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Advice to business
E-commerce – advice for business
More and more business are using the Internet for a number of purposes,
including selling goods and services. While the Internet is a new and exciting
medium, it is important for businesses to be aware of their rights and
responsibilities when advertising or transacting.
The following information is a guide which deals very broadly with some of
the information that businesses should be aware of when developing an online
presence. It is not a substitute for legal advice.
Information Source: http://www.accc.gov.au
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Advice to business
This information is a guide which deals very broadly with some of
the information that consumers should be aware of when trading online.
It is not a substitute for legal advice.
The Law
The Trade Practices Act ('the Act') prohibits conduct in Australia
which is misleading or deceptive or which is likely to mislead or
deceive. The Act also specifically prohibits other conduct, including
certain types of false representations, pyramid and referral selling,
offering prizes or free items without the intention of providing them
as advertised and asserting the right to payment for unsolicited goods
or services.
If you're entering into online transactions with consumers or if
you're just putting information about your business or your products
up on the Internet, you need to make sure the material complies with
the Trade Practices Act. There are a number of general rules which
should apply to any business engaged in advertising and selling. The
Commission's publication Advertising and Selling can assist business
in relation to these principles This guide focuses on the things that
make the online medium different from other forms of publication and
assist businesses in coming to grips with these differences.
If you are hiring a consultant to design a web site for your
business, it is a good idea to ask them to take the following
information into account.
Trading with overseas consumers
If you are carrying out transactions with consumers in other
countries, be aware that your conduct may be subject to those
countries consumer protection laws. These laws may be different to
Australia's. It is strongly advised that you seek legal advice in
relation to any plans you might have for conducting business with
people overseas. If you only want to trade with Australian consumers,
it is a good idea to put a statement on your web site to this effect.
Structuring your web site
Internal hyperlinks - links that take consumers from one page to
another within your web site are the key to giving web sites
appropriate structures and organising information in a way which makes
it accessible and clear. Internal hyperlinks make it easy for
consumers to choose what they want to read from headings or menus and
skip the rest.
Potential problems
The down side of web pages with lots of hyperlinks is that
consumers may overlook information on the site which qualifies or
places conditions on information they have read on another part of the
site. If consumers don't read vital information because they haven't
accessed the right hyperlink they may have false impressions about
your offers or products.
For example, lets look at a hypothetical web site which offers
consumers a 'free web site design' on one of its web pages. This page
is accessed via a hyperlink from the home page stating 'free web
site'.
Directly below the offer is a link called 'get your free site now'.
If consumers follow this link they are taken to an online form where
they can submit their personal information including their credit card
details.
However, if consumers read other pages of the web site, they find
that the 'free web site' deal requires them to host the site with the
business for two years which costs $1000 per year and has to be paid
upfront.
This other information qualifies the offer made on the 'free web
site' page, however only consumers who read the whole web site will be
getting the 'full story' about the offer. Those who don't follow all
the links will not know the true terms and conditions of the offer.
A consumer could purchase these services without having ever
appreciated the true nature of the offer and the extent of the charges
which will apply to them. In spite of having provided full information
on the web site, the site is likely to mislead consumers.
Protect yourself:
Consumers don't necessarily read your entire web site. To minimise
the likelihood of misleading consumers through lack of information
disclosures, make sure that all of the information about any offer or
product is clearly visible on the same page without relying on
consumers accessing certain links. Qualifications or extra conditions
on other parts of the web site are unlikely to overcome the impression
of the original information.
Disclaimers
Many web sites use disclaimers in an attempt to limit their
liability or qualify other information on their web site. Disclaimers
are often placed on web sites via a link at the bottom of a page in
relatively small print.
Potential problems:
Disclaimers and the use of techniques such as *conditions apply are
inherently problematic. This is because the qualifying information is
not always sufficiently emphasised or obvious to overcome the likely
impression of the material promoting the offer. Disclaimers often do
not effectively negate prominent representations - the more the
disclaimer qualifies the original representation, the less likely that
the disclaimer will overcome the prominent representation.
On the Internet, disclaimers and qualifications become even more
dangerous because it is difficult to give enough emphasis to a
disclaimer to ensure consumers actually see and read it. If the
disclaimer has to be accessed through a link or is in small print at
the bottom of a page, you can't be sure that consumers will see it.
The problem is essentially the same as discussed in the section about
structuring your web site. If a disclaimer is not appropriately
emphasised or attempts to contradict prominent representations, the
qualifications contained within it are unlikely to have any affect.
Protect yourself:
Make disclaimers 'compulsory viewing'
It's best not to use disclaimers at all on the Internet, but if you
do decide they are necessary you should adopt techniques which enable
them to be certain that a consumer will access the relevant
information. This can be done by making the disclaimer a compulsory
page which the consumer must view at some stage while in the site, or
have the disclaimer appear in a dialogue box which opens on a users
screen when they access your home page.
If consumers are entering into transactions via your web site, it
is vital that any disclaimers are made compulsory viewing before the
transaction is finalised. Otherwise, consumers could conceivably enter
into transactions with you without ever having seen your disclaimer. A
disclaimer in these circumstances is unlikely to be effective.
External links
External links are the building blocks of the Internet. They enable
consumers to visit other sites from your own. Businesses often like to
include some external links so that the site is useful and informative
and this keeps consumers coming back.
Potential problems:
Problems can arise with using links if consumers are likely to be
confused about whether they have actually left your web site or about
the association between your business and the person whose site you
have referred people to. One example of problematic linking is deep
linking.
Deep linking is the term used to describe the practice of linking
to a page 'deep' within another person's web site with the effect of
bypassing that person's home page and its advertising. Legal action
has been threatened in relation to this conduct, although the matters
have been settled.
For example, in the Shetland Times case in the US, an Internet
based news service, Shetland News, reproduced headlines from a web
site operated by Shetland Times, with hyperlinks from these headlines
to the full stories located on the Shetland Times web site. In this
case, an Internet user could mistakenly believe that the news stories
were being provided by the Shetland News site when the service was
actually being provided by another party.
This matter was settled - the deep linking was allowed to continue
provided that the links acknowledged that the articles were 'Shetland
Times stories' and the Shetland Times logo was displayed on the site
It is important that the context in which you link to another
person's web site does not falsely imply an association with the owner
of that web site. Anything that creates an impression that the third
party has approved or endorsed your company or its products when this
is not the case is in danger of amounting to misleading and deceptive
conduct. For example, a web site marketing your company's product
'fizzy pop drink' and states that 'Sonny Gold, champion rower, drinks
fizzy pop drink'. The web site has a picture of Sonny Gold drinking
fizzy pop drink which is also a link to Sonny Gold's web site.
However, Sonny Gold has not formally endorsed the product or
publicly commented on it. Even though the statement that Sonny Gold
drinks fizzy pop drink may be factually correct, its appearance on the
web site along with the photograph and the link to Sonny's web site
could be interpreted by consumers as meaning that Sonny Gold has
formally endorsed the product which is not the case. The context of
the link implies a far greater relationship than actually exists and
is at risk of misleading consumers.
Protect yourself:
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Get permission before you link to another person's web site,
particularly if you are linking to a page 'deep' within the web
site.
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Put appropriate information near the link so that it is clear to
consumers that if they access the link, they will be leaving your
site.
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Get independent legal advice.
Framing
Framing is a web design technique which enables web browsers to
open web pages so that the content of the target page appears inside
the frame of the referring page. This can occur so that the URL
displayed remains that of the referring site.
Frames can be used to display different pages of site within a
frame. Often the frame contains basic site navigation information and
a menu.
Framing can also be used when linking to other people's web sites.
In these cases, when users access a link from your web site (the
referring site), your site's frame 'wraps' pages from the target site.
This can have the effect of hiding the target site's own advertising
or identifying features.
Potential problems
Framing in combination with external links (particularly deep
links) has the potential to be misleading. Consumers may think that
they have accessed a page which is part of your web site when they
have actually followed a link to a completely different party's web
page which is being displayed within your site's frame. This is
particularly likely if your site's URL continues to appear in the
address bar.
Framing in combination with external linking can also imply an
association between the referring web site and the site to which
people are taken which may not exist.
Protect yourself:
-
Don't use frames to wrap content that isn't your own unless you
have received permission from the target site to link to them in
that manner.
-
Put appropriate information near the link so that it is clear to
consumers that if they access the link, they will be leaving your
site.
Selling online
There are a number of factors to consider if you are entering into
transactions with consumers online. The Commonwealth Treasury has
released a draft of a Best Practice Model for business titled
'Building Consumer Sovereignty in electronic commerce'. Information
about this model can be found in the Consumer Affairs section of the
treasury web site, http://www.treasury.gov.au.
Businesses can also see how consumers will assess their web sites
against the ACCC's online shopping checklist (http://www.accc.gov.au/ecomm/access1b.htm).
This is designed to assist consumers when deciding whether to trade
with a business online. The criteria are drawn from a number of
existing standards including the draft OECD guidelines, the national
advisory council on consumer affairs principles and key issues for
consumer protection in electronic commerce.
E-mailing potential clients
Be sceptical of anyone offering to contact large numbers of
potential clients using e-mail on your behalf or of programs which
claim to be able to do this for you. This usually involves sending
unsolicited email or SPAM to large numbers of Internet users.
Most ISPs have policies of ceasing services to clients who use SPAM
because it slows down the Internet generally and wastes their
bandwidth resources. It's against 'nettiquette', the unspoken 'rules'
of the Internet, and most consumers don't like to receive it because
they have to pay for it to download it.
There is organised resistance to SPAM and it is generally believed
that legitimate businesses don't use SPAM to contact potential
clients.
Protect yourself:
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Don't send e-mail unless you have a pre-existing relationship
with the recipient.
-
Make it easy for recipients of your e-mails to 'opt out' of
continuing to receive your messages and always stop sending
messages once you have been asked.
-
Don't purchase e-mail addresses unless you are certain the
addresses were provided voluntarily and with knowledge that the
owners would receive e-mails from you. · Check your ISP's policy
on sending e-mail.
Hosting, web design and other services
There are a range of questions you should ask when deciding who
should design, maintain and/or host your web site. You may want one
company to do all of this for you, or you may wish to do some of it
yourself. Make sure you clearly outline what services you want from
the web services business and get something in writing outlining what
they agree to do for you. That way, you may have recourse to the
statutory warranties under the Trade Practices Act if the service you
receive isn't of a sufficient standard or doesn't fulfil the purposes
you outlined. These warranties provide that services must be carried
out with due skill and care and be reasonably fit to achieve the
purpose specified. This means they must be of a standard and quality
that could reasonably be expected from a competent person in the
particular trade or profession. Services must achieve the result the
customer wants, as made clear to the service provider.
Protect yourself
Before engaging people to provide you with web services, ask the
following questions:
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Are you locked in to using the company's services for a fixed
term?
-
What are the full fees that you will have to pay? How are these
fees broken up and are they likely to change over the course of
your contract?
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Can the company design/host sites which support online
transactions?
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Can the company provide you with full and accurate records of
online transactions to meet your tax and other obligations?
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Does the company have secure servers to support online
transactions?
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Will the company respond to your needs quickly (eg modifying
your web site or correcting problems such as servers going down?)
-
Does the company allow you to occupy sufficient space for your
web site on their server?
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Can the company provide you with useful statistics about where
traffic to your web site has come from?
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Does the company provide 24 hour technical support?
Free webpages or other Internet related
services
Offers of free web pages can have a range of meanings - check that
you're being told the whole deal. For example, the web design may be
free, but the company offering the service might expect that you host
your web pages with them once they have designed them. Remember, web
design doesn't put your pages up on the net - for that you need
hosting and domain name services. It is a good idea to find out if you
are obliged to purchase these or any other services from the company
and make sure you know the charges associated with these services
before you commit. Find out how much it will cost to add pages or make
modifications to the site. The company might look like its offering a
good deal in doing the initial design, but good web sites grow and
change regularly and you don't want any nasty surprises when you go
back and ask for modifications.
Check whether you will have your own domain name and not have your
pages added onto someone else's domain names. Most businesses like to
have a unique domain name which clearly identities their business. If
your pages are going to be using someone else's domain name consumers
might not remember your web address as easily and won't associate the
site with your unique identity. The same applies for other offers of
'free' services - check that you won't be obliged to make other
payments or to use the business for other services that you might
prefer to purchase elsewhere.
Protect yourself:
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Get full details of all fees and charges that may be associated
with the 'free' service or product. · Ask about policies
regarding changing the fees and charges in the future.
-
Ask about whether you will have your own domain name for your
web site.
Promote your web site to 200 search
engines
If someone is offering to register your web site with search
engines, ask which ones. There are only a few search engines which are
used by large number of web users and many of them won't accept
automated submissions. It only takes a few minutes to fill in the
online forms most search engines use to accept registrations - it's
quite simple and you may be better off doing it yourself.
Listings in Internet directories
If you get invoices for registration with Internet directories,
check that you requested to be registered. It contravenes the Trade
Practices Act to assert a right to payment for unsolicited goods,
including demanding payment for entering your business in a directory
without your authorisation.
If you do want to have your site listed, check the directory is
online and that it is credible and firmly established before paying
for anything.
Protect yourself:
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Before agreeing to have your name entered in an Internet
directory or paying for an entry:
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Check that the directory exists.
-
Check that the directory is one which is well known, well
indexed and likely to be used by potential customers.
-
Don't pay if you didn't request that your business be entered.
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