce sites with more than $100,000.00 in sales revenue from commerce within the state. The state now stands to gain an additional 50 million dollars in revenue annually from the tax. Lastly, as CNBC reports, “[the] states that are likely to see the biggest percentage increase in revenue are Louisiana, Tennessee, South Dakota, Oklahoma and Alabama, according to the Barclays research.”

Want to learn more about the future of eCommerce? Check out our latest podcast here.