Most companies or organisations in the UK have a website, however not all of these website owners adhere to the law and manage their legal risks effectively. Laws and regulations are being added all the time and the risk of non-compliance is growing with them. You need to be clear about your legal responsibilities, understand what your obligations are and be aware of the traps and pitfalls involved in running your website in order to avoid any costly penalties that may ensue.
Commercial websites provide a ‘shop window’ for businesses offering goods and services and are required to provide the same protection to consumer rights, as is expected in-store. This means giving greater transparency about the business, what you are selling, for how much, what the customer can expect and so on. Common pitfalls include failing to ensure customers’ personal data is protected, non-compliance with the standard basis of forming a contract, and breaching consumer protection regulations. The use of social media also brings specific compliance challenges. Retailers using Facebook, Twitter, YouTube, etc. will want to manage these risks carefully.
You may start your business by using brochure website only but as your business grows you may start to use e-Commerce. There has been a rapid rise in demand for guidance on a host of online issues with no single regulatory body governing the area, it can be difficult to stay on top of requirements. Many of the legal rules stem from the EU and include the sale of goods, e-commerce, data protection and advertising and marketing law.
Although it can be relatively simple to create and publish a website, it can be easy to overlook compliance once a website is up and running and the legal consequences of getting it wrong can be complex and potentially expensive. Different UK and EU laws impinge upon website design, domain name choice, website content, sales from websites, and indeed every other aspect of e-Commerce and online activity.
What are the risks?
There are two kinds of legal liability: civil liability and criminal liability (e.g. copyright infringement or breaches of data protection law). Other areas of criminal law which are relevant to websites include the laws of contempt of court, obscenity and racial hatred. Civil liability may lead to injunctions and damages payments; criminal liability could mean a fine and a criminal record, and possibly worse.
Unfortunately, websites can create both kinds of liability. Issues of civil liability are more prevalent, although not necessarily less serious. For example, you need to be careful about copying text, images and other material from third parties – if you don’t, you could find yourself on the wrong end of a copyright infringement claim. You should also check that your domain name and other branding do not infringe another person’s trade mark rights. Intellectual property is just one issue affecting websites.
Another big risk is libel
As well as hefty fines, for example where e-privacy rules are breached, one of the biggest threats is reputation damage. Where a business fails to comply, it can bring its commitment to consumer rights into question. Building and maintaining a loyal customer base is a challenge that all businesses share and such hard work can be quickly undone through a single compliance error.
There is also a substantial body of legislation designed to help and protect consumers and others involved in online activity – which places special obligations upon website owners. In to this category, we can place data protection law, e-Marketing law, website accessibility law and e-Commerce law concerning online contracts.
Conduct an annual review
Reviewing a website for compliance should be a key feature of any annual review. Wherever a major change occurs within the business, such as its products/services, ways of operating, types of transactions and back-office systems, a reassessment is needed.
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Author: Yvonne Morris
CloudLegal is a tech-enabled legal support consultancy which promises practical commercial and jargon-free advice. We support all company matters, commercial contracts/ Ts & Cs (including software and IT), employment & HR as well as data protection matters. We have various services including:
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