Written by Fatin Ismail
The e-commerce world thrives on speed and convenience — but legal obligations do not disappear when business moves online. Whether you are selling through a marketplace, running your own platform, or shopping as a consumer, each digital transaction creates rights and responsibilities.
E-Commerce Legal Landscape
E-commerce has revolutionised the way businesses and consumers interact. However, while technology has changed the mode of doing business, the law continues to apply. The same principles that govern traditional commerce — from fair trading to product safety — extend to online transactions, though often with added complexity.
In Malaysia, various legislations, which include but are not limited to the Electronic Commerce Act 2006, Consumer Protection Act 1999, the Personal Data Protection Act 2010, the Penal Code, the Communications and Multimedia Act 1998 play key roles in regulating the online marketplace.
Compliance with these laws is essential to ensure transparency, accountability, and consumer trust in the digital economy.
Data Protection and Privacy
Online businesses handle vast amounts of personal data, from contact details to payment information. Under the PDPA, organisations must ensure that data is collected, used, and stored responsibly. This includes obtaining consent, limiting data retention, and implementing adequate security safeguards. A data breach can expose businesses to not only regulatory penalties but also reputational harm.
Product Liability and Consumer Safety
E-commerce does not eliminate a seller’s duty of care. Products sold online must be safe, properly labelled, and accurately described. Misleading information or unsafe products can lead to liability under consumer protection laws. Whether a seller operates through a third-party platform or their own website, accountability remains.
Advertising Standards and Fair Trading
Digital marketing — including influencer promotions and social media campaigns — must comply with advertising and trade description laws. Businesses should avoid exaggerated or deceptive claims about pricing, quality, or performance. Disclosures of paid partnerships or sponsorships are not just ethical; they are increasingly expected by regulators and consumers alike.
Consumer Redress and Platform Obligations
When disputes arise, consumers should be entitled to fair and accessible redress mechanisms. Online platforms may also bear responsibilities to facilitate dispute resolution and ensure fair trading practices. Clear terms of service, transparent refund policies, and responsive customer support systems help reduce legal risks while strengthening consumer confidence.
Illegal Substances or Items
The buying and selling of illegal substances or items online remain penal offences. This action is prohibited and subject to enforcement under criminal law, regardless of whether the transaction occurs through social media platforms, messaging applications, or online marketplaces.
Engaging in such activities not only violates national laws — including those relating to controlled drugs, weapons, counterfeit goods, and prohibited products — but may also expose individuals and businesses to severe legal consequences such as fines, imprisonment, and platform bans.
E-commerce operators are likewise expected to implement proactive monitoring and reporting mechanisms to prevent the distribution of illegal goods on their platforms. Compliance with these obligations helps uphold public safety, consumer trust, and the integrity of the digital marketplace.
Adapting Law to the Digital Era
Digital does not mean deregulated — it means adapting existing laws to new ways of doing business. E-commerce participants must navigate a complex but familiar legal environment, where compliance and good governance form the foundation of sustainable growth.
As Malaysia’s digital economy continues to expand, businesses that proactively integrate legal compliance into their e-commerce operations will not only avoid disputes and penalties but also build stronger, more trustworthy brands in the eyes of their consumers.
To read more on E-commerce disputes, click here.
Published on 16 October 2025