Website Compliance in UK

Website Compliance in UK

Ecommerce, Contracts, Trading Terms and Conditions, General Terms and Conditions, Consumer Law

If you have an ecommerce business, you may need to consider some of the risks of selling online. When dealing with consumers, you will need to take into account the extensive raft of applicable consumer legislation and contract law that applies to ecommerce businesses. Legislation such as the Unfair Terms in Consumer Contracts Regulations 1999 (UK) (’UTCCRs’) render certain types of clauses that have been deemed to be unfair unenforceable. Any contract term is considered unfair if the following applies:¹

• Contrary to the requirement of good faith it causes a significant imbalance in the parties' rights and obligations under the contract, to the detriment of consumers.

Business are required by law to deal fairly and openly with consumers in good faith – contract terms can be drafted with the intention of protecting commercial needs but they must balance this by taking into account the interests and rights of consumers. Standard terms should be outlined in plain language and not in specialist dialect that puts the consumer at a disadvantage by doubt as to its meaning. No all terms, but most, are covered by the UTCCRs. These include those which are required by law to be included in contracts, contracts between business, contracts between private individuals, and a few other exceptions. Terms setting the price of the product or define the product or service is consider to be a core term and are thus also exempt from the unfairness provisions.

Even if a website is for informational purposes and does not operate as a point of sale website, it is important to have appropriate terms and conditions of use in place to address liability, content control, law and jurisdiction. These matters will be relevance if website users argue for reliance and damage arising from the information provided on the website. While these terms and conditions won’t necessarily be binding on users without their explicit acceptance of the terms, basic issues such as those mentioned above need to be addressed at the outset and the provision of information qualified by limitation of liability.

Ecommerce websites require online trading terms that go well beyond the basic terms and conditions for use of the site. A standard trading contract should not be used as it is for online trading purposes. Instead, terms and clauses need to be adapted and re-written for the online environment, such as the subtle differences at various stages of contract formation, liability, refunds and returns. A lawyer can help with drafting an appropriate online trading contract to take into account the differences involved in online transactions. Beyond the online trading contract, businesses need to stay aware of issues such as inadvertent contract formation. For example, the content elsewhere on  website may lead to the customer relying or assuming other conditions into the trading contract.

Legislation such as The Consumer Protection (Distance Selling) Regulations 2000 (UK) and The E-Commerce Regulations 2002 (UK) should be considered and observed. Under the former, businesses must provide clear information such as a description of the goods and services, delivery arrangements, payment, supplier’s details, and cancellations rights of the consumer before they buy. This information needs to be provided in written form and a seven working day cooling-off period must be made available. Specific industry requirements may apply in addition to these.

Copyright and Intellectual Property Protection

The most common copyright issue is that of deeplinking. Deeplinking allows content from a third party’s website to be displayed, which may result in copyright infringement. Explicit consent may be required before the link is added to the business website. Similarly, while copyright will apply to website content without a copyright statement on a website, businesses will usually include a copyright notice that leaves no doubt that the copyright resides in the owner or company and reproduction without permission is forbidden. Logos and other graphical icons may require protection with an express statement that acts to restrict unauthorised use and reproduction.

Cookies, Collection of Personal Data, Data Protection and Privacy

Web operators are forbidden from storing information or gain access to information stored in the terminal equipment of a user unless that user is given clear information about the reason for storage and an opportunity to refuse storage. With respect to cookies, UK law would indicate that it is acceptable to use cookies without explicit prior consent as long as the website’s cookie policy is made accessible to all site visitors. An explanation of cookie policy should include a succinct explanation of how cookies work, how the data is collected and how it will be used and stored. ThePrivacy and Electronic Communications Regulations 2003 (UK) impose further requirements on companies that engage in direct marketing via electronic means, such as email and through websites.

All websites will collect personal data in some form. Personal data is defined by The Data Protection Act 1998 (UK) (‘DPA’) to cover any data about a living and identifiable person, as opposed to anonymised or aggregated data. Web operators or owners are required by the DPA to keep personal data secure, up to date where relevant, keep this data for no longer than is necessarily and process the data fairly, ensuring privacy where possible. The DPA does not require owners to have a privacy policy, a privacy policy and statement will ensure that a website’s policy is communicated to users, who can then stay aware of how any personal information is being collected and if it is being used. If a company collects specific personal data – such as birth dates, shopping preferences, the DPA will act to also require appropriate technical and organisational measures are taken against unauthorised or unlawful processing of personal data, accidental loss or damage to personal data, and improve further conditions on the transfer of data to countries outside the European Economic Area.

Advertising, Key Information about Organisation and Products

Where a company advertises and promotes it products and services online, the British Code of Advertising, Sales Promotion and Direct Marketing (UK) applies. The Code applies to most advertising communications except for those made via broadcast such as TV commercials. It requires marketing communications to be truthful, honest, legal and decent and to be prepared with a sense of responsibility to consumers and society, as well as respecting the principles of fair competition generally accepted in business. Representations made in marketing materials need to be capable of objective substantiation. Marketing communications must be presented in a way to ensure that it is made clear to the reader that they are marketing materials. Electronic marketing needs to be clearly marked to be marketing materials without the reader having to open them.

The Trade Descriptions Act 1968 (UK) (‘TDA’) forbids manufacturers, retailers or service industry providers from misleading consumers as to the nature of their products. False descriptions are punishable by fines. These descriptions can relate to the nature of the product, quality, its function, or any aspect of its use and consumption.

Organisations need to comply with information requirements. A basic minimum amount of information about the selling organisation needs to be provided. For example, the name of the service provider, email address, geographic address, company registration number, VAT number where appropriate, pricing, and place of registration where the entity is a company. The Distance Selling Regulations, properly known as the Consumer Protection (Distance Selling) Regulations 2000 (UK), give consumers the right to certain information prior to the conclusion of the contract about the goods, a cancellation period, right to refund and timely contract performance.

Disability Access and Website Accessibility Standards

Under the Equality Act 2010 (UK), services providers are required to ensure that their services do not discriminate against a disabled person. It imposes a duty upon service providers (and any one providing goods and services) to ensure that disable person can also access their services by making reasonable adjustments. Encouraging accessibility of a company website can also boost public perception.

Defamation and Employee Access’s

The Defamation Act 1996 (UK) may hold website owners to be liable for any defamatory content of articles and other content stored on their websites. This may be a point to consider for those business and individuals who have websites or forums that express opinions. However, the Act allows a defence where the individual or entity concerned was not the author, editor or publisher; they took reasonable care in its publication; and they were not aware that what they did contributed to the publication of a defamatory statement.

Website owners also need to be aware that if they are allowing employees to publish statements on their website, they may be held vicariously liable for various offences. If an employee that discloses confidential information, makes defamatory remarks, sexual or general harassing remarks or racist comments, the website owner may be held accountable.

In summary, depending on  target user group,  product or service, and the industry in which you operate, further legislative requirements will apply. For example, financial services marketed over distance to customer will attract more onerous regulations. Websites that are geared towards minors may also be required to observe further legislative provisions where they collect a child’s details. Generally, websites need to comply with intellectual property laws, privacy and accessibility laws, and distance selling laws where appropriate.

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