E-Commerce Essentials: Five Key Laws to Understand

eCommerce businesses are those that exchange goods or services online. You may also hear people refer to this as electronic commerce. If you are an online company making online sales, you must comply with various laws, some specifically for eCommerce brands and others that apply more widely to commercial entities. You must understand and abide by your legal obligations to ensure that you keep your internet business trading legally and successfully grow your company. This article will explain five essential laws affecting your eCommerce business.

1. The Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013 

A fundamental law your eCommerce brand should understand is the Consumer Contract (Information, Cancellation and Additional Charges) Regulations 2013. These explain the obligations your eCommerce business must meet when you sell your goods or services to consumers. Consumers are those purchasing from your company who, when doing so, do not represent a business. For example, it details:

• that your customers have a right to cancel their order;
• rules about additional charges; and 
• that you must be transparent about the products you sell and the services you offer. 

Your customers’ right to cancel their orders for goods from your eCommerce brand starts as soon as they place their order and continues until 14 days after receiving them. If you sell your customers a service, they can cancel this up to 14 days from the date they enter into the contract. However, if your online customer purchases digital content form from you and downloads this within the 14-day period, they have agreed to waive their return rights. 

2. The Data Protection Act 2018

The Data Protection Act 2018 affects many businesses, not just those in the eCommerce sector. Rather than detailed rules relating to what you sell, it refers to rules about the personal data of your customers or website users. This applies where you use personal data by:

• collecting; 
• processing; and 
• storing.

For example, the Act requires consent from individuals to process their data. 

3. The Electronic Commerce (EC Directive) Regulations 2002

The Electronic Commerce (EC Directive) Regulations 2002 apply specifically to eCommerce brands. As a company selling goods or services online, you must give consumers specific information about your company under these regulations. This includes, for example:

• your business name;
• your contact details;
• your company registration number;
• your VAT number; and
• details about charges, including any relevant taxes.

4. The Payment Services Regulations 2017

The Payment Services Regulations 2017 will apply where your eCommerce brand provides payment services. For example, if you accept credit card payments for goods from your online customers or allow customers to pay by direct debit for a regular service. They detail the rules you need to comply with when doing so, such as:

• ensuring payment services are secure;
• protecting your customers’ funds; and 
• the rules about how payment service providers are licensed.

5. The Consumer Protection from Unfair Trading Regulations 2008

The Consumer Protection from Unfair Trading Regulations 2008 apply to businesses, including online brands such as yours. They make practices that are unfair towards consumers illegal. This includes four types of practice:

• practices which are illegal in all circumstances; 
• misleading actions and omissions, such as misleading advertising;
• aggressive practices such as selling aggressively; and
• a general duty not to carry out unfair trading.

If you fail to comply with these regulations, it is a criminal offence. 

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Key Takeaways

As an eCommerce business, you need to comply with many laws when trading online. These include the:

• Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013;
• Data Protection Act 2018;
• Electronic Commerce (EC Directive) Regulations 2002;
• Payment Services Regulations 2017; and
• Consumer Protection from Unfair Trading Regulations 2008.

If you need help understanding how UK law affects eCommerce businesses, our experienced eCommerce lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. So call us today on 0808 196 8584 or visit our membership page.

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