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Online Business & Distance Selling

E-commerce is now one of the most important parts of the internet, and covers all electronic transactions like email, internet and SMS.

Direct e-commerce consists of goods and services being delivered online such as advice or downloads, whereas indirect e-commerce is where services and goods are delivered off-line instead, such as CDs from Amazon.

A greater and greater number of businesses make their financial transactions online as it enables them to exchange services and goods instantaneously over distances and minimises admin costs and overheads. E-commerce brings convenience and financial savings to both the business and customer but raises challenges to the enforcement of contracts and the protection of the interests of the customer.

The EU has adopted a range of directives like the 1995 Data Protection Directive, the 1997 Distance Contracts Directive and the 2000 E-Commerce Directive to protect consumers and aid the development of e-commerce.

Primary e-commerce regulations

These three regulations are the most important in conducting e-commerce.

  • The Consumer Contracts Regulations 2013, which replaced the Distance Selling Regulations
  • Electronic Signatures Regulations 2002
  • The Electronic Commerce Regulations 2002 – often known as 'E-commerce Regulations'

Additionally, businesses must also comply with the law concerning traditional real world transactions like the Supply of Goods and Services Act 1982, and the Consumer Protection Act 1987 to name a few.

E-commerce advertising regulations

Marketing by email or text messaging must clearly identify:

  • on which company’s behalf is it being sent
  • that it is a commercial communication
  • whether or not it is a promotional offer or competition — the conditions need to be simple and clear.

Spam (unsolicited commercial emails)

The UK’s primary law for dealing with spam is the Privacy and Electronic Communications Regulations 2003, which are implemented from an EU Directive. It rules that businesses have to have prior permission before sending unsolicited commercial email to individuals. This effectively rules against spam to the email addresses of individuals, but not company email addresses.

The E-commerce Directive has given member nations choice in allowing or forbidding spam. This section of law is also separate from the country of origin principle. A UK business is allowed to spam, but cannot rely on UK law to justify spamming another country which doesn’t allow spamming.

The E-commerce Directive also states that businesses should regularly consult and respect opt-out registers before sending unsolicited commercial communications. The Labour Government at the time thought that industry self-regulation and existing codes of conduct already gave effective protection to those that received spam, and so decided to omit it when adopting the Directive.