Minimising risk on the Internet

Is the Internet unregulated?

No, the Internet is one of the most highly regulated environments today. Specific legislation targeted at online business is in the pipeline both at a national and international level, but existing legislation and the principles of common law continue to apply.

Here are some examples:

Misrepresentation:
Any person offering goods or services from a web site will be liable for untrue statements which are made to induce customers into entering into contracts;

Advertisements:
You may attract the unwanted attention of Trading Standards Officers if you incorrectly describe products or services (see Trade Descriptions Act 1968). In addition, if you are involved in a regulated business, your web site may infringe specific rules. For example, Virgin Atlantic was fined by the US Department of Transport, when it advertised misleading prices on its web site for flights between New Jersey and London;

Codes of Practice:

Various voluntary codes of practice that regulate advertising in the UK (e.g.: the British Codes of Advertising and Sales Promotion Practice) will apply equally to marketing from web sites. These codes of practice also mention various sources of legal regulation (such as the Trade Marks Act 1994, Control of Misleading Advertisements Regs 1988, Defamation Act 1952, Lotteries and Amusement Act 1976, Obscene Publications Act 1959 and over 150 others) much of which will apply to your online presence;

Forthcoming laws:
The UK government has recently published a consultation draft of an Electronic Communications Bill, which amongst other things will ensure that electronic signatures are given the same legal effect as handwritten ones. In addition there is already proposed legislation for the EU relating to distance selling, new types of copyright, new rules on applicable jurisdiction and new rules on contract formation. See http://europa.eu.int/comm/ dg15/en/media/index.htm

I want to offer goods from my website – will I be bound if there is no paper contract?
The standard rules of contract formation will apply to dealings on the Internet and paper and handwritten signatures are not formal requirements for contracts. So, if you make an offer which could reasonably be interpreted as being contractual in intention, that offer could be binding if “accepted” by a visitor to your web site according to the normal common law rules. It is therefore very important for a web site trader to understand the difference in law between a contractual offer and what is called an “invitation to treat” (which cannot bind the trader) – and there is plenty of old English case law to assist here. See the FAQ Section on Advertising and the Law of Contract.

It is important that you set the expectations of your visitors by setting out the rules on which you will sell them products or supply them with information. Terms and Conditions of use for your web site can help here. In these, if properly incorporated into the site and “accepted” as described above, you can limit your liability.

I want to exclude all liability under my contracts – can I?

The short answer is no. Under English law (and with a few exceptions), a business offering goods or services on its standard terms can only limit or exclude liability to the extent that this is reasonable in all the circumstances. The same principle applies where the business is dealing with a consumer (i.e.: non-business customer).

Furthermore, it is unlawful to purport to exclude liability for death or personal injury caused by negligence. So for example, a business which advertises the sale of computer software from its web site might not be able to rely on a standard term which excludes all liability for the performance of the software. Terms which unlawfully limit liability can be deleted by the court – potentially leaving you with a contract with unlimited liability.

Can I ignore the laws of other countries if my website is generated by a server kept in the UK?

No. The example relating to Virgin (see question 1) is one of many where authorities in other jurisdictions have taken an interest in material on UK servers. Any offer over the Internet of services or goods which can be taken up by residents of other countries may be subject to foreign rules and regulations. As a rule of thumb, where consumers are involved local laws will protect them and override any terms you may have agreed with the consumer online.

In addition, the use of names and web site content can unwittingly infringe the intellectual property rights of third parties. Since it will obviously be too expensive for most companies to seek local advice in every jurisdiction of the world before launching a commercial web site, the practical advice is to:

think about the jurisdictions which are of particular commercial interest to your business;
think carefully about any jurisdictions which are known to carry certain risks for advertising purposes (for example, some Muslim countries) or have particularly strict advertising rules (e.g. Germany);
tailor the web site accordingly, making it clear that the offers contained in it are for residents of specified countries only;
as with other forms of business activity in a particular jurisdiction, think about conducting trade mark clearance searches for any brand or trading names which will be used in the web site.
I am creating a website and wish to reuse material I have found elsewhere on the Internet.  Surely it is public domain and I can use that?
No. Very little information is public domain. The majority of useful information and designs on the Internet will attract copyright protection, whether there is a notice to that effect or not. Reusing that information is likely to be an infringement of someone’s copyright for which you can be sued. The situation becomes more complex when multimedia is involved. See below.

I am creating a website and want to post multimedia clips, is there anything I should know?
Multimedia, as the name suggests, will contain numerous different intellectual property rights, which may belong to different people. You will need the consent of all of them to reuse that material on the web. In addition, you may be required to make contributions to collecting societies. For example, if you wish to put music on the web you should first look at the web sites for the MCPS (http://www.mcps.co.uk) and PPL (http://www.ppl.co.uk).

I want to take details from the users of my site, what does the law say about this?
Information relating to living individuals is called Personal Data and throughout Europe and elsewhere is subject to regulation. In the UK we are still subject to the Data Protection Act 1984 until the Data Protection Act 1998 comes into force, probably 1 March 2000. You may need to notify your company before taking any personal information and you will need to comply with a number of principles. See http://www.hmso.gov.uk/acts/acts1984/84035–h.htm#sch1 for more information. Note, the law may also restrict your ability to export Personal Data out of the EEA.

Someone has the domain name I want to use, but they don’t seem to be using it themselves.
In the UK we have had an important case on this subject, [ref One in a Million]. It is now clear that you may not be able to use or trade domain names which one would expect to be clearly the property of another. The rules are complex and are in addition to the dispute resolution guidelines belonging to Nominet, Network Solutions and WIPO.

Can I link to whatever material I wish on the web?
Not necessarily. The law is still not clear in this area even after a Scottish case (Shetland Times ref) on this point. As a matter of courtesy, you should look at the web site which you want to link to and check to see if they place any restrictions on the use of their material and the way it is linked to in their terms and conditions. Making it clear that off site material belongs to someone else is also good practice. Linking to undesirable material or material which is an infringement of copyright may give rise to criminal or civil liability as demonstrated by a recent case in a Swedish court where the web site linked to unauthorised MP3 music files.