The The Electronic Commerce (EC Directive) Regulations 2002 apply to businesses that sell goods or services to businesses or consumers on the internet, or by email or Standard Messaging Service (SMS).
These include text messages; advertising on the internet, or by email or SMS convey or storing electronic content for customers, or providing access to a communications network
The regulations do not cover direct marketing by phone or fax.
The Electronic Commerce (EC Directive) Regulations 2002 implement Articles 3, 5, 6, 7(1), 10 to 14, 18(2) & 20 of Directive 2000/31/EC of the European Parliament & of the Council of 8 June 2000 on certain legal aspects of information society services, in particular electronic commerce, in the Internal Market (the 'Directive on Electronic Commerce'). One of the regulations' main aims is to ensure that electronic contracts are legally binding and enforceable throughout Europe.
The E-Commerce Directive broadly covered six key areas of e-commerce:
(1) The country of origin principle:
A cornerstone of legal certainty is that a service provider is able to understand the regulatory framework under which it is required to operate. The E-Commerce Directive sought to achieve this by stating that an e-commerce provider, when providing on-line services, shall be governed by the laws of the Member State in which it is established. As a consequence, no other Member State could impose additional regulatory requirements on that e-commerce provider regardless of whether e-commerce services were directed to users based in that other Member State. This has been one of the key ways in which the E-Commerce Directive aims to ensure uniformity, and is fundamentally different from the Data Protection Directive which ultimately makes e-commerce providers offering services across the Member States subject to multiple data protection laws.
(2) Establishment and information requirements:
In order to facilitate growth in e-commerce services, the E-Commerce Directive prohibits any form of prior authorisation by a Member State before an e-commerce service can be launched. It also sets out mandatory information that all e-commerce providers must supply when providing their services (e.g. the name and geographic address of the service provider). The purpose of this was to boost consumer confidence, ensure transparency and strengthen legal certainty.
(3) Commercial communications:
(4) On-line contracting:
A large part of the E-Commerce Directive deals with on-line contracting, including the information to be provided by the e-commerce provider and the requirements imposed upon the placing of an order. These provisions should also be read alongside the Distance Selling Directive (Directive 97/7/EC).
(5) Intermediary liability:
Perhaps the most important aspect of the E-Commerce Directive, and consequently the most controversial, is the regulatory regime dealing with intermediary liability. This regime has been of fundamental importance to the on-line community and is at the heart of the future of any investment in on-line services. The purpose of this regime is to ensure that intermediaries of on-line content are exempt from liability in circumstances where they are not responsible for the relevant content themselves.
The E-Commerce Directive distinguishes between acting as a “mere conduit”, “caching” and “hosting”. In respect of acting as a “mere conduit”, the provider of services that simply transmit content over a communications network will not be liable for the content to the extent that they do not initiate or receive the transmission or do not modify the content of the transmission. In respect of “caching”, the provider of services that facilitate the automatic, intermediate and temporary storage of content for the sole purpose of making more efficient the content's onward transmission shall not be liable for the nature of the content provided that certain conditions are met. Finally, in respect of “hosting”, the provider of hosting services (e.g. ISPs) shall not be liable for the content hosted on their services provided that certain conditions are met (e.g. no knowledge of unlawful content and expeditious action to remove the content on becoming aware). This is likely to be a key area of concern for ISPs and content owners, particularly in light of recent European case law dealing with intermediary liability and concerns around actions required to be taken against infringers.
(6) Administrative cooperation:
The final key aspect of the E-Commerce Directive is the requirement for Member States and the European Commission to co-operate with each other with regard to understanding the issues arising out of the implementation of the E-Commerce Directive in various Member States.
The E-commerce Regulations identify specific information about your business that you must provide to recipients of online services, and set down guidelines regarding advertising and promotions.
Suppliers of information society services, for example web site services must provide the following information to recipients to enhance transparency, trust and confidence.
- the name of the service provider;
- service provider’s established geographic address (not necessarily legal address);
- service provider details, including email address to which contact can be made quickly;
- where the service provider is registered in a trade or similar register available to the public, details of the register in which the service provider is entered;
- registration number, or equivalent means of identification
If you form a contract online by electronic means, your customer should be able to print and store a copy of the terms and conditions. you must also supply your customers with information about
- all technical steps required to conclude the contract, eg 'click this box'
- whether the concluded contract will be filed by you and whether it will be accessible
- the languages offered for the conclusion of the contract
- any relevant codes of conduct to which you subscribe, and information on how these can be consulted electronically
You must make sure that your website allows customers to go back and correct any mistakes made in their order before the order is placed.
Once a customer has placed an order electronically, you must acknowledge receipt without undue delay.
- Read our article Forming an online contract
If you intend to advertise on the internet, or by email or SMS, the regulations stipulate that "commercial communications" must be clearly recognisable as such. They must clearly identify the person on whose behalf the marketing communication is sent, together with any promotional offer.
The regulations also cover "unsolicited commercial communications", commonly referred to as spam. They require that these communications are identifiable from the subject line of the email, without the need to read the rest of the message. SMS messages are not covered for these purposes.
Liability of ISPs
The Regulations also deal with the liability of Internet Service Providers regarding content.
Relationship of Electronic Commerce (EC Directive) Regulations with other legislation
The Regulations should be read alongside:
These Regulations give effect to the European Parliament and Council Directive 2000/31/EC on certain legal aspects of information society services, in particular electronic commerce, in the Internal Market (Directive on electronic commerce), in respect of matters within the scope of regulation by the Financial Services Authority under the Financial Services and Markets Act 2000.
- The Financial Services & Markets Act 2000 (Financial Promotion) (Amendment) (Electronic Commerce Directive) Order 2002.
EU digital agenda
Action 9: Updating the eCommerce Directive
The EU's online markets remain deeply fragmented. E-Commerce is still insufficiently developed in the EU. Consumers and businesses have difficulties accessing online shops and offering their services in other EU countries. Many websites do not deliver goods or services across the EU.
EU action needed to abolish regulatory barriers to pan-European e-commerce
Today in the EU, 60% of cross-border internet shopping attempts fail because of technical or legal reasons like refusal of non-domestic credit cards. A huge untapped potential is waiting to be unlocked. Remaining regulatory barriers should be abolished.
Based on the results of a recent public consultation, the Commission adopted an e-Commerce Communication on 11 January 2012. The Communication contains 16 actions aimed at doubling of the volume of e-commerce in Europe by 2015.