E-commerce is a business model that has exploded in popularity over the last decade or so. In fact, recent statistics show that 77% of British internet users made a purchase online in 2015, and the online share of retail trade stood at 15.4% for the same year.
E-commerce is certainly here to stay as these numbers are predicted to steadily increase. Despite the attraction of e-commerce for many entrepreneurs, it also has a specific set of legal regulations to which business owners must be adhere. Entrepreneurs running a UK e-commerce business need to be aware of both UK and EU (at least until full Brexit occurs) legal regulations before they launch.
In this blog post, we’re covering the legal regulations that UK e-commerce businesses must adhere to.
The Electronic Commerce (EC Directive) Regulations 2002
There are certain legal rules about e-commerce business and these are dictated by the Electronic Commerce Regulations 2002. The most pertinent things to be aware of from this directive are the following:
- You must have a website terms and conditions.
- You must always clearly display the price of your goods, any included taxes, and delivery information at all times. Any unclear or deceptive information can be punished by law.
- Your website must display your company name, VAT number, the address your company is registered to, company registration number and direct company contact information.
- If you’re running a marketing promotion then you need to state that it’s a promotional offer.
- You must clearly define emails to your customers that are of a commercial nature.
- If you send unsolicited emails then you must state that it’s unsolicited.
Data Protection Act 1998
As part of the Data Protection Act, you also need to make sure that the information you collect on customers does not leave the EU. This means you are not permitted to sell or license your customers’ information to third parties that operate outside of the EU.
You also need to register your company with the ICO (Information Commissioner’s Office). By registering your company with the ICO, you’re saying you agree with the Data Protection Act and will adhere to it. If you don’t register with the ICO then you’ll face heavy fines and the potential closure of your business.
Distance Selling Act 2000
This Distance Selling Act pertains specifically to how goods and other consumables will be sold online. Most companies license the software of third parties like Paypal or Stripe to process customer payments because this way, the payment gateway service is the one that needs to ensure it’s compliant with legal regulations.
However, some companies accept payments directly. If that is you then you need to make sure that your payment processing system complies with the Payment Card Industry Data Security Standard (PCI-DSS).
Here are a few other important regulations within this act that UK e-commerce businesses must adhere to:
- Correct prices must be displayed at all times
- VAT needs to be indicated
- All goods purchased are subject to a 14 day returns period
- Every purchase order needs to be acknowledged (this is usually done via a confirmation order email)
- Your terms and conditions also need to reference your returns policy and acknowledge that customers have 14 days to return a purchased product
ICO Cookie Law
Cookies are used to collect information from users that visit your website. Generally, they are used as part of a standard analytics and marketing system like Google Analytics to track information about certain web pages. However, e-commerce stores also need a way to store a user’s choice of items in his or her online cart or shopping basket, and for this cookies are required.
Final Words: Legal Regulations UK E-commerce Businesses Should Be Aware Of
E-commerce is a great business model but before you dive headfirst into launching your business you need to be compliant with legal regulations for online trading.
We can help you remain legally compliant and protected with our E-commerce Web Pack. You get three bespoke legal documents that will ensure your e-commerce business complies with all the legal regulations mentioned in this blog post.
Click the image below to get your legal documents created and we’ll get started as soon as possible.