UK companies have been warned they ignore the legal pitfalls of e-business at their peril.
Speaking at an Engineering Council forum on business-to-business e-commerce, barrister Mark Taylor said the perception that the internet was a modern ‘wild west’ where anything goes could spell disaster for firms starting an e-business strategy.
Taylor, who specialises in technology and intellectual property, as well as being a qualified engineer, said: ‘This is a very dangerous belief which an alarming number of people seem to share. In fact, the internet is heavily regulated.’
Taylor gave two high-profile examples of companies stumbling into legal minefields.He said Microsoft faced the possibility of having to cut itself in half after its massive presence in the IT and internet markets led to legal action by US competition authorities.Meanwhile, Taylor said retailer Argos was left facing a £1m bill when it accidentally advertised TV sets on its website for £2.99 rather than £299. Argos eventually argued its way out of its tight corner, but Taylor said similar situations could easily arise in the B2B arena.
He outlined measures that trading websites need to take to avoid such problems. These include setting out the terms of a transaction and making sure users have to scroll through them before continuing.
Disclaimers should make it clear that the site operator is entitled to withdraw from a sale in the event of obvious typographical or mathematical errors.
Taylor said as well as in the area of contract formation, transactional websites need to address issues including possible breaches of competition law, security, data protectionand privacy and intellectual property.
Taylor was part of an Engineering Council mission to the US investigating the implications for UK e-business growth.