E-commerce essentials

The number of online businesses is growing at an ever-increasing pace. This has led to a multitude of legal, regulatory and transparency requirements.

I am often asked to review commercial contracts and notices for online businesses. Mostly, information will have been copied from another website. Many fail to appreciate that it is unlikely that the terms and conditions, privacy notice, or other information from another website will be suitable or appropriate for their own business.

Some of the key aspects online business owners should consider when starting up, reviewing, or updating their operations and their website are:

What constitutes a “commercial” or e-commerce website?

Any website which gives information about a company or a firm (including not-for-profit) could be considered as engaging in e-commerce. Therefore a number of issues should be considered by business owners when they are planning or periodically reviewing their existing operations and associated legal obligations:-

Intellectual property and websites

It is likely that your website will be or has been created by a web-designer, or perhaps a third party has been commissioned to design or modify your website. The first owner of any copyright subsisting in such work will be the author, i.e. the web-designer, not the commissioner. It is important to consider initially (ideally before the start of any website project) the following questions:

• who has the overall control of the website project, whether they have sufficient authority to enter into contracts with website designers, web-hosters and where appropriate, with financial institutions who will process credit card transactions?
• who owns the code and any materials in relation to the website?
• is there any written contract with the web-designer?
• has there been a written assignment of copyright from the web-designer to the business owner?
• have anyone’s IP rights been infringed?
• who has access to the “back-end” of the site (will the web-designer’s assistance be required every time a small change needs to be made to the site)?
• who provides back-up services/disaster recovery plan?

Key aspects to consider and address

• Contract formation - include:
  • a clear link to your business’ standard Terms and Conditions, which must be freely viewable and downloadable before acceptance; this should include an “I have reviewed and accept” box for the customer’s acceptance after reading
  • a separate link to your Privacy Policy or Privacy Notice informing the online customers how their personal data will be handled – www.ico.org.uk;  this should also include a separate “I have reviewed and accept box”, in particular where freely given informed consent is being relied upon by the business a separate link to your Cookie Policy
• Consumer contract regulations – consumer’s right to cancel, among other rights
• Data protection – IP rights, contractual rights, regulatory requirements:
  • Privacy Notices  – there is no such thing as a “standard” Privacy Notice (or policy); each business must consider its own course of dealings and the flow of personal data, including any international transfers (out of EEA)
• Electronic marketing rules –
• www.ico.org.uk 
• Advertising, including through social sites – www.asa.org.uk
• Credit card capabilities – you must consider terms and conditions (including any regular validation or audit requirements of the card company and/or merchant) – www.pcisecuritystandards.org
• Carrying on online business in another jurisdiction
• Use of web-links/hyperlinks – consent of the copyright holder may be required
• Cyber-security – continued risk assessments/appropriate insurance
• The Equality Act 2010 (in respect of making websites accessible to those with disabilities)

Further assistance

If you are a consumer and you are concerned about a particular website or an online business, the Financial Conduct Authority website provides some guidance – www.fca.org.uk

If you are a business owner and require assistance in connection with the matters referred to in this article, please get in touch here.