The online marketplace has exploded in the past decade with many small businesses taking the view that an online selling platform for their goods and services is preferable, to the often-higher cost of sale that comes with more traditional methods. Online trading has helped many small businesses find new markets, sell new products and compete with larger businesses.

However, online selling can give rise to issues not previously encountered, so it’s important to get the basics right and make sure that businesses have a good understanding of the legal requirements to trade online.

Your website is your shop window and all your advertising content should comply with UK advertising codes of practice, consumer protection laws, and any product or sector specific laws and regulations. It must also not infringe any third party intellectual property rights.

The Advertising Standards Authority (ASA) is the UK’s independent regulator across all media and enforces regulation in a robust manner. By way of example the ASA ruled that an informal tweet by a TV personality promoting a discount by a hairdressing salon amounted to advertising and should have carried an identifier such as #ad.

In addition to advertising issues there is also mandatory information that you must give to your web-based customers. Every website should prominently display links to a number of documents (ideally on the home page) that include the following:

  • Terms of website use – These should contain provisions for access to, and use of, your website. You may rely on these terms to prevent unauthorised access to your website, disclosure by users to third parties of access security information, unauthorised reproduction of material and unacceptable user behaviour, such as hacking, introducing viruses and uploading illegal or defamatory content.
  • A policy setting out rules and standards – Visitors to your website must comply with these. Again these rules may be relied on in preventing unauthorised reproduction of material contained on your website and undesirable user behaviour. The terms allow you to remove any offending material and to suspend, or permanently disable, a user's right to access the site.
  • A privacy policy – From a legal perspective, ‘personal data’ includes all information about identifiable individuals. If you collect personal data you will be classified under the Data Protection Act 1998 as a data controller and you must provide your users with fair processing information. This is information about the type of data you collect; how you collect it; and the purpose for which you hold and process it.
  • Terms and conditions of business – If your site sells goods or services, your web based sales are likely to be transacting electronically. You must therefore make sure you have an up to date and accurate set of terms of sale that protect your business and comply with the law. For example, if your site sells to the public, your terms of sale must comply with the rules on cancellation, return of goods and details of the information to be provided to customers at the point of sale.
With the above in mind, if you do or are considering selling your goods and/or services online, it is vital you have in place the appropriate documentation to protect your business and to avoid breaking the law.

By Kaye Whitby, partner and head of the commercial team, SAS Daniel