Your e-commerce questions answered.
E-commerce and online shopping were a growing trend of the last decade, increasing at 16% CAGR for 2014-2019. It’s clear that the pandemic further boosted that trend, and online shopping leapfrogged another 28% reaching globally $4.2 trillion in 2020. More businesses are moving online establishing e-commerce platforms trying to adapt to changing environments. A poor understanding of the legal issues with digital platforms and going online can be one of the most significant risks for businesses. Let’s get to learn the key considerations when planning to set up an online platform.
Terms & Conditions: Any online platform should specifically pay attention to its terms of use, or as it is usually referred to, to its Terms & Conditions, as it is the main legal document regulating any legal relationship arising between it and the user. According to Articles 451 and 453 of the Civil Code of RA, Terms & Conditions for online platforms are considered to be a public offer, and anyone accepting it in a form set in that terms binds the offer. When stipulating terms of use you should consider referring to some mandatory aspects, such as:
When and how the contract is concluded. the moment and form of acceptance of the terms,
Intellectual property: terms should include the bases allowing the platform to present the seller’s trademark and firm name, as well as regulate how the content of the website is protected/used. Often, online platforms acquire a license to use the seller’s or service provider’s intellectual property.
Payment method: how the payment is made, what payment methods are allowed to be used, and what are the refund and fee policies.
Change in terms: the way terms can be changed and the way the user will be notified about those changes, including the conditions for those changes to take effect.
Note, that in case of any dispute arises, the Terms & Conditions is the main document governing the relationship between the platform and the user.
Privacy policy: The platform should also set forth a privacy policy that can either be included in general terms or set out separately. The privacy policy regulates the processing of user’s personal data. Note, that the privacy policy should comply with RA law on Personal data protection and General Data Protection Regulation (GDPR), as otherwise the company can be subjected to a fine.
E-commerce platform: The discussed platform can also be an e-commerce platform. E-commerce is the process of buying and selling goods over the internet. These business transactions mainly occur at B2B (business to business) or B2C (business to customer) levels. In the case of e-commerce platforms, specific regulations apply. Article 416.1 of the Civil Code of RA specifies the responsibility of e-commerce platform owners. Particularly, the e-commerce platform owner is not responsible for the content of electronic documents transferred by third parties by its platform. However, exceptions apply to the mentioned regulation. For instance, the platform owner becomes responsible for that content when it, without any authorization or acting beyond that authorization, modified the content of the e-document, selected the receiver of the electronic document, or transferred the document in the name of another person.