E-commerce and the Law

Introduction

E-commerce is all about selling goods and services via the internet. The trader and customer are not face to face at any point, with business conducted remotely, regardless of location. This can pose a number of challenges to the formation and enforcement of contracts. A number of legislative initiatives affect business conducted online - they can be complex and change regularly. As far as e-commerce transactions are concerned, the legislation is primarily intended to ensure that online contracts are legally binding. The ways in which electronic marketing can be undertaken to promote the services of e-commerce providers are also regulated. This guide introduces you to the various regulations and provides practical advice on how to ensure that you comply with your legal requirements. However, it is not a substitute for professional legal advice.

E-commerce Regulations

The E-commerce Regulations came into

force in August 2002. They implement the

European E-Commerce Directive into UK

law and one of their main aims is to ensure

that electronic contracts are legally binding

and enforceable throughout Europe.

The Regulations apply to businesses that:

• sell goods or services to businesses

or consumers on the internet, or by

email or Standard Messaging

Service (SMS) ie text messages

• advertise on the internet, or by email

or SMS

• convey or store electronic content for

customers, or provide access to a

communications network

They do not cover direct marketing by

phone or fax.

To comply with the general information

requirements of the E-commerce

Regulations 2002 you must give recipients

of your online services:

• your business' name, geographic

address and other contact details

including your email address

• details of any publicly available

together with your registration

number or equivalent

• the particulars of the supervisory

body if the service is subject to an

authorisation scheme

• details of any professional body with

which you are registered

• your VAT registration number

If your website refers to prices, these must

be clear and indicate whether they include

tax and delivery costs.

Businesses frequently promote their

services via telephone and fax. There are a

number of regulations that apply to this area

and it is important that your business is

aware of them. This will ensure that you are

acting legally if you undertake a marketing

campaign using these media.

The Telecommunications (Data Protection

and Privacy) Regulations regulated direct

marketing by telephone and fax. Both the

Telephone Preference Service (TPS) and

the Fax Preference Service (FPS) were

established as a result of these regulations

and are monitored by the Information

Commissioner. These regulations were

superseded by the Privacy and Electronic

Communications Regulations 2003 in

December 2003. For more information, see

the page in this guide on the Privacy and

Electronic Communications Regulations.

E-marketing activities are regulated by the

Privacy and Electronic Communications

Regulations that came into force in

December 2003. The Privacy and Electronic

Communications Regulations superseded

the Telecommunications (Data Protection

and Privacy) Regulations. The new

regulations include additional rules which

legislate against unsolicited emails or

Standard Messaging Service (SMS) ie text

messages, commonly referred to as spam.

They prohibit sending direct marketing

communications by email where the identity

of the person who sent it is disguised or

concealed. They also prohibit marketing

emails that do not provide the recipient with

a valid address they can use to request

such communications cease.

The Privacy and Electronic Communications

Regulations are enforced by the Information

Commissioner's Office (ICO). If the

Information Commissioner finds a business

to be in breach of the Regulations an

Information Notice requesting further

information, or an Enforcement Notice will

be issued. A fine may be imposed for

breach of an Enforcement Notice. Criminal

sanctions may also be imposed.

All of these actions can damage the

reputation of your business and adversely

affect the goodwill of your customers. So, if

you use electronic communications as a

marketing tool, you should ensure that each

communication is clearly identifiable as

relating to the advertising or marketing of a

product.

More Articles...

Distance Selling Regulations

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