Digital entrepreneurship offers freedom and flexibility but is not without legal limits. The offering of goods and services in the digital marketplace is regulated by a number of laws in order to ensure consumer protection, and the Swedish Consumer Agency (Sw. Konsumentverket) is eager to secure and enforce such rights as it recently found certain online traders non-compliant with fundamental e-commerce rules. What are the most important provisions that digital businesses have to comply with in order to avoid fines and consumer badwill? In this blogpost, Synch guides you through 5 areas of e-commerce law that are vital for companies engaged in e-commerce.
- Information is the key
You have to provide your customers with certain information on your website. Among others, you have to indicate your company name and the corporate registration number together with the address and e-mail address of your business. You are required to provide your customers with description of the goods or services you offer together with clear information with respect to the prices, including delivery costs, other additional costs and taxes. Also – never forget to inform your customers about the methods of payment that you accept for the purchase!
- The right of withdrawal is a must
The right of withdrawal (Sw. ångerrätt) constitutes as the absolute centre of safeguarding consumers’ rights in relation to distance contracts. The 14-day cancellation right is not only existent in the offline world (ever bought something over the phone?), but – more importantly – it applies to online purchases. Again, information is the key throughout the purchase process, thus you are required to give clear and sufficient information to your customers about how to cancel the purchase, both prior to the placement of the order and within the confirmation. The information has to enable the customer to exercise his or her right of withdrawal, and shall include guidance for cancellation. If there is non-compliance with the information requirements regarding cancellation, the 14 days at the disposal of the customer to cancel will extend to a 1-year period (!).
- User-friendly order process
You should apply a “user-friendly” approach when setting up your order process, offering your customers an overview of the steps leading to a binding agreement. Beware that you are obliged to enable the customers to correct the order form before purchasing. A confirmation email is required to be sent immediately following the order, otherwise the customer is not bound by the contract, i.e. there is no deal. Make sure that the terms and conditions are always accessible for the consumers and always indicate clearly that pressing the purchase button will generate an obligation to pay. Save and store carefully all steps and confirmations made by the customer as you are obliged to prove the circumstances of the contract in a dispute. And keep track of the different versions of your T&C!
- Be smart with user-generated content
In order to lawfully use content generated by your users, you will have to include an assignment or license (according to the required scope, extent and purposes of your intended use) in your terms and conditions – keep in mind that they are (or at least should be) the right holders of the copyright in the content. Secure your position (if it shows that they did in fact not hold the necessary rights) by stipulating indemnification for infringements – that is compensation if you are being sued for copyright infringement. Finally – in order to avoid liability for uploaded content; implement a notice and takedown mechanism since you are responsible for supervising the posts and removing illegal content.
- Take data protection seriously – be integrity friendly
Today’s digital economy is built on personal data and the legal landscape is changing. The new GDPR, in force from 25 May 2018, will impose heavy burdens on companies secured by extremely high fines (check out our previous blogpost on the most important rules of the GDPR here).You must inform your customers in a very clear manner about the data collected and the intended purposes of processing. For purposes that are outside the scope of the agreement, you will probably need to collect a consent and that has to be given in an explicit manner (opt-in). On the bright side – handled correctly your data may be one of your greatest assets as you build your business!
For further information, please contact Anna Forsebäck.