Ecommerce Regulations 2021: Key Compliance Steps

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Regulations and Privacy

It is undeniable that e-commerce has now become a reality that is deeply integrated into our daily lives. However, when discussing the topic, there is often a tendency to consider the phenomenon from a single perspective, that of the buyer and consumer, when it is clear that it is based on a mutual exchange between buyer and seller. The latter must comply with specific regulations in order to sell, including some, such as the New Deal for Consumer Protection, which have recently come into effect. We will now take a detailed look at what the new E-commerce regulation 2021 consists of and what it entails for sellers.

What is meant by E-commerce?

Before delving into the details of the legal aspects, it is very appropriate to start from the basics in order to provide a general overview of the situation as clearly as possible.

E-commerce or electronic commerce essentially refers to the conduct of a specific commercial activity in which buying and selling is carried out electronically via the internet.

Going even further into detail, each commercial transaction executed is the result of the meeting between the buyer's demand and the seller's offer. These two parties can engage in a process of exchange for the buying and selling of goods or services via the internet. In light of this, it is easy to understand how e-commerce is a commercial activity in every respect, and for this reason, it requires specific legal and tax requirements and obligations to be operational in accordance with the law.

The European regulations on E-commerce

According to the European directive regarding electronic commerce, the first point to consider is to determine whether it is a B2B or B2C transaction.

The first term refers to the business-to-business mode, in which a specific manufacturing company sells its products or services to a third company; the second term, on the other hand, refers to the business-to-consumer mode, in which the manufacturing company provides its products or services directly to the end consumer.

It is obvious that these are distinctly different realities, not only from a management perspective but also in terms of execution.

This directive was issued in 2000 and establishes several fundamental points, including the seller's obligation to provide all information related to their company in a transparent and clear manner, and the obligation to carry out commercial communications that are consistent with the relevant business reality.

Of course, there are also some behavioral aspects that the producer or seller must adhere to before concluding the sale, which directly involve the end user.

For example, the consumer must clearly understand the procedures for submitting a potential complaint and the solutions for resolving a possible dispute, as well as the options available during the ordering phase to correct a data entry error, or the exact steps required before successfully completing an order.

Certainly noteworthy is the aspect related to disputes.

These, in fact, often require the intervention of specific extrajudicial dispute resolution bodies to be resolved, and for this reason, the European Regulation 524/2013 established a specific body that deals with the resolution of disputes arising online.

The seller is obliged to provide such information on their platform.

E-commerce: The situation in Italy.

In Italy, to open an online business, it is necessary to follow certain steps, starting with the opening of a specific position at the Business Register through the Single Communication.

The opening of a position with this entity is nothing more than filling out a specific electronic application containing all the required information, as well as a summary statement.

The purpose of the Single Communication is to facilitate the ongoing communications between businesses and the Public Administration, ensuring that a single procedure is sufficient to comply with all legal obligations and to rectify the position with entities such as the Revenue Agency, the Chambers of Commerce, INPS, and INAIL.

Of course, to submit a request for Single Communication, it is essential to have specific requirements:

Membership in the specific Telemaco service – Consultation and Submission of Applications, available completely free of charge on the Business Register website
Possession of a PEC email address to send and receive all required communications
Possession of a Digital Signature to digitally sign with the same legal value as a traditional handwritten signature.

Once all the requirements have been met, it is possible to submit the Single Communication and proceed with the necessary bureaucratic process to open an E-commerce.

To summarize, the steps to follow are:

Immediate registration with the Business Register
Opening of the VAT number
Registration with INPS for self-employed workers or employees
Opening insurance with INAIL
Legitimate communication of the start of activity

Of course, before considering opening your own E-commerce, it is essential to be well aware of the various dynamics from both a legal and a tax perspective to avoid incurring penalties, which can be particularly hefty, capable of sinking the entire project prematurely.

Specifically, the most basic regulations that it is important to know thoroughly are those related to:

Civil Code
Advertising communications
Business activities
Distance selling
Consumer Code

We will now focus on the latter, as it is a topic that will introduce us to the new regulations of 2021.

The Consumer Code

The Consumer Code and its dynamics are applied solely when E-commerce takes the form of B2C, meaning that the sale occurs through an exchange between the producer and the end user.

Of course, the Consumer Code perfectly aligns with the guidelines already outlined by the European Regulation and the specific Decree Law 70/203, however, it adds further useful details for practical purposes, including:

The producer/seller must necessarily inform the user of all information related to their business
The final cost of the product and service must be clear and accessible at every stage of the purchase. If there are additional costs related to shipping or taxes, appropriate communication will be provided in a designated third-party space
All information related to a specific service or product must be visible at all times, starting from the phase prior to the purchase, so that the customer has the opportunity to consult it thoroughly and decide whether or not to proceed with the sale
The producer/seller must inform the end user of the possibility to exercise their full right to withdraw from the contract within a deadline of 14 days
Any information related to delivery must be clearly stated, with the understanding that the producer/seller commits personally to deliver the purchased item or service within a maximum of 30 days, unless extensions are mutually agreed upon

Of course, if the right of withdrawal is exercised by the buyer within the set date, they are required to return the purchased good, while the seller/producer commits to refunding the equivalent amount spent.

The Consumer Code, although extremely effective and comprehensive in its guidelines, has required further integration over the years to refine certain aspects.

This is because, also thanks to the advent of digitalization, there are now an exponential number of E-commerce platforms globally, and for this reason, it was necessary to review some regulations to adapt them to modern times.

Among the most successful integrations is certainly the New Deal, which we will now examine in detail.

The New Deal

The New Deal for Consumers was first enacted in early 2020 by the European Union as a response and necessary implementation to the current standards in which E-commerce has increasingly taken hold, shaping a new type of consumer.

The New Deal includes stricter rules for online shopping, with a ban on fake reviews and oversight of discounts and sponsorships.

Of course, the ultimate goal is a significant increase in transparency at every stage of the digital purchase, and for this reason, it can be considered a measure capable of facilitating the relationship between seller and buyer and ensuring high standards of security and reliability for both parties involved.

But on the sellers' side, what does the New Deal actually provide?

It establishes specific behavioral norms, including:

The absolute prohibition of publishing and/or sponsoring reviews that may even slightly alter the real value of a product and/or service
The absolute prohibition of sponsoring or promoting false discounts or price reductions that mislead the user about the real value of a product and/or service and also mask the value of the item itself
The absolute prohibition of promoting or sponsoring false messages and/or reviews that may deceive the user, leading them deceitfully towards a purchase
The obligation to inform the user in advance if the product or service they are about to purchase comes from a third-party merchant or a private individual

From the aforementioned guidelines, it is therefore easy to understand how the New Deal could not ignore today's reality in proposing behavioral norms that are unfortunately very often overlooked for purely utilitarian and economic purposes, but which, as seen in numerous cases, end up harming an entire sector.

It is also obvious that particular importance is given to the treatment and management of personal data, the so-called GDPR, which deserves a separate discussion.

E-commerce and GDPR

The processing of personal data, especially in current times, has always been a particularly thorny issue that can greatly reflect the professionalism of a business and corporate reality and determine a large part of its success or failure.

As far as E-commerce is concerned, in addition to having to comply with all the regulations already present on other websites of different nature, there are additional guidelines that must be followed to avoid incurring penalties.

One of the most important rules is related, and it could not be otherwise, to marketing activities.

This must be carried out with the full consent of the end user; moreover, when conducted via email, it is necessary for the user to provide their consent through a specific illustrative form available on the platform.

In general, every marketing and/or profiling activity must be approved by the user it is directed to through their consent, in addition to having to be necessarily mentioned on the site with specific informative forms.

E-commerce and sanctions

What happens if E-commerce refuses to comply with online store regulations or is lacking in the application of some specific guidelines?

Obviously, it is not possible to provide a single penalty or sanction, as much depends on the nature of the ongoing infraction; however, clarifying examples can be put forward.

For instance, if the issue is the handling of personal data that has not been scrupulously followed, the sanction applied will refer to that provided by current European legislation.

The same reasoning applies if the detected infractions pertain to the products themselves; there is a specific law regarding this.

A different discussion arises if the detected infractions are considered a violation of the current laws regulating E-commerce, for which the sanctions provided are those illustrated by the article 21 of Law Decree 70/2003.

In practical terms, one can receive an administrative sanction ranging from a minimum of 103 Euros to a maximum of 10,000 Euros, with a very serious possibility of doubling the final amount in cases of repeated infractions.

Conclusion

As seen, therefore, founding, managing, and administering an E-commerce is not as straightforward as one might expect.

Of course, predictive analyses must be conducted to better analyze the market and the relevant sector to ensure that one's business can stand out from the countless others already present, without forgetting that the actual launch of an online platform is only possible after all requirements and regulations have been fully met.

Of course, for the procedural process, one can rely on a professional figure such as a legal consultant, but the important thing is to be aware of the hard work that a similar business requires, also because it is only through full compliance with all current regulations that it will be possible to offer a quality service with mutual satisfaction for both the seller and the customer.

Author: Loris Modena

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Ecommerce Regulations 2021: the requirements for selling online and complying with the New Deal