legal aspects of social commerce sirius legal at bdma legal day 2015

Legal challenges of m- & s-commerce

BDMA Legal Day, 15 January 2015


Social sellingSocial commerceSocial auctionsVisuel sellingReview sellingCrowdselling

s-commerce = social media = mobile devices (+/-75%)

= m-commerce

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Consumers are ready for social commerce

42% of consumers would buy social if they knew payment data was safe55% will click on content shared by peers52% will share ads with peers63% browses social media to look for deals

(2014 DigitasLBi syrvey in US)

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Estimated turn over for social commerce in US alone in 2015:

15 billion USD (estimate by Invesp and DigitasLBi)

2015 is said to be the year of final breakthrough ofsocial and mobile.

Turnover could go up to 56 billion over time (in US)

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Social sellingSocial commerceSocial auctionsVisuel sellingReview sellingCrowdselling

Driving traffic or Generating conversation or Advertisement & marketing

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By 2011 Dell outlets had already sold in excess of $7 million in products through its Twitter feed.

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Social commerce from the lawyer’s point of view:

Actual product offering+

Actual transaction

Both through social media

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2014 offered a breakthrough

Several social media platforms are working on “in platform” s-commerce/m-commerce solutions

09/14: Twitter launches beta buy buttonCurrently tested by small % of U.S. users

Tap "buy" button, receive product info and enter shipping and payment information.

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Legal challenges of m- & s-commerceSirius Legal



Twitter users will only see the shoppable tweets if they are following that brand or artist

Both iPhone and Android are supportedFeature also saves users' payment and personal information for future purchases

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05/14 Amazon “add it now, buy it later”

Link Twitter account to Amazon accountAdd to shopping basket by tweet with hashtag #AmazonCart. Customers never leave Twitter feed"Add it now, buy it later"

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Facebook is working on their buy button

Pinterest, Instagram, …

Responsive sites have become standard business practice

…

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Facebook is working on their buy button

Pinterest, Instagram, …

Responsive sites have become standard business practice

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The legal fine print…

E-commerce = s-commerce = m-commerce = distance sales

Consumer protection

As soon as actual offering + transaction

(if not: mere advertisement)

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Consumer protection is key

1992 Wet Handelspraktijken en consumentenbescherming2005 EU Richtlijn 2005/29/EG2010 Wet Marktpraktijken en consumentenbescherming2011 European directive 2011/83/EU consumer rights in

distance sales31 December 2013:

Boek VI WER: Marktpraktijken en Consumentenbescherming in Staatsblad.

30 May 2014 kick of date


The legal fine print…

New rules for distance sale and e-commerce“Level playing field” in entire EUChanges for Belgium not all that bigSales period limitation smuggled in through back door

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Basis of distance sales regulations:

Information to consumer

• Company ID• Price and discounts• Delivery and payment costs• Steps in order proces• 14 day cooling off period • Handling of return shipments• Long term subscription services > 1 year

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New since 2014:

Information to consumer

• Principle characteristics of product• Total price, incl all costs• 14 day cooling off period• Delivery conditions• 2 year warranty on consumer goods• Professional and sector codes• Complaints procedure and mediation

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When should information be given?

in most cases: “Before order confirmation”

> Information can be given in General Terms and Conditions

Sanctions: e.g. reimbursement of costs if consumer was not warned about costs

Burden of proof lies with seller

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But in some cases: “At the start of order proces” (art. VI.46 WER):

• Accepted payment methods • Offered means of delivery• Limitations in delivery (e.g. “only within Benelux”)• Limitations to offer (limited in time, minimal quantity, …)

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How does this fit into social and mobile commerce?

Same rules applyNothing specific on social commerce in EU Regulation / WER1 article relevant to mobile (VI.46, §4):

Limited information taking into account limitated available spaceShould always contain: ID seller - Basic product info 14 day c/o period - total price

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• What is “start of order proces” in social commerce?• How to fit basic info into 1 tweet?• How to pass legal info through a video app?• How to mention 14 day c/o on video or picture?• …?

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Repeated information: “upon order confirmation” (art. VI.46 WER):

• Or at the latest upon delivery• On a durable medium

(pdf, word, html, not a link to website)

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Another new information obligation:

“Order with payment obligation”

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Final issue

Consumer should explicitely accept GTC

• Retweet?• Facebook Messenger message?

• Burden of proof of acceptance lies with seller

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And then yet another one

Privacy…

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Other relevant rules in e-commerce in general

14 day cooling off period

• 14 days throughout Europe now• Full refund within 30 days• “Unused”, “Unopened”, “original packaging”• Without need to motivate• Repeat rights in order confirmation• Limited exceptions• Mandatory law

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• Obligation for consumer to return within 14 days• Model form replaces former warning• Model form used = information duty respected• + Standard return form

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14 day cooling off period - exceptions

1 Services if service started within 14 days and consumer has priorly accepted

2 Financial products (shares, …)

3 Custom made goods

4 Perishables

5 Hygiene, public health, if seal has been broken

6 Incorporated into other goods

7 Alcohol if delivered after +30 days and price fluctuates outside of seller’s coltrole

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14 day cooling off period - exceptions

8 Urgent repares

9 Audio video software if seal has been broken

10 Newspapers and magazines

11 Public auctions

12 Hotels, transport, catering, leasure “if a specific date is mentioned”

13 Digitale content if use has started before 14 day and consumer has accepted

14 Lottery and casino games

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No 14 days offered: consumer retains good and gets reimbursed

14 day right not mentioned: extended period up until 12 months + 14 days, unless “repaired”

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Delivery

• Delivery within 30 calender days• Unless otherwise agreed upon• Not in time? Right to dissolve + reimburse• Reimbursement within 30 days• Risk lies with seller (art. VI.61 WER)• Burden of proof with seller (art. VI.62)

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Cost of payment

• Cannot exceed “actual cost” for seller• Problem: what is “actual cost”?

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The rabbit in the hat… Sales period limitations in Belgium

5 years of discussion: Belgian WMPC not compliant to EU lawSales period limitation and sale with loss limitation = illegalReason: Consumer protection does not allow for general limitations, Only individual sanction if “misleading” or “aggressive”Cfr. Sanoma – VTB-VAB – Zeb and others

2014 law: retro-active ratio legis attributed to sales period limitation:competition

Should not survive new EU testMeanwhile: Belgian e-tailers suffer competition handicap twice a year

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