With in-store shopping often relegated to a secondary role, online forms of trading have come to the fore of late. Nowadays, merchants that don’t adopt web commerce solutions alongside or instead of their physical stores can find themselves at a distinct disadvantage in the market. It’s worth bearing in mind, however, that besides implementing various IT developments and having to organise home deliveries, running a webshop requires some major preparatory work in the legal area as well.
Administration, administration, administration…
It’s important to note that the launch of a home delivery service must be reported to the local municipality. It can be completed by filling in a form (the document is usually available for download on the municipaliity’s website). Online service providers selling daily consumer goods, as well as online caterers, are temporarily exempt from this reporting obligation: they are not required to register during the coronavirus crisis.
Besides reporting the service, a webshop is required to display a lot of information on its site. Some of this information is obvious (such as the merchant’s particulars and contact details), while other things are not obvious at all. For example, the particulars and the contact details of the company hosting the webshop must also be included, as must the rules on how shoppers can contact the complaints ombudsman.
With online orders, it’s natural for the merchant to record a lot of details about its customers (name, address, contact details, etc.). This is necessary just to be able to make the deliveries. Since this information is classed as personal data, a well-designed data protection regulation (“privacy policy”) is essential for an online store. When running the site, it’s good to be aware of the data protection rules more generally: you’re still not allowed, for example, to send advertisements to your customers after they’ve bought something on your site – not without their express consent.
GTC: more than just a formality
A commercial website is required to publish its general terms and conditions (GTC) in a way that makes it accessible to customers. However, preparing the GTC is not just a formality, it has major legal implications.
For example, it is important that the GTC covers the customer’s right to cancel a purchase. As most people know, with a few exceptions, an online shopper can change his or her mind and cancel a purchase at any time up to 14 days. However, if the merchant – whether in the GTC or elsewhere – does not inform the customer about the right of cancellation prominently and specifically (or does not make the statement of cancellation form required by law available to customers), the cancellation period is extended by 12 months.
Another subject of dispute in several cases has been whether the confirmation sent automatically by the merchant after an order is placed already constitutes acceptance of the order and the conclusion of a contract. This matter, too, is best addressed in the GTC. But it’s also a good idea to include in the terms and conditions what happens if the customer does not take receipt of the package or gives a wrong address for delivery, and whether the seller in such case is eligible to, rescind the contract and recover its costs from the customer in such cases.
There’s a lot at stake
It would be naive to think that due to the lack of a physical presence, the authorities are more lenient in enforcing compliance with the rules on online trading. In fact, due to the shift in favour of online shopping among customers, inspections in this area are likely to be increasingly frequent and strict.
Depending on the subject of the inspection, the operation of your webshop may be investigated by the local authorities, the consumer protection authority, the data protection agency or the competition authority, who may be entitled to impose severe fines, of up to several million forints, for infringements. It’s therefore important for you to have a thorough knowledge of the regulations, so that any additional profits you make through your innovations do not go on paying fines.
By Levente Bihari, Senior Attorney, Jalsovszky
