Guidance for E-Commerce Websites

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The E-Commerce Regulations - does your website comply?

This Article highlights in GENERAL TERMS ONLY, certain provisions of the Regulations.
For advice specific to your business, or further information please contact your Legal Adviser.

The Electronic Commerce (EC Directive) Regulations 2002 ("the Regulations") have now been laid before Parliament and the main body of the Regulations came into force on 21st. August 2002. Separate regulations apply to the financial services field and will come into force on the same date.

The Regulations have implications for most businesses which have websites. Sanctions for non-compliance can be severe, and include criminal penalties, "stop now" orders (on the application to the courts by consumer protection bodies) and the possibility that customers may be free to walk away from contracts at any time.

All businesses should therefore be addressing the potential impact of the Regulations.

So What will the Regulations mean?...... New information requirements

If you have a commercial website, (which is virtually every website which is not purely personal in nature and not just those which are directly transactional), you will now have to provide the following information:-

The name of your business.

Your geographical address (not necessarily your main or registered office but where you have your centre of activities for the particular service being provided.)

An e-mail address which will make it possible for users to contact you rapidly and communicate with you in "a direct and effective manner". For example, the e-mail address of your customer helpdesk.

If you are a member of a trade organisation, details of your membership and registration number (if any), or other identifier. If you are subject to an authorisation scheme, particulars of the relevant supervisory authority.

If you are part of a regulated profession, details of your professional body, your professional title and the Member State (of the European Community) where that title has been granted and a reference to the professional rules applicable to you in that Member State (and a means to access them, for example by a hyperlink). Your VAT registration number (if any).

The same information should also be given in a range of other on-line forms of communication, including e-mails where the essential purpose is advertising.

Even if you do not offer a facility to purchase goods or services on-line, if you give prices these must be clearly and unambiguously stated and must indicate whether they are inclusive of tax and delivery costs.

All of this information has to be available to users and enforcement authorities such as trading standards and other consumer bodies, in "a form and manner that is easily, directly and permanently accessible". Unfortunately the Regulations do not set down how this requirement should be met.

In the case of a website, this should be relatively straight-forward in that the information can be given within the website. However, the Regulations will also apply to other platforms, such as interactive tv or mobile phones where it simply may not be possible to provide the information in the same medium.
For example, the character limit on mobile text messages may make this impossible. The Guidance Note issued by the DTI envisages that the requirement can be met if the information is accessible by other means - for example inclusion on a website.

However, the DTI Guidance does not have force of law and the DTI is not one of the bodies responsible for enforcing the Regulations.

Information about ordering Goods or Services

If you have a site which gives users the opportunity to order products or services, additional information has to be given. If you are dealing with business customers you can avoid having to give this information if they agree otherwise (perhaps as part of site terms and conditions which they have to accept before they may transact).

The following information will have to be given to consumers (and business customers who have not agreed to waive this requirement) prior to the placing of an order by them:-
The technical steps required to conclude the contract, so that the user is aware of what the process will involve and the point at which a contract is formed.

Whether or not the concluded contract will be "filed" by you and whether it will be accessible. The DTI Guidance Note confirms that "filing" is a legal concept in other Member States that would apply in the UK only where contracts are made with service providers established in those Member States.

The technical means for identifying and correcting input errors prior to the placing of the order. If such means are not available, a purchaser is entitled to cancel the contract unless a court orders otherwise on the application of the service provider.

The languages offered for conclusion of the contract. Which Codes of Conduct relevant to the order you subscribe to and information on how those codes can be consulted electronically.

The information is to be provided in a clear, comprehensible and unambiguous manner. Once again, the Regulations do not prescribe how this requirement is to be met but it is likely that the requirement can be met if the information is accessible by means other than the one used to transact with the user. The requirement for the information to be provided in a clear and comprehensible manner may mean that the information cannot simply be hidden away in terms and conditions.

If there are terms and conditions which apply to the contract, these must be made available in a way that allows the recipient to store and reproduce them. A recipient can seek a court order to require compliance.

Once a customer has placed the order, you must acknowledge receipt of the order to the customer without undue delay and by electronic means. The DTI envisage that this could be done by e-mail or by a confirmation on screen at the end of the ordering process. Acknowledgment could also take the form of the provision of the service paid for in certain circumstances.

E-Marketing

The Regulations also contain provisions which apply to use of "unsolicited commercial communications" such as e-mail for marketing purposes. Once again, the Regulations do not prescribe how this requirement is to be met. All marketing and promotional e-mails, both solicited and unsolicited, must be clearly identifiable as such and also clearly identify the person on whose behalf they are made.

In the case of unsolicited messages, the requirement is that they are "clearly and unambiguously identifiable as such" as soon as received, for example by an appropriate description in the subject box (such as "unsolicited advertisement" or "unsolicited commercial communication"), so that users or their ISPs can delete them or use filtering software to block or delete them without the need to read them.

There are also additional requirements for e-mails which are promotional offers, competitions or games.

As mentioned above, the new information requirements also apply to marketing e-mails.

What else do the Regulations Cover?

The Regulations deal with a number of other important issues including liability of intermediary service providers and governing law for service providers.

In brief, the Regulations follow the "country of origin" principle in that on-line selling and advertising is subject to UK law if the service provider is established here, even if providing services in another Member State.
There are however exceptions and derogations, especially for contracts with consumers. They also limit the liability of intermediary service providers where they act as mere conduits, caches or hosts of information, in many cases subject to a requirement of no actual knowledge of illegal activity or information.

The requirements set out in the Regulations are of course in addition to the requirements set out in the Distance Selling Regulations, which contain some important additional requirements when dealing with consumers.

UK regulations implementing the directive can be found @ www.hmso.gov.uk/si/si2000/200002334.htm