How to start an online business 2022 | Step-by-step guide

Summary

5. Comply with online business legal regulations

As an online business, there are several legal regulations you’ll need to comply with – that is, if you want to avoid being prosecuted…

5. Comply with online business legal regulations

As an online business, there are several legal regulations you’ll need to comply with – that is, if you want to avoid being prosecuted…

General Data Protection Regulation (GDPR)

Having come into effect in May 2018, GDPR gives consumers more control over their personal data, and says businesses must be entirely honest and consensual in their use of data.

Under GDPR, online businesses must ask for explicit consent before processing customers’ data. They must also be transparent about how they will use it, give customers the right to access the data a business holds about them, and comply with requests to have it removed.

And this is a regulation with real teeth – as the VinciWorks guide to GDPR in 2022 points out, the likes of Amazon, WhatsApp and Grindr have all received big GDPR fines in the last few years.

It also remains to be seen exactly how the UK leaving the European Union will affect data protection regulations. A government consultation on overhauling GDPR was concluded at the end of last year, and the UK is keen to develop a new regulation that balances privacy and business innovation.

Even if this does happen, you may have to still follow GDPR if you collect data from non-UK custoners.

Read more about the current regulations, and how they might benefit your business, in our GDPR guide.

Privacy and Electronic Communications (EC Directive) Regulations 2003

These regulations concern electronic marketing and also address the use of cookies (data files which enable website owners to track what users are doing), and prevent them from being used for illegitimate .

If your site uses cookies, you must:

Inform website visitors that you’re using cookies

Tell users how to turn your website’s cookies off

Ensure your privacy policy explains how cookies are being used

Odds are that you’ve visited a website since 2012 – in which case you’ll have encountered a pop-up informing you that cookies are in use.

You can install a ‘Cookie Law’ plugin to make sure this happens on your own website, and some web builders like Wix have this built into their platforms so all you need to do is click to enable the cookie banner that lets users accept or opt out.

The Electronic Commerce (EC Directive) Regulations 2002

This is an absolutely crucial regulation for any online business, and concerns the way in which online companies communicate with their customers.

Under this legislation, if you’re selling something online, you must:

Display your business’ name and address, contact details, email address, company registration number and VAT number on your website

Make it easy for users to read your terms and conditions

Always be clear about prices, taxes and delivery fees, and the terms and conditions of special offers

Confirm every order by email – you can set up an automated email response to ensure this happens

Make it clear that all marketing emails and/or unsolicited emails that you send are clearly identified as such

Make sure the sender of any communication sent by your company is identified

To learn more about exactly what is and isn't covered by these regulations, check out legislation.gov.uk's very handy guide to The Electronic Commerce (EC Directive) Regulations 2002.

Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013

These regulations came into force in June 2014 and replaced The Consumer Protection (Distance Selling) Regulations 2000.

They cover B2C (business to consumer, rather than business to business) dealings, and specifically address how the rights of your customers are protected .

The primary tenet of this legislation focuses on returns. It states that online businesses must give customers a 14-day period in which they’re able to cancel or return orders (of course, this excludes downloads and perishable goods). Returns must be met with a refund.

These regulations also demand that you give transparent information about the products or services you’re selling, your VAT, and your postage and packaging costs. Basically, your customers need to know exactly what they're paying for and how to get in touch if there are any problems.

Although it's written from a customer rather than business perspective, Which?'s Consumer Contracts Regulations guide is full of useful info on these crucial regulations.

How to start an online business 2022 | Step-by-step guide
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