If e-commerce is interpreted simply as doing business online, a legal team will have to consider three issues: its website, the services it wishes to sell and the services its customers wish to sell using its network.
While website issues have been addressed in the past, legal departments now have two key concerns: ensuring content is cleared in the same way as other marketing material; and user terms and the extent to which a site owner can exclude liability for negligence.
When it comes to selling products and services online, there are a host of legal issues. But it is worth pointing out that most issues apply regardless of the medium used to sell. For instance, whether a company is selling products online or by traditional methods, that company still needs to get legal advice on local laws affecting its product or service and its target market.
Communicating online terms and conditions to ensure that they are incorporated into the contract must be the biggest battle any lawyer has with the business in the e-commerce arena. No one in the business is interested in forcing the potential customer to scroll through pages of terms and conditions – but how else can a company legitimately argue that the terms are incorporated? An ideal situation would be for a company to have one set of consumer terms for all of its products, so any product-specific terms need to be brought to the attention of the customer before a contract is made. However, this is no different to contract law in any other medium, so the legal advice remains the same. Similarly with data protection issues – it is a question of timing to ensure that the consent is given at the appropriate time.
Access to the internet via the TV raises a whole new set of questions. TV-internet provides a comprehensive range of interactive services as well as email and the world wide web. Such a service forms a ‘walled garden’. By this, I mean that a service provider will have signed content partner agreements with the content providers appearing within that walled garden. The content partners adapt their content, usually from their existing websites, so that it can be viewed from a TV rather than a PC. While many of our content partners are simply providing information to customers, others are selling products and services direct to our customers via the TV screen. The key e-commerce related issues that this has raised are:
l Who is a customer contracting with? A service provider does not sell groceries, books or CDs. Although content partners contract directly with our customers, a service provider has to ensure its customers are treated properly. For this reason, content partners should agree to a set of transaction service levels.
l Liability for content. Any service provider could well be involved in any action relating to the content on its interactive service. For this reason, the appropriate warranties and indemnities from content partners in relation to any content they put on to an interactive service are a must. This also covers the regulatory environment. If content partners wish to get access to customers via TV, they need to be aware of the regulatory as well as legal implications of adopting this medium.
The key factors in providing clear advice to the business in the area of e-commerce are a comprehensive knowledge of the product and an understanding of where the business is going with its e-commerce strategy. A member of a legal department should always sit on the project team – enabling them to raise issues at a very early stage and gain an in-depth understanding of the product. They should contribute to the project plan so that all the legal issues form part of the project rather than being treated as an afterthought. It is simply a question of adapting traditional solutions to the online world. In-house lawyers should find that as long as they can explain the issues clearly, the project team will come up with a number of solutions.
Diane Connolly is principal legal adviser at ntl Group. She can be contacted at www.ntl.com