How the e-commerce directive affects your business
Published: 20 Oct 2002 21:11 BST
Online businesses could be on the receiving end of a "Stop Now" Order requiring them to bring their sites into line if they fail to provide all the information required by the new rules. The Office of Fair Trading (OFT) is understood to have launched another crackdown on sites which fail to comply with distance selling legislation, so businesses ignore the new measures at their peril.
The e-Commerce Regulations
The Electronic Commerce (EC) Regulations 2002 came into force on 21st August. They implement the EU's e-Commerce Directive which aims to boost e-commerce by removing internal market barriers and promoting consumer confidence. The Regulations apply to all businesses which advertise and sell online, whether to consumers or to other businesses. Among other things, the Regulations introduce new information requirements for websites and other e-commerce platforms. In the consumer arena, they supplement the requirements of the Consumer Protection (Distance Selling) Regulations 2000.
Existing sanctions
The existing sanction for breach of the Regulations is the risk of an action for damages for breach of statutory duty. An individual would need to show he has suffered loss as a result of the breach by the business of the Regulations. In addition, the Regulations give customers a potentially unlimited "cooling-off" period in respect of contracts formed online, but only where the supplier has breached the requirement to provide "appropriate and effective means to correct input errors".
Stop Now Orders
The curiously-named Stop Now Order is a relatively new (and, to date, little-used) sanction introduced in June 2001 to protect consumers from rogue traders. The Office of Fair Trading and other "qualified entities" are able to apply to the courts for a Stop Now Order against businesses breaching legislation on misleading advertising, doorstep selling, consumer credit, unfair contract terms, distance selling and a range of other consumer protection measures. Failure to comply with a Stop Now Order is a contempt of court, punishable by an unlimited fine or imprisonment.
Stop Now Orders in relation to the e-Commerce Regulations
From 23rd October, Stop Now Orders will be available for breaches of the following provisions of the Regulations: the general information requirements applicable to "Information Society Services", information requirements for commercial communications such as e-mails and SMS, requirements relating to online unsolicited commercial communications, information requirements where contracts are concluded online and further requirements relating to the placing of online orders, such as the requirement to provide the customer with a means to identify and correct input errors.
In relation to the Distance Selling Regulations, the OFT has in the past shown that it means business by conducting internet "sweeps" of non-compliant sites. It is understood to have launched another such crackdown recently. Online businesses would therefore be well advised to ensure their sites are compliant with the new e-Commerce Regulations and, where applicable, the Distance Selling Regulations.
For more information please contact a member of the e-Commerce Team
Click here to use Olswang's interactive E-Commerce Regulations checklist
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