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: www.accc.gov.au
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 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.
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.
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.
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.
Don’t assume that consumers will access all hyperlinks.
Make sure each web page ‘stands alone’.
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.
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.
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.
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 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.
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.
Get permission before you link to another person’s web site, particularly if you are linking to a page ‘deep’ within the web site.
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.
Get independent legal advice.
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.
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.
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.
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.
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.
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.
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.
Before engaging people to provide you with web services, ask the following questions:
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?
Can the company design/host sites which support online transactions?
Can the company provide you with full and accurate records of online transactions to meet your tax and other obligations?
Does the company have secure servers to support online transactions?
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?
Can the company provide you with useful statistics about where traffic to your web site has come from?
Does the company provide 24 hour technical support?
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.
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.
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.
Clarify which search engines you will be registered with.
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.
Before agreeing to have your name entered in an Internet directory or paying for an entry:
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.