IT directors face challenge as e-commerce directive becomes law

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IT directors face challenge as e-commerce directive becomes law

Cliff Saran and Daniel Thomas
The European E-Commerce Directive, which comes into force today in the UK, could prove a nightmare for IT directors and will leave businesses facing extra costs and an increased administrative burden to ensure their Web sites are compliant.

James Mullock, solicitor at law firm Osborne Clark OWA, said, "The new regulation represents a potential minefield for IT directors and anyone involved in commercial contracts."

The legislation puts in place policies for identifying unsolicited e-mail such as spam and lists a number of steps e-commerce site owners need to take. These include ensuring the site contains key information such as a person to contact, a business address and information to help a user complete and amend an e-commerce transaction.

The Government's Department of Trade and Industry organised a consultation ahead of the new regulations, where it sought to gauge the additional costs of compliance.

One respondent estimated costs at £60, 000 to 90,000 in legal fees and £80, 000 to 120,000 in engineering and technical costs.

Despite the costs and potential difficulties, the directive could be good news for online retailers and service providers, according to Charlotte Walker-Osborn, IT expert at law firm Eversheds.

"The regulations give online service providers a greater certainty to operate in, particularly as they mean consumers will be less likely to take action," she said.

Ironically, consumers were given extra powers to take action against foreign online service providers by EU laws passed earlier this year.

The Brussels Regulations allow consumers to bring proceedings in their own country when companies are considered to have pursued commercial or professional activities in that country or, by any means, "directed" activities at that country. But the fact that they would probably now need to use foreign lawyers would dissuade most from taking any action, Walker-Osborn said.

The country-of-origin principle was one of a number of changes to the original draft regulations that the UK Government implemented after intense lobbying from industry bodies such as the Internet Service Providers' Association.

Other important changes include the regulations which set out that providers will not be liable for "pecuniary remedy or any criminal sanction", or damages, in the case of illegal material over which they have little control.

DTI guide to the e-commerce directive
www.dti.gov.uk/cii/docs/ecommerce/businessguidance.pdf

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