Important Laws That Impact UK-based Webhosting Businesses

Posted by on 2/1/2011
Almost all websites and associated businesses in the UK are affected by the E-Commerce Regulations which came into force in the UK on 21st August 2002. The regulations known as Electronic Commerce (EC Directive) Regulations 2002, implement the EU's E-commerce Directive into UK law. Even if a UK website operates from a server located in the US, it will be covered by this directive. Under these regulations, a UK based websites terms and conditions must meet the laws of every Member State in which consumers can buy its products. Service providers must provide certain minimum information: • The name of the service provider must be given somewhere easily accessible on the site. This might differ from the trading name and any such difference should be explained – e.g. "XYZ.com is the trading name of XYZ Enterprises Limited." • the email address of the service provider must be given. It is not sufficient to include a 'contact us' form without also providing an email address. • The geographic address of the service provider must be given. A PO Box is unlikely to suffice as a geographic address; but a registered office address would. If the business is a company, the registered office address must be included in any event. • If a company, the company's registration number should also be given. • If the business is a member of a trade or professional association, membership details, including any registration number, should be provided. • If the business has a VAT number, it should be stated – even if the website is not being used for e-commerce transactions. • Prices on the website must be clear and unambiguous. Also, state whether prices are inclusive of tax and delivery costs. As long as a web host complies with these regulations, it is generally not liable for any material where it: • acts as a mere conduit; • caches the material; or • hosts the material. Compliance with the Regulations is a defence to a criminal prosecution being brought against the service provider When a web host stores information provided by a user, the host is not liable for any criminal sanction as a result of that storage if: • the service provider "does not have actual knowledge of unlawful activity or information"; • upon obtaining such knowledge, it acts expeditiously to remove or to disable access to the information; and • the recipient of the service was not acting under the authority or the control of the service provider. Where a claim for damages is made, the host must act expeditiously to remove or disable access to the information if it is "aware of facts or circumstances from which it would have been apparent to the service provider that the activity or information was unlawful" – i.e. constructive knowledge, rather than actual knowledge, will suffice. Consequently, whilst there is no obligation to monitor the content of a website, a service provider should not turn a blind eye to how its services will be used. The hosting exemption does not apply in civil proceedings that do not seek damages or another pecuniary remedy. So if a lawsuit seeks an injunction only, such as a court order telling the web host to stop doing something, the host cannot rely on the exemption. Web hosts must check these two sites from time to time. These sites generally provide information on changes to any laws affecting businesses in the UK. Office of Public Sector Information http://www.opsi.gov.uk/ Department for Business, Innovation and Skills http://www.bis.gov.uk/ Other Resources: www.hostlegal.net - 2010 Reseller Protection Kit - UK version