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"Upon deciding to set up a web based business we knew the importance of finding advisers who were in tune with this rapidly changing and ambiguous business environment. Waterfront were unique in their provision of professional yet flexible advice and consistently delivered upon our continually changing requirements. The advice we have received has enabled us to structure the legal foundations of our company.
We look forward to continuing our professional engagement with Waterfront and welcome their advice and guidance in our attempts to build a market leading company"
David Hyland, Head of Finance & Operations, cmypitch.com
Selling on the Internet
Your website is a great marketing tool - it may even be a method of selling your products and services - but is it legal?
The Regulations
Your website needs to comply with various laws and regulations and, if you sell online or conduct marketing by electronic forms of communication, you will be required to comply with yet more regulations. The relevant pieces of legislation are:
- The Data Protection Act 1998
- Electronic Commerce (EC Directive) Regulations 2002
- Privacy and Electronic Communications (EC Directive) Regulations 2003.
Data Protection
Almost every business is affected by the Data Protection Act 1998 ("DPA"). If you have not done so already, you probably need to register with the Information Commissioner. If the DPA requires your business to register and you fail to do this, you could be held criminally liable.
Many of your obligations under the DPA that relate to your website would be covered by the inclusion of a well drafted Privacy Policy. This should give details of all the different uses that you may make of an individual's personal data and details of how the individual can exercise his or her rights.
There are special provisions under the DPA in respect of any transfer of a person's data to a third party (for example, you may need to transfer data in order to arrange to take payment from your customers), particularly if that third party is overseas. Harsh penalties can be imposed on any business that breaks these rules, so if you intend to transfer any personal data to a third party you would be well advised to seek specialist legal advice.
E-Commerce
If you sell goods or services online, you must comply with the Electronic Commerce (EC Directive) Regulations 2002. These include a requirement to display the process through which users will enter into a contract with you.
You must also display the following information somewhere on your website:
- the full name and address of your business
- contact details, including email address
- the name of any public trade register in which your business is entered and the registration number
- the name and details of any supervisory authority
- details of your VAT registration (if any)
- where references are made to prices, these should be clearly stated and shall indicate whether they include taxes and delivery.
Failure to comply with these rules can lead to a complaint against you being lodged with the Department of Trade and Industry.
Privacy and Electronic Communications
The DPA provides that all of us have the right to object to receiving marketing information. The Privacy and Electronic Communications (EC Directive) Regulations 2003 take this rule much further.
As a general rule, you should now obtain express consent from every person to whom you plan to send any kind of marketing by electronic methods. There are a few limited exceptions to this rule, but it would be unwise to rely on them without first obtaining legal advice.
Other matters to consider
It is very important not to forget that other legislation relating to the sale of goods, such as the Sale of Goods Act 1979 and the Consumer Protection (Distance Selling) Regulations 2000 will also apply to sales over the internet. These laws cover such matters as a purchaser's rights in relation to faulty goods and to claim a refund in certain circumstances. In particular, there are specific provisions relating to the information that must be provided to a consumer after a sale has taken place (for example, in a follow up email accepting the order).
If you make sales without getting your customers to sign a paper contract, you must also ensure that the electronic contract terms that you want to trade under are enforceable - there is little point in having them if not!
How we can help
We frequently draft Privacy Policies and Website Terms and Conditions for our clients. We can also assist with registering your business with the Information Commissioner.
Additionally, we can help you to ensure that you do not find yourself in breach of any legislation by performing a "Website Compliance Check". Ideally this should happen before your website goes live but, failing that, you should get it done as soon as possible thereafter. Ensuring that your website is compliant with the various laws and regulations should help to protect you from any complaint against you being lodged with the Information Commissioner and/or the Department of Trade and Industry.
Finally, we have experience of acting on behalf of clients who have been investigated by the Information Commissioner. We would hope, however, that you never need to make use of this area of our expertise!
© Waterfront Solicitors LLP 2006