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The DTI's e-commerce regulations have been significantly watered down under pressure from UK e-tailers

The NEW Electronic Commerce (EC Directive) Regulations 2002 came into force on 21st August and affect every commercial web site.

The DTI has also issued a revised Guide for Business which clarifies and expands upon the provisions of the Regulations. There is also a shorter, user-friendly guide targeted at online businesses.

The main compliance issues which businesses need to address are as follows:

New information requirements for all web sites:

A ll commercial sites (whether transactional or not) on the web, iTV or mobile platforms must provide certain minimum information about
  • the supplier
  • its products
  • services


  • If the requisite information is not provided to users "easily, directly and permanently", suppliers could face damages claims. In addition, a Trading Standards or consumer body could (from October) can apply to the courts for a "Stop Now" Order to force the site owner to amend its site, or face criminal penalties.

    Essential information for transactional sites:

    The basic details about the supplier, its products and services will need to be supplemented by a raft of new information related to
  • the ordering process
  • provide details of the technical steps a customer will need to go through to conclude a contract
  • the contract
  • whether or not a customer will be able to access the concluded contract
  • .

    The customer must also be given the means to identify and correct input errors prior to placing the order and the supplier must acknowledge receipt of the order "without undue delay".

    Where terms and conditions are made available, it must be in such a way as to enable the customers to store and reproduce them.

    The revised Guide offers some helpful pointers as to what this means.

    These obligations apply to B2B as well as B2C transactions, although in a B2B context it is possible to contract out of some of them.

    W ebsite ordering procedures need careful and urgent review.

    Extended cancellation rights may arise if retailers fail to give customers the means to identify and correct input errors and a customer would be entitled to cancel the order and obtain a refund. (A retailer could in theory choose go to court to resist this, if it could show that such a remedy was "inappropriate" in the circumstances).

    Breaches of the other contract - related requirements still carry the risk of "Stop Now" Orders and/or damages claims.

    Marketing e-mails and SMS:

    All "commercial communications", including all marketing and promotional e-mails (whether solicited or unsolicited) and SMS will need to be clearly identifiable as such and identify the person on whose behalf they are sent.

    The revised DTI Guide offers some welcome clarification on how this requirement is to be met, making it clear that this could be in the e-mail header or in the body of the message.

    Promotional offers, games and competitions

    Must meet additional information requirements.

    Further provisions to regulate unsolicited e-mails are due to come into force next year under the recently-adopted Communications Data Protection Directive.

    The EU Cookie Directive

    Which will outlaw spam, make opt-in compulsory for marketing e-mails and regulate the use of website cookies -- was formally adopted on 26th June. Member States have 15 months from official publication date to implement the measures in national law.

    Interactive television and mobile platforms:

    The requirements outlined above apply equally to iTV and mobile applications. The Regulations themselves do not address the difficult issue of how suppliers should provide the requisite information within the technical constraints of such platforms. The DTI's accompanying Guide suggests that compliance may be achieved by making the requisite information accessible on another service, for example a website. This guidance, however, does not have any legal force.

    Country of Origin:

    The Regulations aim to remove legal obstacles to cross-border trade within the EU by applying the "country of origin" principle. Broadly speaking, this means that it will be the laws of the state where the service provider is established (its country of origin, or home state) that apply in relation to cross-border online services.

    Financial services:

    The Treasury has now issued a raft of legislation implementing the E-Commerce Directive in the financial services sector, and the FSA has published its final finalised guidance on the issue.

    Enforcement:

    The approach to enforcing the new rules taken by Trading Standards, the OFT and other bodies remains to be seen, although some comfort may be drawn from the fact that the Guide is addressed to those enforcement bodies as well as to businesses.

    Service providers' liability for third party content: the new Regulations make a number of important clarifications to the provisions on service providers' liability for transmitting, caching and hosting illegal third party content.

    We have developed a checklist to help you assess your site's compliance with the Regulations.

    Please contact us to request it>>>

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