Mihai Stefan Viorel

421G, ETTI

Online Marketing Specific Reglementations

There has been a steady growth in the variety and volume of goods and services which are
available on-line to both businesses and consumers, and on-line selling is increasingly seen as a major
way for all businesses to save costs. Almost inevitably, as the practice of on-line selling proliferates so does
the amount of legislation governing it. This article provides an overview of the law governing on-line sales
in the UK and an analysis of the issues that a business should consider before setting up an on-line sales
process.

The law governing online sales

There are two distinct types of legislation that affect on-line retailers. Firstly, traditional
consumer protection regulations apply to all consumer sales made on-line. These regulations are well
established, but it is important to remember that they apply to on-line retailers as much as they do to
traditional ones. Secondly, there are regulations designed specifically to deal with problems and issues
facing retailers on-line.

Traditional consumer protection regulations

These protect purchasers and consumers whether they are buying the goods over the counter of a
shop or over the internet. For instance the Sale of Goods Act gives certain rights to purchasers about the
quality of the goods they receive, and their rights if the goods fail to live up to these standards. The
Consumer Credit Act protects consumers' rights when they enter into an agreement for someone to
provide them with loans or credit facilities including circumstances where they buy goods or services
using a credit card. The Unfair Terms in Consumer Contract Regulations protect consumers' rights where
they enter into agreements with retailers who try to impose unfair terms in the agreement. There are also
numerous other pieces of legislation, many of which will apply to different contract and product types.

Online regulations
These regulations are new, and were brought into force largely to protect consumers' rights when
they buy products either over the internet or by telephone. They largely derive from EU Directives, and
include the E-commerce Regulations , the Distance Selling Regulations and the Electronic Signatures
Regulations . These are the regulations that control the actual on-line sales process and they provide the
starting block from which we can consider the practical business requirements of on-line retailers.

Mihai Stefan Viorel

421G, ETTI
Although the traditional consumer regulations are important for all sales processes, this article
focuses on the on-line regulations and how they affect the various stages of the on-line sales process. The
next five sections take you through what the regulations require including information that must be
provided to a purchaser, the use of electronic signatures, contract formation issues and ensuring your
contract is legal.

Information that must be supplied

The various regulations share a central theme: companies should not hide themselves from
purchasers, and should provide as much information to purchasers as possible.

Company information that must be supplied under the E-Commerce

Regulations
The E-Commerce Regulations require that all commercial web sites make the following
information directly and permanently available to consumers via the website:

the company's name, postal address (and registered office address if this is different) and email
address;

the company's registration number;

any Trade or Professional Association memberships;

the company's VAT number.

All of this applies regardlessof whether the site sells on-line. In addition, any commercial
communication that is any email or even SMS text message used in providing an "Information Society
Service" must display this information.
The E-Commerce Regulations also require that all prices must be clear and unambiguous, and
web sites must state whether the prices are inclusive of taxes and delivery costs.

Contractual information that must be supplied under the ECommerce Regulations

When it comes to actually going through the contractual process the requirements for information
increase once again and the consumers must be told:

the steps involved in completing the contract on-line;

whether the contract will be stored by the retailer and/or permanently accessible;

Mihai Stefan Viorel

421G, ETTI

the technical means the site uses to allow consumers to spot and correct errors made while
inputting their details prior to the order being placed;

the languages offered to conclude the contract;

The website must also provide links to any relevant Codes of Conduct to which the retailer
subscribes and set out the retailer's Terms and Conditions, in a way which allows users to save and print
them.
All of this information must be provided before the purchaser selects the product and starts the
contractual process and it is possible to convey it early on in the sale, without deterring users with an
unwieldy sales process. The most common route is to bundle as many of these details into the terms and
conditions as possible, and ensure that consumers are appropriately directed to read them.

Information that must be supplied under the Distance Selling

Regulations
These Regulations set out the information which must be provided to a consumer prior to the
conclusion of the contract.
The information must be provided in a clear and comprehensible manner which is appropriate to
the means of distance communication used. This means that the information can be set out on a web
page, provided that the information is brought to the attention of the consumers before the contract is
entered into. The information to be provided includes all of the information which a supplier should, in
any event, wish to provide in relation to:

the identity of the supplier;

the main characteristics of the goods or services;

their price;

arrangements for payment and delivery; and

the existence of the right of cancellation created under the Distance Selling Regulations.

Information that should be set out in the terms and conditions

The terms and conditions should:

make it clear who is selling the product, together with the geographical and email address;

Mihai Stefan Viorel

421G, ETTI

describe clearly what the customer is getting and what it will cost, including all taxes and delivery
costs; and
identify the arrangements for delivery of the product.

The "country of origin" principle

The E-commerce Regulations apply a "country of origin" principle. In its simplest form, this
means that as long as a UK business complies with UK laws, it can "ignore" the laws of other Member
States. In general terms this is a definite bonus for on-line retailers. However, recognising that such an
approach would be bad news for consumers, this basic rule is qualified.
The E-Commerce Regulations do not apply the country of origin principle to the terms of
consumer contracts. In practical terms, this means that a UK-based e-commerce site's terms and
conditions should meet the laws of every Member State in which consumers can buy its products, not just
UK laws.
As a result of the consumer contract exception, any site selling to French consumers must provide
its terms and conditions in French otherwise they may be considered invalid. If selling into Denmark,
consumers must be given a 14 working day cooling-off period during which the consumer can change his
or her mind about the purchase and return the goods for a refund. In the UK, the cooling-off period is
only seven working days. These are only examples, of course there are many other differences.
Despite this significant qualification, there are still advantages in the Regulations' country of
origin principle that can benefit a UK-based business. For example, the UK's retail laws are among the
most relaxed in Europe. This can give UK businesses advantages over, say, German competitors. A
German e-tailer must comply with any German restrictions on promotional offers; its UK rival escapes
such restrictions, even when selling to German consumers.

Ensuring your contract is legal

It is important for e-commerce retailers to ensure that the contract which is formed with the
consumer under the process described above is both legally correct and also affords the retailer the
maximum protection. There are various ways in which the contracting process can be structured to be
legally correct, and it is important to balance absolute best practice, and a more commercial approach

Mihai Stefan Viorel

421G, ETTI
which is still legally correct. Equally, it is surprisingly easy to structure the process in a way which is
legally incorrect, and which exposes the company to more risk than is necessary.