Technology &
Internet Law

Ecommerce Regulations 2002 - Briefing Note

The Electronic Commerce (EC Directive) Regulations 2002 ('the Regulations') brought into force the Ecommerce Directive on 21 August 2002. It applies to online sales and advertisements. 

The Directive

The Ecommerce Directive deals with the establishment of service providers, commercial communications, electronic contracts, the liability of intermediaries, codes of conduct.  It also addresses out-of-court dispute settlements and court actions. 

Coverage: B2B and B2C

Fundamentally the Regulations require that those who receive online services must be given clear information about the trader, the nature of the commercial communications and how to complete online transactions. This applies both to B2B and B2C transactions. The Distance Selling Regulations only apply to B2C transactions. 

The Ecommerce Regulations

The Ecommerce Regulations, however, only apply to online-service providers established in the UK but not those who provide such services from elsewhere in the EEA. 

Information Required

In order to create transparency, Regulation 6(1) provides that a person providing an online service must make available to the recipient the following information: 

• the name of the service provider;
• the service provider's postal address;
• his email address and other particulars;
• the details of any professional registration, e.g. the fact that a solicitor is regulated by the Law Society;
• where the provision of the service is subject to an authorisation scheme, the relevant supervisory authority details; and
• If the provider is VAT registered, the VAT number.

Regulation 6(2) provides that where an online service refers to prices, these must be indicated clearly and unambiguously and, in particular, must indicate whether they include tax and delivery costs. 

Advertisements

Email and SMS advertisements are addressed under Regulation 7 which provides that these must: 

• be clearly identifiable as commercial communication;
• clearly identify the person on whose behalf the advertisement is made;
• clearly identify as such any promotional offer (including any discount, premium or gift) and ensure that any qualifications are clear and easily accessible; and
• clearly identify as such any promotional competition or game and ensure that the rules are clear and easily accessible.

Conclusion of the Contract

Moreover, the Regulations provide that where a contract is concluded online, a service provider must, before that point, supply the following information: 

• the technical steps to follow to conclude the contract, so that recipients are made aware of what the process will involve and the point at which they will commit themselves;
• whether or not the concluded contract will be filed by the service provider and whether it will be accessible;
• the technical means for identifying and correcting input errors prior to the placing of the order; and
• the languages offered for the conclusion of the contract.

The Regulations, however, do not use a sledge hammer on unsolicited commercial mail but merely require that it be clearly marked as being unsolicited advertisements, so that users and ISPs can delete them without having to read them. SMS does not fall into this category, it being treated as 'unsolicited direct marketing' by the Information Commissioner under the Telecommunications (Data Protection and Privacy) Regulation 1999. Clearly the Government has taken the view that self-regulation and codes of conduct suffice for the moment. 

There are no special laws regarding online contracts. However, where situations arise for which current laws appear inadequate, the Government has proposed to amend the laws on a case-by-case basis. Where writing is required for the formation of a contract - example, property transactions - the hardcopy requirement would continue. 

Finally, the Regulations give the Director General of Fair Trading the power to apply to the courts for Stop Now Orders after 23 October 2002.

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NEED TO KNOW MORE?

For further information regulations applying to ecommerce and advertising, contact Maitland Kalton or Julian Danobeitia or call us on +44 (0)20 7278 1817

Kaltons Solicitors, Suite 302, Spitfire Studios, 63-71 Collier Street, London, N1 9BE. Telephone +44 (0)20 7278 1817; Fax: +44 (0)207 278 1835.

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