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Electronic Commerce Regulations

The E-Commerce Regulations, properly called the Electronic Commerce Regulations 2002, were incorporated into the law of the UK from the EU’s E-commerce Directive, and cover more than just e-commerce.

Aim and scope of the regulations

Their aim was to harmonise and clarify the rules of business online throughout Europe to boost consumer confidence when buying from there. Increased trust in e-commerce on the behalf of consumers would in turn boost its economic prospects.

Practically every commercial website in the EU is covered by the Regulations. As the Regulations cover what it terms as ‘information society devices’, it is believed that they apply to more than just e-commerce businesses. It defines this as any “service normally provided for remuneration at a distance, by means of electronic equipment for the processing (including digital compression) and storage of data, at the individual request of a recipient of the service."

By locating the servers in a different non EU country, a UK business cannot escape the Regulations. The Regulations are applied to where the business is based rather than where the equipment is located.

The Directive, from which the E-commerce Regulations derive, applies to all member countries of the European Economic Area. This includes Norway, Liechtenstein and Iceland as well as the countries of the EU.

Exclusions from the regulations

  • The regulations do not cover whether or not a business can sue or be sued, though it does include the law which applies if a dispute occurs in some situations.
  • The regulations do not apply to tax, lotteries or gambling.
  • The regulations do not apply to data protection or cartel laws.
  • The regulations only apply to Acts of Parliament passed before the E-commerce Regulations. For Acts of Parliament after the date that the E-commerce Regulations were passed, the Directive needs to be enforced on a case to case basis. For example, an Act like the Equality Act of 2010 possesses relevant provisions for the E-commerce Regulations. 

Where e-commerce regulations apply

The Regulations are applicable to a country of origin principle. If a UK business complies with UK laws, then it can disregard the laws of the other member countries. This would be positive for businesses as it allows them to sell to target customers throughout the EEA without having to abide by the laws of all these different states. It is recognised that this could discourage customers from purchasing across national borders, however, so this primary rule is qualified.

Consumer contracts

The country of origin principle not applying to the Regulations in consumer contracts means that an e-commerce site based in the UK has to abide by a set of terms and conditions that meets the laws of every member country. Because of this consumer contract exception, all websites selling to French consumers must give their terms and conditions in French to comply.

In spite of this major qualification, businesses situated in the UK can still benefit, as there are advantages in the Regulations’ country of origin principle. Examples of occur where certain foreign countries have tighter retail laws than those of the UK. A UK company would not have to comply with a foreign country’s certain restrictions, allowing businesses from the UK to sell to these customers without being hampered by these foreign restrictions.

Other exceptions to the country of origin principle include

  • e-money
  • unsolicited personal email
  • real estate transfers
  • copyright
  • other certain intellectual property rights

A participating nation can overrule the Country of Origin principle and use its own laws against a supplier in another Member State for the reasons of:

  • protection of consumers
  • public policy
  • protection of national health
  • public and national security

E-commerce regulation requirements

All service providers are required to give the following minimum information. This applies to both those participating in e-commerce and those that are not. This information must be permanently and easily accessible:

  • The service provider name must be easily accessible on the website. If this is different from the trading name, then both must be noted and explained.
  • The service provider’s address must be given.
  • The service provider’s email address must be given.
  • The prices on the site must be unambiguous and perfectly understandable. Tax and delivery costs must be shown whether they are inclusive.
  • Membership details must be given if the business is part of a trade or professional association.
  • The company’s registration number must be given
  • If the business has a VAT number then it must be given (even if the website is not being used for e-commerce)

It is important not to forget that other laws overlap with the E-commerce Regulations.

  • The Distance Selling Regulations have certain information requirements for businesses that sell to customers over the internet, as mentioned previously.
  • The Companies Act 2006 requires that the place of registration should be given, if the service provider is a company.

Text messaging

It must be noted that if a business uses text messaging to advertise its services and goods, then it is subject to the information requirements. As messages are limited to only one hundred and sixty characters it is understandable that the requirement to make information permanently and easily accessible is disregarded. Due to the restraints of technology, the Government instead “envisages …that these criteria should be capable of being met if the information is accessible by other means (e.g. inclusion on a website)."

Therefore it may be enough to give the URL of a website containing this required information at the end of the text message.

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