How do I ensure that my business complies with the E-Commerce Regulations?

The Electronic Commerce (EC Directive) Regulations 2002

The Electronic Commerce (EC Directive) Regulations 2002 came into force in August 2002 and implement the European Union’s E-Commerce Directive into UK law.

The reason for the EU Directive was in order to achieve clarification and harmonisation of the rules concerning on-line business throughout the European Union and also to improve the situation for consumers throughout the European Union.

Due to the internal market brought about by the free movement of trade, goods and services it is imperative that consumers throughout the European Union are provided with the same kind of protection.

What businesses do the E-Commerce Regulations apply to?

The Regulations make reference to an “information society service” defining it as “any service normally provided for remuneration at a distance, by means of electronic equipment for the processing (including digital compression) and storage of data, at the individual request of a recipient of the service.”

The UK Government Department of Trade and Industry (DTI) has stated that it is not restricted to selling online or by other electronic means but this also includes offering for sale, i.e. advertising, online or by other electronic means. 

Consequently the following are covered by the Regulations:

  • Business that sell goods or services to businesses or consumers over the internet, or by email or by text messages
  • Businesses that advertise on the internet, by email or by text messages
  • Business that convey or store electronic content for customers or provide access to a communications network

Direct marketing by telephone or by fax is not covered by the E-Commerce Regulations.

If my website is based in the UK but sell to other Member States which legislation applies to me?

Country of Origin Principle

The basic country of origin principle is that if a website is based in the UK then the only legislation that it needs to follow is that of the UK meaning even if the website sells into other European Union Member States the law of those states will not need to be followed.

There are however certain qualifications to this principle.

Qualifications

Consumer Contracts

EU law states that when concerned with selling to consumers a website must comply with the consumer legislation in each and every European Union Member State which they sell their products into.

Further exceptions

The following are also exceptions to the country of origin principle:

  • Copyright laws
  • Electronic money (E-money)
  • Unsolicited email – commonly known as Spam

Are there any benefits for the country of origin principle?

In the UK for example the retail laws are much more lax to those in other European Union Member States in relation to such things as promotion. As the country of origin principle applies UK companies only have to follow the lax UK laws when selling into other EU Member States whereas companies in those other Member States have to follow their tighter laws even when selling into the UK.

What Requirements do the E-Commerce Regulations make on businesses?

Information Requirements

The Regulations state that the following information must be provided in relation to online selling:

  • The name of the service provider
  • The email address of the service provider
  • Details of any trade association which the business is part of
  • VAT Number
  • Prices on the website must be clear and unambiguous

UK companies trading online must also be aware of the Companies Act 2006 which states that the following information should also be made available on websites:

  • The registered office address
  • Company registration number
  • Place of registration

In relation to email and text message advertising and selling the following information should be provided:

  • That the communication is a commercial one
  • The name of the person on whose behalf the communication is being sent
  • If the communication is a promotional offer or promotional competition

In relation to text message communications there is a limit of 160 characters which often makes it difficult to include all the required information.

Unsolicited commercial communications which are also referred to as spam must be identifiable from the subject line of the email without the need to read the body of the email text.

Contracting Online

According to the E-Commerce Regulations if you form a contract online by electronic means your customer must be able to print and store a copy of your terms and conditions of sale.

Orders placed online

When consumers place orders through a website the E-Commerce Regulations specify that they should be provided with the following:

  • Technical steps to follow in order to conclude the contract
  • Whether or not the contract will be filled and how to access it
  • The technical means in order to indentify and correct input errors prior to placing the final order
  • The languages offered for the conclusion of the contract
  • If your website is subject to any specific codes of conduct you must provide a link to them
  • The terms and conditions of sale must be made available on the website