In the third entry of our ‘How to Grow Your Business’ blog series, Viviana Mucharraz, Commercial and Intellectual Property Partner at Carbon, highlights the importance of website compliance for E-commerce businesses.
THE E-COMMERCE REVOLUTION.
Thanks to the rise of the likes of eBay and Amazon, who in the 1990s revolutionized the e-commerce industry, we consumers can acquire endless amounts of products and services online from any business with e-commerce capabilities.
JUMPING ON THE ONLINE BANDWAGON.
E-commerce markets, particularly in the online retail sector, are growing at impressive rates, putting brick-and-mortar retailers in distress. According to Statista, the United Kingdom has one of the largest e-commerce markets in the world placing the value of UK e-commerce sales at around 500 billion GBP[1] with roughly 80 percent of UK internet users doing online shopping (the highest online shopping penetration rate in Europe). It’s no wonder then that most businesses today have opted for creating websites to enable online access to their products and services thus increasing their market share and profits.
However, with great power comes with great responsibility.
BE RESPONSIBLE.
Businesses have a responsibility to their consumers that goes beyond delivering quality products and services. This responsibility starts with transparency and accountability, and it goes all the way up to avoiding unfair and illegal commercial practices.
In order to meet these responsibilities, any business with a website needs to comply with various rules and regulations. The nature of these rules and regulations vary depending upon whether the website is business-to-business (B2B) or business-to-consumer (B2C), and whether the website offers the sale or supply of goods and/or services or simply just the provision of information or other content.
The recent implementation of the GDPR[2] and big website data breach scandals by multinational corporations, such as Facebook, have made the average consumer much more savvy about their legal rights, thus increasing their expectations for e-commerce businesses and online retailers to be fully compliant with the law.
Some of the issues that businesses face when selling online include:
- inadvertent contract formation
- complying with e-commerce legislation
- data protection and e-privacy law
- online advertising and marketing law.
There is a general concern among governments to increase trust in and the security of digital services. The reform of the data protection framework, and in particular the adoption of the GDPR was a key action to this end. The GDPR represents a step forward towards greater accountability and enforcement, but, contrary to what some people may think, it is not the first regulation of its type and definitely not the only one. Focussing on the B2C market, the main regulations with which UK website owners need to comply, beyond GDPR, are:
- Consumer Rights Act 2015;
- Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013;
- Electronic Commerce (EC Directive) Regulations 2002;
- Privacy and Electronic Communications (EC Directive) Regulations 2003.
EARNING TRUST.
Compliance with these regulations by website owners is more than just a trend, it is an obligation.
Just as paying taxes is considered both a civic duty and a requirement of the law, website compliance is as much a legal requirement for any website owner as it is a duty of any business towards their clients and consumers. For any serious business, the possibility or not of facing fines should not be an outweighing factor against generating trust amongst online consumers. At the end of the day this trust will translate in returning loyal customers.
These regulations may seem as complex and compliance is not always considered easy. The best place to start is by carrying out a review of your website to evaluate and expose any risks or liabilities which may damage your brand value and reputation.
Website owners must pay particular attention to the navigational design (or site map) of their website since the manner in which a user navigates through a website may have significant legal issues (for example, the site map will need to take into account the position of legal notices and disclaimers and, where the interaction with the website is intended to lead to the formation of a binding contract, the steps by which an online contract is created).
BE COMPLIANT.
If you are looking to engage a third party to design and build your new website, there are a number of different services offering comprehensive website design and development products. These can include the bespoke drafting of terms and conditions, privacy policy, Cookies policy and pop-up banners, as well as accurate marketing claims or disclaimers on the website to ensure compliance with applicable legislation and advertising codes of conduct.
If you already have a website but are unsure of whether your website is compliant with the relevant regulations, contact our compliance experts at Carbon Law Partners who will carry out a review of your website and the legal information in place to identify any risks and advise on how can they be managed in the context of your business’ specific commercial needs.
[1] Regulation (EU) 2016/679, the General Data Protection Regulation.
[2] Between 2013 and 2016 (https://www.statista.com/statistics/282162/e-commerce-annual-sales-in-the-united-kingdom-uk/)