Latest / Honest Ecommerce / ADA Demand Letters: How TestParty Defends Shopify Brands

Transcript

ADA Demand Letters: How TestParty Defends Shopify Brands · Honest Ecommerce

• speaker-0: I sell bagels online. We're doing great. I've been a test party customer for seven months. I just got a a a demand letter today. What happens? speaker-1: Yeah, and that's obviously the annoying thing is that that might still happen, right? Because anyone can file a demand letter for anything. speaker-0: You can sue anybody in America for anything. speaker-1: I think the challenge is like, okay, well if you're right, you you then have to pay to prove that you're right. speaker-0: Honest ECommerce is a weekly podcast where we interview direct-to-consumer brand founders and leaders to find out what it takes to start, grow, and scale an online business today. Hey, everybody. Welcome back to another episode of Honest E-Commerce. Today I'm welcoming the show not one but two brilliantly smart individuals solving an extremely annoying problem in the direct-to-consumer ecosystem, especially here in America, where some of these brands are getting hit with some ⁓ Litigious lawsuits. ⁓ it's quite frustrating. We've dealt with it at the agency. I know that everyone is going to know exactly what we're talking about in short time. Michael and Jason are coming to us from Test Party. Welcome to the show, gentlemen. Thanks. speaker-1: Chase, great to ⁓ great to be here. speaker-2: So much. speaker-0: Absolutely. So ⁓ for those that are unaware of Test Party and kind of the solution you bring into market, ⁓ what's the elevator pitch? What are you guys doing over there? speaker-1: Yeah, so super quick elevator pitch, we keep companies from getting hit with ADA lawsuits. And the way that we do it is we fix the source code your website. We're the only player that actually is gonna come in and fix your website. ⁓ we do that using a bunch of different tools, ⁓ agents, automated scanners, ⁓ manual testing, scanners that we've built ourselves that are one of one internally. ⁓ and based off all of that, we use a bunch of coding tools ⁓ directly in your code base to fix the issues. So we're currently working with over 130 brands across the US and Europe, ⁓ major brands that you've probably heard of, you know, Leline, ⁓ Lavaine Bakery, Peak Design, you know, Dime Beauty. There's so many other ones, Q Yana that we work with. And yeah, we keep all of them compliant and also improve their SEO and GEO by doing it. speaker-0: Absolutely. It is a very unique tool out in ⁓ in the landscape there. So before we get into how you guys are are differentiating your product and and helping these merchants, ⁓ quickly maybe some education, like exactly our like, you know, if I haven't got served with an ADA lawsuit yet and I don't know what that is, which would be surprising for you know, our listeners here, I feel like most of them are quite in the know. But you know, what what are what's happening in the ecosystem? Why why is this a problem? speaker-2: What speaker-1: Yeah, I mean what tends to happen is ⁓ there's a couple like ambulance chasing law firms. We see it being the same like fourteen to fifteen firms that will essentially give small payouts to people who are blind or low vision or have disabilities to file ⁓ a lawsuit on behalf of a firm against a specific company. ⁓ that's not an issue if if the company actually has issues on their website. But what tends to happen is everyone can get sued, whether you're compliant or not. ⁓ What also tends to happen is when people look at you know what to do in these sorts scenarios, just because you fix your site doesn't mean that you're off the hook. Right. And so a lot of people have to end up paying settlements. So there becomes this kind of like weird economic arbitrage where even if you're compliant, the cost for you to defend your compliance might cost $15,000, $20,000, $25,000, in addition to getting compliant, whereas the settlement might only be 10 or 12. So a lot of businesses, ⁓ we actually saw last year there's about 5,000 demand letters filed. We'll just choose to settle for for 10 grand. And these are the public demand letters that we see. There's a lot more that are private. So we estimate, I mean, that's why most businesses have heard about this. There's probably 10,000, 15,000 demand letters, saddle demand letters, and actual publicly filed demand letters every year settling for, you know, these kind of low five figure range, right below the threshold of actual litigation or actual getting getting in front of a judge. We have seen with certain cases, like there's one called Jones v. Moscot, ⁓ you know, with Moscot Glasses Company. ⁓ where they they took it all the way. They're like, we're gonna pay the twenty five or thirty grand to prove that we're compliant. And when they did this, the judge completely threw out the case ⁓ and said, Yeah, you guys are compliant. There's there's no reason why you have to pay any sort of ⁓ damages here or class action lawsuit here. ⁓ but that's that's the situation I think of of if you make your site compliant, you truly do have a case. And if you don't, you tend to be in this weird economic arbitrage that exists in the legal system where it's too expensive to defend. ⁓ And even if you're right or whether you're wrong, people just choose to settle either way. speaker-0: And if I had received a demand letter once and chose to settle, is this issue behind me? speaker-1: Probably not, right? Because there's so many of these firms. Like maybe it's behind you once, but not the other 13 major firms that tend to do these sorts of filings. And also they're filed by state. So you can be in a second district of New York, you can be in Illinois, you can be in California, right? These are some of the big hotspot states. There's Minnesota, has a lot of filings as well, a bunch in Florida. ⁓ and so, you know, at least in our case, because we've seen so many of these cases with customers coming to us with a lawsuit in hand, what we end up doing is having essentially defense packets. Like we know if you're a test party customer and we fix your site. Here's how we recommend defending, here's some legal counsel that we'd recommend hiring, all that sort of stuff. but yeah, it's this is the really interesting challenge that we're trying to solve. How do we change the economics so the brands are the winners and not the legal system, right? Which is incentivized to essentially pay lawyers out fees. speaker-0: Yeah, and I guess it's a good time for me to get out ahead of this that everything we're talking about here is kind of hypothetical. We are not lawyers and we are not giving you legal advice. ⁓ so obviously just want to be upfront about that. speaker-1: ⁓ Of course. My mom would be so disappointed in me, you know, she wanted me to go to law school so bad. And here I am just as a tech a little tech nerd. speaker-0: And and now you're fighting lawyers. speaker-1: Yeah, exactly. Maybe that's why. Take that, lawyers. speaker-0: So all right. So ⁓ now these these ADA lawsuits come from there is a law on the books ⁓ that is terribly worded and is being, in my opinion, ⁓ extrapolated and like forced to fit in a window for an e commerce retail view. And that's where they're trying to get the grounds for these lawsuits. So first and foremost, the problem and and y Michael touched on it before. It's like we're not saying that websites shouldn't be accessible. We're saying the absolute opposite. All websites should be accessible for folks that need to browse and shop in interesting ways that aren't kind of native, where you can you you aren't kind of experiencing any hardships in n navigating the website. But what we're saying is that the lawsuits are filed because of a terrible, terrible law. ⁓ do you have much more to say about that? speaker-1: Yeah, I the the law itself that's kind of the the base of this is the American Disabilities Act, the ADA, which was passed in the nineteen nineties. Some of the big proponents were like the Kennedy family and and a few others. ⁓ and you know, what's interesting is that it was actually passed during a Republican administration, right? The first Bush president ended up passing this, ⁓ this law. And ⁓ what's interesting about the law is it of course when it was passed in the nineties there was no e commerce. So it was mainly focused on like Yeah, it's building yeah, on buildings, you know. speaker-0: Yeah, it didn't exist. speaker-1: ramps, you know, how high is the sink in your bathroom, do you have elevators in your building? And that by and by and large has actually been super, super helpful and positive. And actually if you're a physical e commerce business, depending on your revenue, there actually are tax breaks that you can get for making your physical store more compliant. Right. And so that that's great. right around COVID, some lawyers saw that you could use these same laws around discrimination in physical space. To do what was done in the early two thousands, you know, drive by lawsuits where people literally drive by a building and if they didn't see a ramp, they'd file a lawsuit. Right. And they said, Hey, we could do the same thing online. And so there was a whole class of people who did the same sort of stuff online saying, you know, maybe it's not a ramp, but a blind person can't use this website because their screen reader doesn't work with how the site is coded. And that became the same kind of sort of claim from offline to online. Of course In the physical space, like there are literally building laws. You know, your sink has to be this height, your ramp has to be at this pitch ⁓ and this angle. Whereas online, there are guidelines, the web content accessibility guidelines, but none of this is written down in the law. Like it's not written down in the ADA. And so there's this gray area where it's really hard to say we do these things by law because of how it's written in digital space, whereas you can in physical space. And so what that results in is this gray area where people can file claims, even though you are passing all these sorts of things, and it requires you having to go and defend yourself ⁓ to a judge who once the judge sees it, they're like, Yeah, of course, this is the global standard, the WCAGE that people you know agree with, but you have to go prove it. Whereas in physical space, where it's written down in in the law and the ADA and all these kind of amendments themselves, it's a bit of a different case. So that's a bit of the like the legal background and history. ⁓ and when we first made the company, like even before we started selling into e commerce, like all we did for the first two or three years was just go to ⁓ accessibility conferences and just like actually meet people who had lived experience to hear like what is it like to be a person with a disability in the US and how does it affect offline and online shopping? And I think overall, ⁓ in an interesting way, these these suits have changed a whole class of people's ability to interact with the internet. And it's estimated that it's like many trillions of dollars of spending power either directly From people with disabilities or from their families. You know, people are more willing to work shop in a Walmart than a target if Walmart's more accessible. And that affects not just the blind individual or or their family or the disabled individual, but their whole family as well, right? And and their extended family in terms of where they want to shop. So it actually is pretty interesting because we see those numbers in our customers that they tend to be, you know, more profitable, make more revenue as well. speaker-0: Absolutely. And I I do want to point out that the compliance kind of standards that you spoke about earlier. So the the web content accessibility guidelines. Yeah. This was it was kind of created independently and has nothing it it references the Americans with Disability Act, but it is not tied into that law by any means. But it has become kind of a cornerstone of like this is how you can make a website. Compliant, even though it literally isn't mentioned at all. ⁓ But the one thing about WCAG that I always like to point out, or maybe it just to distill down a little bit more, is like there are levels of compliance, and like it isn't a a binary yes or no answer to whether or not you are compliant, which adds just a whole other level of sophistication to all of that. speaker-1: Yes. Yeah, exactly. That's exactly it. And ⁓ you know, it's like industry accepted knowledge tends to become like the baseline of of the law in a lot of industries if there isn't a lock codified. ⁓ and obviously that's one thing that we're pushing for when whenever we could travel to DC a couple times a year is ⁓ hey, can we get these laws to be really clear? So it's less of a gray area as to what actually needs to be done. And I think that preserves for businesses a standard that they have to comply by. And it still gives, you know, if if you're violating that. a clear path on how to argue that and it gives people who have disabilities really clear answers for what good looks like that that will make their life better as well. So that's the dream scenario here. Unfortunately, you know, as part of our VC funded roadmap, that's that's that might not happen next year or in the next few years, but it's definitely something that we want to try to push for in the industry, just broadly for speaker-0: Change. So back six years ago, COVID is is happening and these lawsuits are starting to come about. ⁓ there were some early entries into the marketplace as proposed solutions, and they ⁓ kind of all got dumped into like a bucket called like an overlay solution. ⁓ could you explain what that kind of is and does and then some of the How it ties into this gray area and maybe potentially isn't actually helping. speaker-1: Yeah, Jason, I know you're you've been thinking about this a lot. Sure. speaker-2: So th these overlays or widgets as they call them, there's a couple of really famous ones out there, like Accessibility and Userway. And there are actually quite a few widgets if you just look across even the Shopify app store. I think the easiest way to think about them when we describe them is like the difference between an Instagram filter versus Photoshop, right? With a when you're posting a photo using an Instagram filter, you can make it look Different, you know, more saturated, more contrast, and but you're not changing the photo itself. You can never actually change the underlying photo. Whereas with Photoshop, you can literally like clone this part of the picture and like try to like completely doctor the image essentially. but in a in a very like creative professional way. I think that so overlays are much more similar to the Instagram filter approach because they don't change anything underlying. They don't change the code. They're actually really easy to install, just one line, and that's kind of their allure to at least e commerce is they're they feel similar to a an attentive widget or some chat bot that you just install with one line. But their promise is that they're gonna fix every single accessibility issue on your site. And so what they can do is they can increase, you know, certain text sizes, they can ⁓ change like certain colors on the page, but they can't fix the structure of the page. If your if your navigation if your top navigation isn't supporting keyboard or supporting screen readers, they won't be able to just add that functionality to what you already have because that's something that's much deeper in the code. You have to like respond to these events that happen when a keyboard user tries to interact with your site. And so that's kind of where their promise fell short and essentially the FTC find ⁓ one of the major players there for ⁓ misadvertising and and false promises to customers. And I think that the industry is largely moving away from that, other than, you know, very small businesses, you know, for the first time they're trying to tackle this problem and they don't understand ⁓ that this is very much a band-aid solution, like in the almost a literal sense on the website of just literally putting a widget there. And when they realize this it's usually because they get sued again and they try to say that the widget is sufficient, but it's not, and then they they try to pursue a solution like ours that's much more ⁓ much more at the root cause. speaker-0: Hey, everybody, just a quick reminder. Please like this video and subscribe if you haven't. We're releasing interviews like this every week. So don't miss out. Now back to the interview. And I've seen this posted ⁓ online, and I don't know if you have any ⁓ proof behind this claim, but that ⁓ it's starting to get to a point where these popular widgets are being used as a way to become targeted by these lawsuits. speaker-1: Yeah, we we have evidence of that in in looking at some of these demand letters. Like we're at a very trusted part in our customers' life cycle. When they come to us when they're getting a lawsuit in hand and they have to pay a settlement and they're like, What do we do? And so a lot of our customers will just send us their demand letters and we've seen sp in specific demand letters, like a lot of these widget companies be named explicitly. Essentially like evidence that if you have these widgets, they're they're they're gonna say specifically because you use this widget, we're filing this claim. ⁓ and so that's that's been interesting to see that there are cases where there's a paragraph of like twelve widget providers, many of whom are on the Shopify Ass store where you're they're gonna be named explicitly in some of these ambulance chasing lawsuits. speaker-0: Yeah, that's that's ⁓ unfortunate that when you think that you ⁓ have found a solution to a problem and then it comes back to bite you in the butt. The overlays ⁓ you know, qu the quick answer is it doesn't seem like they are going to protect you from getting a lawsuit. ⁓ how is test party different? What are you doing that is actually going to protect my brand? speaker-1: Yeah, I'll I'll talk about what we're doing differently and then also how we came to the idea, which was mostly Jason's experience because it does help inform the solution. ⁓ and what we do differently is is fixing it at the source, right? And what that means is rather than you know adding a color filter on top of your website, we're actually going into the website and maybe adding alt text. We're going into the website and adding more descriptive link text. We're rearranging the code, the heading levels, for instance, so that it's a logical heading order. There's all these things that we're doing that are mostly non visual, that actually just make it an easier experience for someone with a with a screen reader device to read your website. I like to think of it as like, yeah, we're building the ramps, we're building the revolving doors, we're building the elevator in an existing building, versus what, you know, an overlay provider might do, which is just adding ⁓ something that maybe is a visual experience that doesn't change anything, change anything else. The benefit of that is the way that a screen reader interacts with a website is by looking at the code of the site, right? And looking at what's on there and reading it out and so on and so forth. That's the same thing that an AI agent would do or a a Google search bot when they're trying to pull your data for SEO. And so making your website better for an assistive device, which is in effect just a computer or a tool, makes your website better for for all computers and tools, not just the accessible ones or the accessibility focused ones. And so that's been a a great like second finding. beyond like the first act, which is social impact focused and all that sort of stuff. ⁓ but I think it's always interesting to hear J from Jason, like from his stories on like how we actually got to this idea. ⁓ 'cause we had been building stuff for years in the social impact space. And accessibility to us just seemed like the no brainer when we kind of stumbled upon it three years ago. speaker-2: Yeah, I I was a I was a software engineer at Twitch about like three years ago and they were similarly this this is not a unique problem to just e commerce. ⁓ most large companies ⁓ outside of e commerce have all experienced ⁓ accessibility lawsuits and Twitch was hit by one of these. ⁓ I was on the iOS mobile team and this was the first time that I'd seen legal really get involved with engineering, which was a very intense experience. And it was also when I noticed that a lot of it was just so unfamiliar to even some of the best engineers that I knew, which was very surprising because for you know feature work, I think that there's a very clear ⁓ experience gap between junior, senior and staff engineers. And this one, we were all kind of scrambling in order to feel these all completely unrelated tickets because accessibility obviously covers entirely different classes of disability and the features required to support those are quite different. And so from that experience, I think that Michael and I, you know, learned a lot from be being able to see how a site gets fixed. And it took a really long time. It took maybe like, you know, three to six months. And they certainly didn't address every single defect out there because they're a custom built mobile app, custom built w a web app as well. And I think that that's when we looked at certain other ⁓ companies that were getting these accessibility lawsuits and something really struck a struck resonance with them that we could actually help them, especially Shopify, I think like with this entire ecosystem of ⁓ liquid and hydrogen and very, very standardized ⁓ themes makes this entire fixing process much more streamlined and it makes sense for an AI agent product to be able to find those patterns and essentially learn from how we fix sites ⁓ at first and become a productionized version so that every Shopify store can get the same type of ⁓ compliance filter that you know as as if we were doing it by hand. So yeah, I think that that that was kind of the origin and we just went so much deeper into Shopify and realized that the entire ecosystem was kind of just riddled with this with this ⁓ troll lawsuit industry and I think that we've done a great job of making sure that everyone, no matter how big or small your store is, like Michael said we have 130 some, it really ranges in terms of you know size of ⁓ revenue band between our stores now, but all of them get to have the same level of accessibility because of what we shipped as a product. speaker-0: Absolutely. And Michael, earlier you mentioned that ⁓ you are meeting these brands in a very unique crossroads where they have already been hit with a lawsuit. At that point I, you know, I'm already screwed. Are you gonna be able to help me? speaker-1: Yeah, it this is this has been actually a great a great case study. We've seen parents come to us with a lawsuit. ⁓ we sprint to fix in like seven days, and then they take that evidence to a judge, to their law firm, to say, Hey, you know, we didn't know this was an issue and we know you got your demand letter, but we we fixed it already. And so we've seen cases where we've we've done a fix within a week of them getting even like a demand letter email. And because it's trolls, right? Like their incentive is to go after this this the slowest and the the lowest hanging fruit. I often say, like in this case when you're outrunning trolls, it's kind of like outrunning a bear. Like you're not trying to be the fastest person, you're just trying not to be the slowest. And by not being the slowest, right, you're you're giving yourself room to to build up your systems until you have evidence of compliance and the whole program in place. So yeah, be we've definitely seen people settle for one, two thousand dollars instead of the usual twelve or thirteen. even when they are coming to us before being a customer at the lawsuit in hand. And then of course with our current customers, yeah, our incentive is to push back always because we know that their sites are compliant and they have months and months and months of evidence. speaker-0: Yeah, talk to me about that. If I am a ⁓ using the product, you know, and you've got we've been, you know, ⁓ you know, I I sell bagels online, we're doing great. I've been a test party customer for seven months. I just got a a a demand letter today. What happens? speaker-1: Yeah, and that's obviously the annoying thing is that that might still happen, right? Because anyone can file a demand letter for anything. But then what happened is great. speaker-0: You can sue anybody in America for anything. speaker-1: For anything. Right. And that's and that's that's that's a to me, I mean, it makes sense, but I think the challenge is like, okay, well, if you're right, you then have to pay to prove that you're right. Right. And so like we're trying to tip the scales where the cost to quote unquote pay to prove gets really cheap, right? Whether it's using one of our kind of law legal partners who does our s our cases for for usually a pretty reasonable amount compared to finding your own 'cause you're specialists or and or ⁓ we provide a lot of evidence, right? And so like essentially you'll have a SWOT team of like Of our company helping you to defend your case with evidence. Like if there's anything that they're sending in a letter, we go point by point to see if it's legitimate or not. Ninety percent of the time it's not legitimate because it's it's just these ambulance chasers using templated ⁓ letters. And then we also will do, you know, other interesting tactics like like looking at like, okay, ⁓ based off IP addresses, do they actually visit the site on this day? Is the lawyer who's filing this demand letter is their own site even accessible? Right. There's all these other things that that we've seen be helpful for defense that we can build into that we do build in for our customers in in defense packets. But in in our case, like less than five percent of our current active customers have been hit with a demand letter, which is ⁓ far better than the average ⁓ accessibility company, where you there's like a thousand widget lawsuits in the last 12 months across the 5,000 companies, so 20% incidence rate. So we're pretty happy with how with how we've been performing with our customer base. speaker-0: Absolutely. Now, ⁓ we talked a whole bunch about how this all works and what happens if you do get sued. You know, I'm assuming that there might be some listeners out there that are like, Whoa, is my website accessible or not? And I know the answer to this question, but n our listeners don't. If I want to go test my website and figure out what my exposure looks like, or maybe just start a conversation with you over at the test party team. What should I do? Where should I go? speaker-1: Yeah, well definitely reach out to us, testparty.ai. I I feel like we're the best company in the space, specifically for Shopify, especially. But even outside of that, there's great tools that are free. You know, Xcore, Google Lighthouse, Wave, ⁓ those are all kind of free tools that you can at least get a quick scan and see where you're at ⁓ on your site. and of course Shopify out of the box tries to make their stuff accessible. But the more things you tweak and change, the more likely you are to just to break things. And it naturally happens even company like Twitch, where Jason used to work, that was owned by Amazon, like multi billion dollar acquisition. they broke stuff with with their thousand engineers, ⁓ and they continue to break stuff. So it's just it's just a natural process. And so yeah, you know, obviously we're always happy to help, but even if you do it on your own, our mission as a business is just to make a more accessible internet. And that doesn't always tie up to revenue. You know, sometimes we'll we'll do deals that are not, you know, cash flow positive because we know it's gonna have a bigger impact. And that to us is more important. So ⁓ happy to give away those free resources for Axe Core, Wave, Lighthouse, ⁓ so people can Google them and and make sure that your own sites are accessible. speaker-0: All right, Jason, Michael, thank you guys so much for coming on the show today, sharing all those amazing insights about accessibility. speaker-1: Awesome. Thanks so much, Chase. Great to great to have you. Good to see you. speaker-2: Thanks, Chase.