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E-commerce and the law

The Electronic Commerce (EC Directive) Regulations 2002 seek to encourage consumer confidence in on-line trading and to help businesses understand what they have to do to comply with the law.

Legislation

Do the regulations apply?

The Regulations may apply to you if your business does the following:

  • Advertises goods or services online (internet/mobile phones/interactive TV etc);
  • Sells goods or services to businesses or consumers online;
  • Distributes email promoting goods and services.

Required information

Businesses who advertise or sell goods or services online must provide the customer with the following information:

  • The full name & geographic address of the business;
  • Contact details including an email address.

Other information that must be given if it applies:

  • Membership of trade associations;
  • If you have been authorised to advertise or sell goods or services, details of the supervisory authority, e.g. financial services;
  • If your business is part of a profession whose qualifications are recognised across Europe , details of the body or institution with which you are registered, details of professional titles, the member state in which such titles were granted and a reference to the rules and how customers can access them;
  • If online sales are subject to VAT, details of the VAT number. If prices are referred to they must be clearly indicated together with delivery costs.

Commercial communications (such as emails)

If you actively promote goods or services by commercial communications such as an email the communication must:

  • Be clearly identifiable as a commercial communication;
  • Clearly identify the business or organisation who sent it.

Other information that must be given if it applies:

  • Discounts, special offers, promotional competitions and games etc must be identified as such;
  • Qualifying terms and conditions must be easily accessible and presented clearly and unambiguously;
  • Unsolicited communications must be clearly identifiable as such as soon as they are received by the customer.

Online contracts

If customers can place an order online the following information must be given in a clear, comprehensive and unambiguous manner before the order is placed:

  • Technical steps to follow in order to conclude the contract including the point at which customers will commit themselves to the contract;
  • Whether the contract will be filed by the business and whether it will be accessible to the customer;
  • Technical steps to follow to amend any inputting errors prior to placing an order.

Other information that in general must be given if it applies:

  • Codes of conduct relevant to the particular order;
  • Allow terms and conditions to be stored by the customer;
  • Acknowledge receipt of the order electronically without undue delay.

NB: Most of the above requirements do not apply to online transactions between two businesses if both parties agree to opt out of them.

Consequences of not complying with the regulations

The Regulations are intended to break down marketing barriers across the UK and Europe and to boost consumer confidence in e-commerce and therefore compliance could increase your market opportunities.

Non-compliance with the Regulations, however, could have serious consequences in that customers may be able to:

  • Cancel their order at any stage without being in breach of contract;
  • Seek a court order against you;
  • Sue for damages if they have suffered a loss;

Consumer Protection Services may also be able to apply to the courts for a "Stop Now Order" (a type of interdict) if failure to comply harms the interest of the consumer. Failure to comply with the Order may then be held to be a contempt of court which could result in a fine and/or imprisonment.

Other online sale requirements that apply

Finally, do not forget the overlapping information requirements of other laws:

  • Consumer contracts - distance sales
    The rules when you form contracts at a distance, including information requirements and cancellation rights.
     
  • Consumer contracts - off-premises sales
    The rules when you form contracts away from your business premises, including information requirements and cancellation rights.
     
  • Consumer contracts - on-premises sales
    The rules when you form contracts on your business premises, including information requirements.
     
  • Company & business names
    If the service provider is a company, the Companies Act 2006 requires that the place of registration should be stated (e.g. "XYZ Enterprises Limited is a company registered in England and Wales with company number 1234567").  

 

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Article utilities:  Bookmark and Share Print Print this page Last updated: 05 Jun 2015 at 13:50