Before you start selling online, it’s a good idea to have a read of the e-commerce laws and regulations covering the area where you’re based. In most places, there exist a large and comprehensive body of laws that apply to e-commerce operations, so, before you get going, you need to be aware of the legislative background you’re operating on.
If you’re already trading and are unsure of the legislation which affects you, you need to catch up quick. Legal problems can kill businesses (and can even land you in hot water), and operating blindly, with little or no understanding of the relevant legislation, is the best way to end up on the wrong side of the law.
This article will cover the basics of UK e-commerce legislation so that you can get up to speed. So no excuses. (Though, after you’re done, we strongly recommend that you read the original legislation yourself).
What is E-commerce and how is it Regulated?
In order to understand e-commerce regulations, you first need to understand what e-commerce is.
“e-commerce” refers to transactions made and concluded through electronic means.
eCcommerce is thought to be one of the most revolutionary aspects of the internet and an important aspect of modern life.
There are two types of e-commerce:
Direct e-Commerce relates to goods and services that can be received immediately through digital means, such as software downloads, online consultations, and file downloads.
Indirect e-Commerce relates to goods and services that are purchased online but are delivered offline, usually through a courier or postal service.
As both types of e-Commerce began to grow, regulations were introduced to control them. An eCommerce directive was adopted by the EU to help protect customers in their jurisdiction. In the UK, this directive was put into effect by the Ecommerce Regulations in 2002.
In short, the regulations apply to online sales and advertising services, as well as services carried out via email and SMS. The regulations ensure that electronic contracts are legally binding and that customers are provided with certain information regarding the business they’re dealing with as well as that business’s adopted codes of conduct.
Information Sharing Requirements
Companies that are covered by the UK’s e-commerce Regulations have to share a certain amount of information with their customers. Any business which sells goods or services through electronic means must comply with these stipulations.
So, of you sell via the internet, email, or SMS, these regulations affect you. And, in order to remain compliant, you need to:
- Provide a company name and physical address (providing a PO box is not deemed acceptable)
- Contact details – including and email address
- VAT number (if applicable)
- Details of any society memberships, professional bodies, or any other publicly available registers your organisation appears on.
- Company registration details (as outlined in the Companies Act 2006)
UK e-Commerce regulations also have very clear pricing requirements. These should be adopted by all relevant companies and service providers.
The regulations maintain that any prices stated on a website should clearly state whether or not they include hidden charges such as VAT and delivery. In short, prices should be clear and unambiguous.
The UK’s e-Commerce regulations cover the forming of electronic contracts extensively. The regulations state that:
- Electronic contracts should be able to be completed online
- That the consumer has the right and must have the ability to revise any mistakes contained in their order prior to making a purchase (or concluding the contract)
- Once the order is placed, confirmation of the order and all relevant information including terms and conditions, delivery times, and prices should be sent to the consumer without undue delay.
Online retailers are also obliged to provide consumers with all of the steps involved in the ordering process. Additionally sellers must supply consumers with information relating to their contract, including whether or not the retailer will file the electronic contract and whether is readily accessible by the consumer.
Online sellers must also inform consumers of any codes of conduct they adhere to as well as advice on how consumers can consult them.
Advertising and Email Requirements
UK eCommerce regulations also cover advertising and commercial communications.
This means that any business seeking to use the internet for advertising purposes must comply with specific terms outlined in the Regulations.
Perhaps most importantly, internet advertisers are required to be clearly identifiable as such when unrolling advertising campaigns. And, if an advertisement is sent via email, the email must include the name of the intended recipient.
Additionally, any unsolicited or “spam” email must clearly be identified being exactly that. And the contents of the email should be made clear in the subject line so that, should the consumer need not open the email to find out what it says.
It’s very important that you stay on the right side of the law. Though the information we’ve given above should set you on the right path, the UK’s e-Commerce regulations cover more than we have the space to go into here.
For this reason, it’s important that you read the legislation for yourself. And if you’re unsure about anything, you should contact either a qualified law professional or the UK government itself.
When setting up and running an e-Commerce operation, it can seem as though bureaucracy can start to eat away at your time. But remember, you only have to set up your organisation once. And the more you do well the first time round, the less hassle you’ll have later on. So do your research, put what you learn into practice, and sleep well in the knowledge that you’re compliant.
Are you concerned about e-commerce regulations? Have you encountered any specific problems concerning the law? Or do you have any advice to give your fellow e-commerce store owners regarding legislation? If so, let us know with a comment.