Can you Find it – Business © 2017 THE FULL STORY…AVOIDING THE LEGAL PITFALLS OF WEBSITES AND E-COMMERCEPublished in Can you find it Business Edition on Wednesday, November 2nd 2015
Chris Strutt, a solicitor at Baines Wilson Business Lawyers, provides some practical guidance in relation to the legal issues and risks concerning websites and e-commerce. Baines Wilson is one of only a few firms in the country, outside of the largest commercial law firms, who specialise in this area of law as well as intellectual property work.
THE growth of e-commerce offers huge advantages to businesses in terms of the ability to extend their reach to new markets via a website. However, making effective use of the technologies available and complying with the legal compliance requirements is a challenge for all business as is operating successfully in the internet environment.
Non-compliance with the ever-increasing amount of legislation exposes your business to a number of risks, such as civil liability, fines (and in some extreme circumstances imprisonment), contracts being set aside as unenforceable, and legal action from organisations such as the Office of the Information Commissioner, Disability Rights Commission and Trading Standards which are increasingly being frustrated by the apathy and lack of knowledge shown by businesses in respect of the issues and are now taking a firmer line.
It is only a matter of time before we see more and more legal actions being brought against non-compliant businesses.
All risks are clearly outweighed by the benefits technology can offer to the modern business and in reality the risks can easily be minimised by addressing the legal issues head on and dealing with them in appropriate legal notices and policies.
There are a number of key areas where businesses need to ensure that they are legally compliant.
It is useful to have legal terms which set out the ways in which a visitor to a website is entitled to use the content of the website.
There are a number of issues that can be dealt with in a legal statement, all of which can enhance your legal position. This may be as simple as a copyright statement to put visitors on notice that the material on the website is subject to copyright and should not be copied, or a more complex statement, such as making clear the basis upon which you conduct e-commerce.
Businesses have been required for some time now to provide various items of information as a matter of law on their website, which include the name of the business, geographical address, an email address suitable for rapid communication, details of any trade, professional or regulatory body that the business is registered with, and the business’s VAT identification number.
Some of these, such as the business name, tend to be included as a matter of course, but businesses often omit all the required information, such as a VAT number and geographical address. These requirements are in addition to traditional laws relating to the information that businesses should have in off-line communications, such as a company’s registered office address, which continue to apply and should be included on a website in the same way that they should be included in a company’s letterhead.
Web sites that are used purely for marketing or information purposes and not “e-commerce” are still caught by regulations requiring the provision of information to visitors to the site.
One key area of legal concern for brochure websites is in respect of obligations relating to data.
Whether or not you intend using your website for genuine e-commerce, that is to actually take orders, there is a good chance that the website will collect information about visitors to the site.
This could be overtly in the form of electronic forms you ask visitors to complete, or less obvious methods such as information collected from cookies, which are small text files which websites can send to the hard drive of computers which allow the website to recognise if visitors return to the site.
Under data protection and privacy laws, businesses are under certain obligations in terms of getting specific permission for the collection of this information and in respect of cookies the law now specifically requires that you explain what the cookies are and how a visitor can refuse them.
There can also be privacy issues in terms of the information you publish on your website. For example, publishing information about employees of your organisation without their consent could be in breach of data protection laws.
If the website is trading, businesses need to ensure that they adequately protect themselves against contractual problems arising from the nature of internet transactions.
This includes the need to ensure that they do not find themselves committed to sell goods at a ridiculously low price as a result of a typographical error, or that they are not committed to sell goods that they do not have in stock or which are no longer available. You may recall a number of household names have had to deal with website pricing issues.
The law imposes certain requirements when accepting orders over the internet, which include a detailed explanation as to how the contract process will work and when the customer reaches the point where it is contractually committed to purchase and when the site owner is obligated to sell.
These requirements apply to websites aimed at businesses as well as consumers.
If you are dealing with consumers, a further set of regulations apply which include the provision of specific categories of information at point of order and which are later available to the consumer including the description, arrangements for payment, delivery or performance, the existence of a right of cancellation and the period for which the price remains valid.
The reality is that while the regulations impose burdens on business, they do exist to benefit customers. In which case, why not use the fact that you are complying with the regulations as something positive to promote to customers – instead of regarding the “small print” as something to be ashamed of and hide (which has its own problems in terms of proving that they are binding).
Businesses would be advised to turn their legal obligations into something positive, such as a customer care policy. With a little time and thought, businesses can use this to achieve compliance with the various regulations, obtaining legal protections for themselves and importantly appearing to potential customers as being trustworthy and concerned for their needs.
Baines Wilson can advise clients of the risks associated with the internet and the best means of dealing with these risks. We regularly carry out legal compliance audits of websites and prepare the necessary legal content for them. This can go hand in hand with an e-business legal strategy, setting out tactics and best practice for trading electronically and policies for the retention of information, direct marketing and employees’ use of internet technologies.