Electronic Commerce (EC Directive) Regulations 2002, implements the EC’s e-commerce directive into UK law, which came into force on 21st August 2002.

Does this affect you?

Pretty much all commercial website are covered i.e.:

“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.”

This covers more than just buying and selling online, the Department of Trade and Industry (DTI) states that also included is: offering online information or commercial communications (for example adverts) or providing tools for search, access and retrieval of data, video on demand, web hosting or operating a communications network.

But they do not apply to gambling websites or lotteries etc.

A business cannot escape the regulations by moving its server to Australia for example, as the regulations look at where the business is based, not where the equipment is based.

Do I have to worry about the laws of other Member States?

Whilst the aim of the EC directive was to clarify and harmonise the rules of online business throughout Europe with the effect of boosting consumer confidence, there are still differences in how each individual Member State has implemented them.

But the regulations apply a so called “country of origin” principle, which basically means that as long as a UK business complies with UK laws it can effectively ignore the laws of other Member States. This would be good for businesses as it lets them target consumers in all Member States without having to abide by the rules of all these different countries. It has though been recognised that this would be harmful to consumers and as such the basic rule is qualified i.e. has exceptions.

The regulations do not apply the country of origin principle to the terms of consumer contracts, so a UK based e-commerce sites’ terms and conditions needs to meet the laws of every Member State in which consumers can buy its products.

Also copyright and other intellectual property rights are excluded from the country of origin principle as are electronic money (e-money) transfers, real estate transfers and unsolicited commercial email (spam).

On top of this, a Member State can overrule the country of origin principle and impose its own laws against a supplier in another Member State for reasons of:

  • Public policy
  • Public health
  • Public and national security and
  • Protection of consumers.

These measures must though be proportionate.

What information do I have to provide on my site?

Service providers whether e-commerce or not should provide the following minimum information, which must be easily, directly and permanently accessible:

  • Name of service provider, note this may be different from the trading name and these differences must be explained.
  • Email Address
  • Registered Office Address this must be the geographic address, a PO Box will not suffice.
  • Company Registration Number (if a company).
  • Place of Registration (if a company).

Also

  • If the business is a member of a trade or industry organisation then details of membership should be provided.
  • VAT number should be stated, even if the website is not being used for e-commerce transactions.
  • Prices must be clear and unambiguous, must also state if they include postage and VAT.
  • On top of this the distance selling regulations apply for business to consumer sales (see distance selling article).

What information needs to be provided before orders are placed online?

On top of the general information that must be provided on the website additional information must be given when selling online, whether to businesses or consumers:

  • How to complete the contract i.e. the technical steps to do so.
  • Whether or not the contact will be kept and made permanently accessible.
  • How input errors are identified and corrected prior to placing orders.
  • Languages offered for the conclusion of the contract.
  • Link to any relevant codes of conduct which you subscribe.Â
  • Your terms and conditions must be made available in a way that allows the consumer to “store and reproduce them” i.e. save and print them.

How must I acknowledge an order?

An order must be acknowledged as soon as possible, but it need not be accepted at this stage it is perfectly sufficient to just acknowledge the order i.e. “we have received your order and are processing it” as opposed to “your order has been accepted”.

Is there anything else to consider?

  • Distance Selling
  • Email Use
  • Internet Service Providers
  • Pricing Errors

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