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 Digital trading – is your app or website compliant with consumer law?
Intellectual property & technology

Digital trading – is your app or website compliant with consumer law?



The last three years have seen some significant developments in consumer law, as it applies to those developing and making available apps and consumer orientated websites. Within this article we summarise some of the main elements of recent legislation.

The Consumer Rights Act 2015

The Act addresses the sale of goods, and in this respect covers many types of consumer contract, including those which concern the sale of goods over the internet. It sets out that there will be terms implied into consumer contracts that goods supplied will be of satisfactory quality, taking into account their description, price, and anything else of relevance (including any public statements made in advertising, and custom in trade).

References to quality include includes fitness for purpose (including for any purposes made known by the consumer), appearance and finish, freedom from defects, safety and durability.

There are exclusions which cover matters brought to attention of the consumer, or which were obvious to the consumer.

It is important, therefore, that website operators consider carefully the content relating to goods set out upon their website or within their app. Notably, references to the description of the goods include any information made available pursuant to Schedule 2 of the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations (discussed below).

The Act also generally addresses services, which would include those services made available to consumers via apps and websites. Implied into contracts is a term that services will be supplied with reasonable skill and care. Again, incorporated into the contract is information given to the consumer concerning the services.

As such, again website or app content is particularly important, to clarify the content of what will be delivered.

The Act makes specific account for digital content. Processing facilities should be available for a reasonable time, unless qualified. Provisions are also included which can make providers and operators liable for device damage.

The Act goes on to address unfair terms in consumer contracts. A term is considered unfair if, contrary to the requirement of good faith, it causes a significant imbalance in the parties’ rights and obligations under the contract, to the detriment of the consumer. Schedule 2 to the Act contains an indicative and non-exhaustive list of terms of consumer contract terms that may be regarded as unfair. Those terms which address the main subject matter of the contract are excluded to an extent, however they need to be couched in language which is plain, and a prominence requirement applies. Those considering the fairness of particular terms are also advised to consider some of the very helpful historical OFT guidance on such matters.

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

These Regulations apply to on premises, off premises, and distance contracts. They establish significant information provision requirements.

Off premise and distance contract information requirements are set out in Schedule 2 to the Regulations. They also set out rights to cancel without liability, within a 14-day period of conclusion of the contract. There are key provisions relating to the commencement of services within the cancellation period, whereby explicit consent and acknowledgement of the loss of the right to cancel must be obtained, and where a failure to adhere may cause significant risk to app and website providers and operators.

If an obligation to pay is present, operators and providers must make the consumer aware in a clear and prominent manner, and directly before order conclusion. Explicit acknowledgement must be included – a tick box can be employed, but it must not be pre-ticked. Specific wording is referred to in relation to ‘pay’ buttons.

The Alternative Dispute Resolution for Consumer Disputes (Competent Authorities and Information) Regulations 2015

These Regulations require the provision of information concerning the availability of alternative dispute resolution services upon websites and in terms and conditions, where the trader is obliged to use such services. They also generally require in the event of exhaustion of internal complaint procedures provision of such information.

Platform terms

Each major app delivery platform has its own requirements as regards app provider terms. It is crucially important that any terms drafted to accompany an app comply with these. A failure to comply, or indeed a failure to include any bespoke terms (leading to implicit use of the platform’s standard, generally foreign law, terms) causes significant risk.

Existing legislation

One should also not forget existing legislative requirements. One example would be the Consumer Protection from Unfair Trading Regulations 2008. These protect consumers against misleading actions and omissions which cause different transactional decisions to be taken. They also set out a list of practices which are considered unfair in all circumstances.

Regulation of consumer credit related activities should also be considered where credit is provided to consumers, or indeed any individual, sole trader or partnership of three persons or less.

Where a provider or operator is dealing in personal data, as will generally be the case with online operations, compliance with the Data Protection Act 1998 is of crucial importance, and a good privacy and cookie policy is to be recommended.

Content also requires appraisal with respect to the Advertising Standards Authority CAP Code.

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Call us for free on 0330 159 5555 or complete our online form below to submit your enquiry or arrange a call back.