What you need to know about the new website law

So who remembers the cookies panic from a few years ago? When website owners were obliged to put obtrusive cookies notices on their websites for the first time:

This is what cookies are; this is what cookies do; now click here to signify your consent to their use. Not that you really have any choice if you want this website to work properly. Does this make any sense to you? No, I thought not.

Many businesses weren't particularly keen on these notices: understandable really, given that many of their technophobic customers simply failed to understand what they all meant.

Even worse, hundreds, if not thousands, of biscuits were lovingly baked and painstakingly photographed only to be callously thrown away on the first morning after Cookie D-Day (26 May 2012), their sole use being as stock images in the embarrassment of articles on the cookies law.

The satirical website, the Daily Mash, summed up the cookies law neatly in their notice:

We’ve updated our privacy policy, not that you care. You can read it or click [on a button stating 'Whatever'] to get rid of this annoying box and carry on as before

So if 2012 was the year of the 'Great Cookie Panic*', what will 2014 turn out to be?

In our considered estimation, 2014 will be the year of the 'No Going Back Button', when Internet traders need to update their online ordering and payment systems to ensure that they comply with the Consumer Rights Directive (2011/83/EU). The English law implementing the directive comes into force on 13 June 2014.

So what exactly do businesses need know?

Let's have a look at the actual text of the new implementing English law: the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013.

Regulation 14(4) of these Regulations states:

If placing an order entails [a consumer] activating a button or a similar function, the trader must ensure that the button or similar function is labelled in an easily legible manner only with the words ‘order with obligation to pay’ or a corresponding unambiguous formulation indicating that placing the order entails an obligation to pay the trader

In other words, businesses need to ensure that the button which a customer clicks on when paying for goods and services makes it 100% clear that payment is being made.

Personally, I think that the legalistic formulation which is suggested by the Regulations ('order with obligation to pay’) is too clumsy: if I order something, of course I am going to pay for it. This statement suggests to me that I am being dopey and missing something. Only I'm not. I think.

A better and much simpler formulation is arguably to state 'pay now' (see page 4 of government guidance on this law) although it is worth bearing in mind that this will not necessarily work in all circumstances. Such a 'pay now' button might not work if, for example, taking payment is to be deferred (eg if payment is preceded by a free trial period). That said, in most circumstances, it should work.

So now that we know what is acceptable, we really ought to consider what isn't. You won't be surprised to learn that there isn't an exhaustive list of what isn't acceptable. However, our view is that these common formulations don't hit the mark and should not be used:

  • 'place order'
  • 'continue'
  • 'register'
  • 'join here'
  • 'become a member'

Now here's the fun part: failure to make necessary changes to your ordering and payment system means that customers are not bound by the contract. Now, I am no expert in capitalism, but I am guessing that for most businesses this is not an ideal or sustainable model in the long-term. The price of doing nothing could be fatal to an online retailer.

Let's take, by way of example, a travel company selling package holidays:

A customer agrees to buy a family ski holiday to the Alps during February half-term—typically a very expensive time of year to go. She clicks on the purchase button on the website to make a deposit payment of 20%. The travel company then goes ahead with booking a large chalet, paying the chalet owner upfront in full for her family, and others.

A few weeks later the holidaymaker decides that she no longer wants to go. Family circumstances have changed. Normally, the terms and conditions would kick in and deal with what happens in such circumstances. She would, for example, typically lose her deposit. However, the canny customer has found out that the button is illegal as it fails to contain the relevent wording, and thus she is not bound by the contract. This means that none of the travel company's terms and conditions are binding on her.

In the absence of any other remedy of the travel company, such as fraud, there is uncertainty under this law on what it would be entitled to do in such circumstances. Would it be able to recover any monies from the customer for the monies that it spent over and above her deposit? Could it keep her deposit? There are no cases yet on this law so it is difficult to say. I wouldn't hold my breath though.

The key, in conclusion, is for businesses to ensure that they have implemented the new law properly.

In the majority of cases, the changes to their ordering and payment systems should be minimal. That said, there are other requirements that businesses will have to consider and prepare for under the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013 so businesses need to start looking at these regulations in detail now.

As for cookies, this is what they look like, in case you've forgotten:

* It is certainly interesting to see how few complaints there have been to the Information Commissioner's Office on cookies. As it says on its website:

Between July and September 2013, we received ... 73 concerns reported about cookies via our website. In the same period, individuals used our website to report 39,647 concerns about unwanted marketing communications.

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