During the past period of social distancing and restrictions we have witnessed an unprecedented boost in the development of e-commerce. The inability of many retailers to continue direct sales of goods and services to their customers has led to the relocation of a number of businesses online. An interesting phenomenon is that in the online environment have moved even services, the added value of which is to provide an individual experience of the client (eg classes in creative activities, etc.).
In order to adequately organize its activities in a dynamic environment and to protect themselves from unwanted sanctions, every trader should ensure compliance with certain requirements set from a legal point of view. In this article we will summarize some of the most important of them, the observance of which we define as particularly important in order to legally exercise the commercial activity of companies in the online environment.
Obligation to provide information to customer-users
The relationship of the online trader with consumers (individuals who buy goods or services for their non-professional needs) has a significant and inevitably accompanying them in their entire development light motive. This is the requirement for the trader to provide the consumer with as much information as possible, which will enable him to make an adequate decision for product selection. In its turn, the latter is partly difficult due to the fact that in online trading consumers cannot see and directly compare several similar products (something they can do without a problem when physically buying goods). Therefore, the legislation introduces several additional requirements for the trader, the implementation of which aims to guarantee the consumer’s right to information in its various aspects and in its full scope.
These requirements are set out in several national and European regulations, given the qualities of the parties in the relationship in e-commerce leading among which is the Consumer Protection Act (“CPA”). According to the requirements of the latter, before the consumer is bound by a contract, the trader should have provided him with information on:
- your trade name, address of management, phone number, e-mail;
- the main characteristics of the goods or services (through a textual description of their main parameters such as size, material from which the goods are made, etc., as well as through a photo that objectively presents the product);
- the final price of the goods or services including all taxes and fees;
- payment terms, including accepted means of payment (information regarding the payment should be provided in a clear and obvious way close to the button through which the user places his order);
- terms of delivery (including whether there are any restrictions on the delivery itself, as well as the date of delivery);
- information on whether a right of withdrawal is provided and under what conditions it can be exercised;
- conditions of a legal guarantee for correspondence of the products, and if any-of an additional commercial guarantee, as well as additional information under what conditions, in what terms and where the granted rights are exercised.
In addition to the above, the Electronic Commerce Act (“ECA”) strengthens the requirements for providing unimpeded access to certain information, which further includes:
- designation of an authority which controls the activity of the trader;
- VAT registration information.
Last but not least, the legislation in the field of personal data protection requires the trader (who also has the capacity of Administrator within the meaning of the General Regulation on Data Protection) to provide certain information to users whose data are processed when accepting orders in online stores. Part of it overlaps with the one already described, and in addition the trader-administrator should inform the client – subject of personal data about:
- an appointed data protection officer (if any) and contact details;
- purposes of data processing and legal basis for processing operations (the most common case in online trading will be for the purposes of contract execution – the customer’s order);
- data recipients;
- data retention period;
- information about the rights of the clients in relation to the provided personal data;
- information on the right to appeal and to which authority the same can be exercised;
- information on whether the provision of data is mandatory or voluntary and what would be the consequences of not providing it.
It is important that the full required information is provided by the trader to the consumer and that this circumstance can be proven by the trader.
How to document the presentation of all the described information?
A very large part of the information described above is usually contained in several basic acts of the trader related to his commercial activity, including that carried out in an online environment. Here we will consider the most important of them, as well as some of their significant specifics:
- General terms and conditions: given the standardized form of the relations between the parties, it is an established practice for the contracts within the framework of online trade to be concluded under general conditions.
In addition to the information described above, the General Terms and Conditions most often contain information about the customer registration procedure (if required for placing an order), as well as the sequence of actions when placing an order. Something that is often missed is the inclusion of information and an active link to the Public Online Dispute Resolution Platform.
In case the trader wishes to collect additional declarations, consents, etc. from the clients, which are not among the obligatory requisites of the General Terms and Conditions, he should do so with a separate document. This is important because with the adoption of the General Data Protection Regulation, the previous practice of including in the General Terms and Conditions or in another general document a number of additional statements to be made by the user in a single action has been established as vicious (usually by pressing on the “I agree to the Terms and Conditions” button).
- Confidentiality rules: they perform the purpose of an act presenting preliminary information to data subjects within the meaning of the General Data Protection Regulation. Following the adoption of this Regulation, it has become established practice to place this document in a publicly accessible place (eg in the trader’s office, on his website, etc.).
This article outlined some of the most important aspects that every trader should keep in mind when starting an online business. In our next article we will provide you with additional information on how to organize the advertising of products so that without violating statutory prohibitions, the trader can distinguish his own products from those of his competitors and thus direct the consumer demand for them, as well as how discount campaigns should be organized.
Murgova and Partners Attorneys at Law has significant experience in advising online traders. If you need additional information and assistance, you can visit our website: https://murgova.com/