The law and selling online
The different regulations you need to understand when selling products and services online to consumers.
Selling products and services online is a popular and convenient way for businesses to reach a global audience. It can have advantages, leading to increased profitability and lower costs.
However, with the growth of e-commerce, businesses must also navigate legal requirements to ensure they follow the law. These legal requirements include being compliant with consumer protection and data protection laws.
This guide tells you about the legislation you need to know. It also tells you how to make your online sales promotions compliant.
The different online selling regulations
The legal position and the relevant legislation to consider when selling online, including data protection, consumer protection and electronic commerce
If you are selling online, there is legislation you need to be familiar with. These are designed to ensure customers' personal data is kept secure, goods and services meet quality and suitability standards and online contracts are legally binding.
The 2018 regulates how you use and protect personal information about living people, eg in customer records. The Act affects the information that you have on computer as well as any paper-based records. To comply with the rules you need to comply with the entirety of the Act, particularly with the following six data protection principles. These require that:
- the processing of personal data must be lawful and fair
- the purpose for which personal data is collected must be specified, explicit and legitimate, and not be processed in a manner that is incompatible with the purpose for which it was collected
- personal data processed must be adequate, relevant and not excessive
- personal data processed must be accurate and, where necessary, kept up to date
- personal data processed must be kept for no longer than is necessary for the purpose for which it is being processed
- personal data must be processed in a manner that ensures appropriate security of the personal data, using appropriate technical or organisational measures
In order to comply with the Act and the GDPR, you must ensure that you provide customers with certain information. This could be contained in a 'privacy notice'. See privacy notices under the GDPR. This privacy notice information should be provided to your customers at the point in time when they provide you with their personal information. It makes sense to do this when they make an online order or account.
The Consumer Contracts Regulations require you to give your customers specified information before they place an order. You are also required to send the buyer an order confirmation and give them a 'cooling-off period' in which they can cancel their purchase if they wish.
The E-commerce Regulations ensure that online contracts are legally binding. They specify what information about your business and contract you must share with online customers and set out guidelines for advertising and promotions.
If your business is a limited company or limited liability partnership (LLP), under the terms of the Companies Act 2006, your website must show:
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the full name of the company or LLP
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the registered office address of the company or LLP
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the registered number of the company or LLP
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the place of registration of the company or LLP
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if the company is being wound up
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the VAT number (if VAT registered)
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membership details of any trade or professional association
How to ensure your online sales promotions are compliant
How you can make sure your online sales promotions are compliant and do not mislead consumers.
If you sell goods, services or digital content online to consumers in the UK, you must ensure that your online sales promotions do not mislead consumers or give a false sense of a deadline. Such sales promotions are known as price reduction claims and urgency claims.
What is a price reduction claim?
A price reduction claim uses comparison pricing to highlight a deal, such as "now 拢80, was 拢150." However, if the higher price doesn鈥檛 reflect the actual, usual price, it can mislead consumers about the savings.
Another common example is a claim like "50% off everything" displayed on your homepage. If there are hidden conditions (e.g., requiring a minimum spend) that aren鈥檛 clearly stated, this can also be deceptive.
What is an urgency claim?
An urgency claim implies that a consumer must act quickly to take advantage of an offer. Examples include:
- countdown timers - for instance, 鈥渙ffer ends in 2 hours 10 minutes,鈥 but the promotion continues after the timer expires
- low stock alerts - for example, 鈥渙nly 5 left in stock,鈥 when there is no actual stock shortage or when more items will soon be available
How to make your online sales promotions compliant
You should review your online practices to ensure they meet the requirements of consumer protection law and make changes if needed. As part of your review, you should:
- look at all online activities including advertising, website and apps
- ensure anyone working on the claims for your online activity understands the legal requirements
- keep records as evidence to verify the claims you make
- ensure price promotions are verified, special offer prices end when the promotion ends, and online advertising is correct
If you sell products or services on an online marketplace, ensure the information you get from third party sellers is correct.
Businesses that trade with individual consumers should also be aware of the Consumer Protection from Unfair Trading Regulations.
Review examples and read the Competition and Markets Authority .