Legal Regulation of e-Commerce

by Kidd Rapinet on February 29, 2008

Other articles on our website review the implications for businesses selling over the internet of the Data Protection Act 1998, the Telecommunications (Data Protection and Privacy) Regulations 1999 and the Consumer Protection (Distance Selling) Regulations 2000. This article looks at the Electronic Commerce (EC Directive) Regulations 2002, which apply to the provision of “information society services”. This definition covers businesses which:

  • sell goods or services to businesses or consumers on the internet or by email;
  • advertise on the internet or by email (whether or not the goods or services are delivered electronically); or
  • convey or store electronic content for their customers or provide access to communication networks.

Non-commercial activities are not covered, nor are offline elements of transactions that begin online. The Regulations do not specifically refer to the web, as they are intended to be of more general application to keep up with technological advances.

The Regulations require the following information to be given by persons providing information society services.

1. General Information

  • The name of the service provider
  • The geographic address at which the service provider is established;
  • The details of the service provider, including his email address, which make it possible to contact him rapidly and communicate with him in a direct and effective manner (this might also include a telephone number);
  • Details of any trade or similar public register in which the service provider is entered, and his registration number or equivalent (i.e. companies will need to state that they are registered at Companies House in England and Wales, and their registration number);
  • Where the provision of the service is subject to an authorisation scheme, the particulars of the relevant supervisory authority (e.g. the Financial Services Authority);
  • Members of regulated professions must give various professional details (for an example, see the “About Us” section of our own website);
  • The service provider’s VAT identification number, where applicable;
  • Where prices are referred to, they must be indicated clearly and unambiguously, and indicate whether they are inclusive of tax and delivery costs.

This information must be made available “in a form and manner which is easily, directly or permanently accessible”. This can be done by making the information easily available on a website, whether or not the service is provided over the web.

2. Information about contracts

Where a contract is to be concluded by electronic means the service provider must, prior to an order being placed, provide to the customer in a clear, comprehensible and unambiguous manner the following information. (This does not apply to businesses who just use web sites for advertising their offline services, or who make initial contact via a web site but conclude contracts offline.)

  • the different technical steps to follow to conclude the contract;
  • whether or not the concluded contract will be filed by the service provider and whether it will be accessible (this is a legal requirement in other Member States, but won’t apply to UK service providers – though it appears they must say the contract will not be filed);
  • the technical means for identifying and correcting input errors prior to the placing of the order;
  • the languages offered for the conclusion of the contract;
  • which relevant codes of conduct the service provider subscribes to, with information on how those codes can be consulted electronically (i.e. a link);
  • where terms and conditions apply, they must be made available to the customer in a way that allows him to store and reproduce them (although an html page can always be saved, an option to download the terms and conditions in Word or PDF format would be sensible here).

As the information must be provided prior to an order being placed, a confirmatory email acknowledging the order is too late. The obvious place to provide such information and ensure it comes to the customer’s intention is on a web page during the order placing procedure.

3. Placing of the order

Where the recipient of the service places his order through technological means (but not if the contract is just concluded by exchange of emails), a service provider must:

  • acknowledge receipt of the order without undue delay and by electronic means;
  • make available to the recipient appropriate, effective and accessible technical means allowing him to identify and correct input errors prior to the placing of the order (if such means are not made available, the customer can cancel the contract and the service provider would have to apply to the Court to enforce it).

Business to business customers can contract out of 2 and 3 above, but not 1.

4. Commercial communications

This requirement covers emails, whether or not unsolicited (commonly known as “spam”), and also such types of communication as text messages. These must:

  • be clearly identifiable as a commercial communication;
  • clearly identify the person on whose behalf they are made;
  • clearly identify as such any promotional offer (including any discount, premium or gift) and ensure that any conditions which must be met to qualify for it are easily accessible, and presented clearly and unambiguously;
  • clearly identify as such any promotional competition or game and insure that any conditions for participation are easily accessible and presented clearly and unambiguously;
  • if unsolicited, be clearly and unambiguously identifiable as such as soon as they are received. (It is difficult to see how this requirement can be met without including the word “unsolicited” in the subject header of the email. See also our separate article on unsolicited communications.)

5. Sanctions

Recipients of information society services have the right to claim damages for breach of statutory duty against any service provider who fails to comply with the above information requirements. This would require the recipient to prove he had suffered loss as a result of the failure to provide the information. Perhaps more importantly, the Director of General of Fair Trading and certain other consumer protection bodies have power to apply to the Courts for a Stop Now Order where failure to comply with the Regulations “harms the collective interests of the consumer”. An aggrieved consumer may therefore prefer to complain to them, rather than bring an action for damages himself.

Consumer confidence is crucial for Business to Consumer (B2C) e-commerce businesses, and compliance with the Regulations by the provision of what is, after all, relevant information can only help to increase such confidence.