10 legal issues retailers need to consider when switching to e-commerce

18 Jun 2020

Image: © panithi33/Stock.adobe.com

As Covid-19 drives online sales, the team at William Fry examines the legal issues that retailers need to consider.

With continued restrictions on physical interaction and proximity, and many non-essential businesses being forced to remain closed or to reduce opening hours temporarily, there has been a shift towards online commerce. Many retailers with no previous e-commerce presence are moving quickly to change their businesses’ trajectories and there has also been a significant increase in consumer bulk buying online.

This surge in online commercial activity has resulted in a need for businesses to evaluate and analyse the customer purchase process from a legal perspective. In particular, businesses may need to consider how goods and services are advertised and delivered to consumers.

Even as restrictions are eased, e-commerce is likely to continue to grow as consumers have become accustomed to online shopping and may be unlikely to risk physical exposure when these alternative purchase methods are available.

So, what are the top legal issues for organisations to consider when selling goods and services online?

1. Terms of sale

Robust terms and conditions of sale are vital for online retailers. These set out the legal basis on which the goods or services are supplied to the consumer and include important information such as delivery, pricing and payment terms.

More importantly, these terms enable retailers to protect themselves by limiting liability. Retailers should take care to avoid including any terms that would be considered unfair under the applicable laws regulating consumer contracts.

2. Consumer rights information

Consumer information rights legislation imposes obligations on retailers to provide information to consumers before the goods or services are purchased. Consumers must be informed of the identity and address of the retailer, the characteristics of the goods, the price or manner in which the price is calculated and any applicable delivery charges.

3. Cancellation rights

For distance contracts, which are contracts concluded online or via mail order, SMS, fax, phone or teleshopping, consumers should be informed of the 14-day cooling off period, which entitles them to cancel the contract within 14 days of the delivery of the goods.

4. Website/app terms of use

These terms, which are separate to terms of sale, apply to all website or app users rather than just to customers, and set out the terms and conditions on which the user may use the website or app. These terms enable businesses to limit their liability and to assert intellectual property ownership over website or app content.

5. Website cookies policy

Any website or app through which goods and services are purchased will invariably utilise cookies or similar technologies. The Data Protection Commission (DPC) has recently published a report and provided guidance on the use of cookies and tracking technologies.

6. Website privacy statement

Most websites and apps will collect some, even if only a very limited amount of, personal data from website users. Retailers should therefore take care to ensure that their websites and apps contain a privacy statement that meets the standards set down by the GDPR.

7. Electronic marketing consents

Many businesses will seek to target customers by sending electronic marketing communications relating to new offers. This type of marketing is very tightly regulated and is frequently prosecuted by the DPC. Each vendor-customer relationship will be different and specific legal advice should be sought for these marketing activities given that this is a complex area of law.

8. Geoblocking

The geoblocking regulation, which only recently entered into force, places an obligation on retailers to treat EU customers in the same manner when they are in the same situation, regardless of nationality, place of residence or place of establishment.

9. Advertising code

Where a business has subscribed to the Code of Standards for Advertising and Marketing Communication in Ireland, it should take care to ensure all online advertising complies with the standards set down by the code. Equally, a business should ensure that its advertisements are not false or misleading, as this could give rise to liability under consumer protection laws.

10. Online dispute resolution

The European Commission has created an online platform where customers are provided with a swift and low-cost mechanism through which to resolve disputes arising from online transactions. Retailers engaging in online sales are required to provide customers with a link to the platform on their website.

By Leo Moore and David Kirton, with contributions by Michelle Clancy and Anna Ní Uiginn

Leo Moore is a partner and David Kirton is a senior associate in the William Fry technology group. Michelle Clancy and Anna Ní Uiginn are both associates in William Fry’s technology department.

A version of this article originally appeared on the William Fry blog.