Results of the Online-shops’ Legal Audit
21.06.2010
Lawyers of the Law Firm ‘Moskalenko & Partners’ have recently conducted the legal audit analysis of 30 popular Online - shops (hereinafter - OS) rated top 100 by the Internet portal bigmir.net taking into account their activities in accordance with the legislation of Ukraine. According to the audit results a great number of minor and serious breaches of the law have been found, some of which may be the reason for the application of legal liability by the public authorities, consumers and contractors, and, therefore, such breaches need urgent solutions.
The activity of almost all of the tested OS, to some extent, does not meet the requirements of the Constitution of Ukraine, Civil Code of Ukraine, Law “On Protection of Consumer Rights” and the Law of Ukraine "On electronic documentation circulation” as well as the Rules of the sale of goods outside trade and office premises, which are special normative acts on the activities of Online trade.
Direct violation of the law on consumer protection is the lack of: mandatory details and contacts of OS; instructions for the necessary amount of capacity of the buyer who signs a contract with OS; relevant, accessible, accurate and timely information about products and their quantity, quality, range, basic properties, producer, seller, etc.
Not all OS indicate that when the product is transferred to consumer, such a consumer is given a receipt and other needed documents that authorize the deal, the warranty on the product, etc. According to part 6 of art. 12 of the Law of Ukraine "On Protection of Consumer Rights”, if consumers were not given a document certifying the fact of trade or transaction outside office premises, such a transaction is not considered to be a legal reason for obligations of the consumer to appear.
Owners of OS are legally unprotected with respect to intellectual property rights under current legislation as 90% of OS do not indicate on their websites any data on registered trademarks, copyrighted computer software, databases of OS clients and suppliers, trade names and other objects of intellectual property which may be under the framework of state protection. Absence of OS copyright in computer programs for the operation of OS also means the right of the programmer, who created an appropriate program application, to sell at any time such a program to his rival OS for personal or commercial usage.
The conducted analysis of the OS sites content leads to the conclusion that in 90% of cases serious breaches of the legislation take place when concluding contracts of sale of goods in the OS. OS sites basically do not provide with necessary, reasonable, accurate and timely information on products and their quantity, quality, range, basic properties, producer and vendor, etc., which is the direct violation of the laws of Ukraine.
None of the analyzed OS is protected from possible recognition of its contracts to be invalid and, as a result, returning the money paid by the consumer back, as all electronic documents of all analyzed OS lack digital signature or agreement on the application of parties signatures, in offers made by OS to buy certain goods no essential conditions of purchase contracts are stipulated.
In most of the cases OS make deliveries by means of a courier. When the couriers are given money for delivered goods the risk of courier’s disappearing with obtained money may occur. In addition according to legal provisions authorized representative of an entity that sells goods outside trade or office premises is to present a consumer proof of its belonging to the entity and certain credentials for the operation. Thus, the courier should always have representative powers from the OS and the relations between courier and OS must be properly authorized and proven.
90% of OS do not inform their clients that the data of such clients will be entered and stored in the OS database, which may become a direct violation of the Law of Ukraine "On protection of personal data”, which will take effect from January 1, 2011.
Equally serious is the violation of bidding some OS products in foreign currency without making certain equivalent in national currency, as well as the lack of stipulation if terms of offered proposals for sale of products and discounts for them.
Unfortunately, all of the violations can lead to very negative consequences for the owners of OS, such as: consumer restitution, recognition of contracts to be invalid or termination of contracts, fines in favor of the state coffers or temporary suspension of the requirements of OS by the order of the State Committee on Consumer Protection and Control of Ukraine.
Therefore, owners and managers of such stores are advised to make legal operation of their Internet business in compliance with the legislation of Ukraine ASAP in order to increase the business reputation, surge earnings and insurance from possible additional expenditures.
The activity of almost all of the tested OS, to some extent, does not meet the requirements of the Constitution of Ukraine, Civil Code of Ukraine, Law “On Protection of Consumer Rights” and the Law of Ukraine "On electronic documentation circulation” as well as the Rules of the sale of goods outside trade and office premises, which are special normative acts on the activities of Online trade.
Direct violation of the law on consumer protection is the lack of: mandatory details and contacts of OS; instructions for the necessary amount of capacity of the buyer who signs a contract with OS; relevant, accessible, accurate and timely information about products and their quantity, quality, range, basic properties, producer, seller, etc.
Not all OS indicate that when the product is transferred to consumer, such a consumer is given a receipt and other needed documents that authorize the deal, the warranty on the product, etc. According to part 6 of art. 12 of the Law of Ukraine "On Protection of Consumer Rights”, if consumers were not given a document certifying the fact of trade or transaction outside office premises, such a transaction is not considered to be a legal reason for obligations of the consumer to appear.
Owners of OS are legally unprotected with respect to intellectual property rights under current legislation as 90% of OS do not indicate on their websites any data on registered trademarks, copyrighted computer software, databases of OS clients and suppliers, trade names and other objects of intellectual property which may be under the framework of state protection. Absence of OS copyright in computer programs for the operation of OS also means the right of the programmer, who created an appropriate program application, to sell at any time such a program to his rival OS for personal or commercial usage.
The conducted analysis of the OS sites content leads to the conclusion that in 90% of cases serious breaches of the legislation take place when concluding contracts of sale of goods in the OS. OS sites basically do not provide with necessary, reasonable, accurate and timely information on products and their quantity, quality, range, basic properties, producer and vendor, etc., which is the direct violation of the laws of Ukraine.
None of the analyzed OS is protected from possible recognition of its contracts to be invalid and, as a result, returning the money paid by the consumer back, as all electronic documents of all analyzed OS lack digital signature or agreement on the application of parties signatures, in offers made by OS to buy certain goods no essential conditions of purchase contracts are stipulated.
In most of the cases OS make deliveries by means of a courier. When the couriers are given money for delivered goods the risk of courier’s disappearing with obtained money may occur. In addition according to legal provisions authorized representative of an entity that sells goods outside trade or office premises is to present a consumer proof of its belonging to the entity and certain credentials for the operation. Thus, the courier should always have representative powers from the OS and the relations between courier and OS must be properly authorized and proven.
90% of OS do not inform their clients that the data of such clients will be entered and stored in the OS database, which may become a direct violation of the Law of Ukraine "On protection of personal data”, which will take effect from January 1, 2011.
Equally serious is the violation of bidding some OS products in foreign currency without making certain equivalent in national currency, as well as the lack of stipulation if terms of offered proposals for sale of products and discounts for them.
Unfortunately, all of the violations can lead to very negative consequences for the owners of OS, such as: consumer restitution, recognition of contracts to be invalid or termination of contracts, fines in favor of the state coffers or temporary suspension of the requirements of OS by the order of the State Committee on Consumer Protection and Control of Ukraine.
Therefore, owners and managers of such stores are advised to make legal operation of their Internet business in compliance with the legislation of Ukraine ASAP in order to increase the business reputation, surge earnings and insurance from possible additional expenditures.
