The rapid growth of eCommerce has provided widespread benefits for both customers and merchants. But, just like we have to comply with certain laws in brick-&-mortar businesses, it is essential for South African online business owners to understand the various eCommerce laws and regulations in South Africa.
In addition, it is also important to remember that the law is fluid and subject to change. This means it is vital to stay constantly informed. In this article, we spotlight some of the most important things to be aware of from a legal perspective when running an online business.
Setting up an eCommerce site
Your online business must actually be managed by a legitimate, registered company, in South Africa or somewhere else. This is to ensure that your customers have recourse to a real entity should something go right/wrong. Further, ensure that you choose the right company structure to suit your methods and needs.
When setting up an eCommerce site, the most common steps include:
- Considering the form of company to be incorporated (whether private, public or non-profit) as these are incorporated for different purposes.
- Incorporating the company with the Companies and Intellectual Property Commission (CIPC). The main constitutional document for a South African company is its Memorandum of Incorporation (MOI).
- Considering licenses that a company will need to obtain to operate certain businesses (such as a liquor license or bookmakers’ license).
- Considering the registration of intellectual property (such as trademarks, domain names and/or patents).
- Registering for the correct taxes.
- Registration with the Compensation Commissioner if the company has any employees.
Most NB legislation to keep in mind
The following eCommerce laws primarily govern contracting on the internet in South Africa:
- Electronic Communications and Transactions Act (ECTA).
- Consumer Protection Act (CPA).
- Protection of Personal Information Act (POPIA).
- National Credit Act 2005 (NCA).
- Regulation of Interception and Monitoring of Communications and Provision of Communication-Related Information Act (RICA).
The Electronic Communications and Transactions Act
The Electronic Communications and Transactions Act (“ECTA”) acts as the primary legislation in the regulation of eCommerce in South Africa to provide legal certainty on eCommerce and electronic records. The ECTA facilitates and regulates electronic communications and transactions, including issues relating to consumer protection, electronic signatures, electronic evidence and cybercrime. In the same vein, South African law further governs what information needs to be displayed on an eCommerce website. In addition, it is imperative to have proper terms and conditions that set out the sales, product and service information.
Although the ECTA is the primary legislation governing eCommerce, your business must be compliant with general legislation that may be applicable to your specific business.
Information you legally have to display on your site
South African law requires you to display certain information on your website, and this includes the following:
- Full name and legal status of your company
- Company registration number, name of office bearers and company’s place of registration
- Membership of any self-regulatory or accreditation bodies to which the company belongs and its contact details
- Any code of conduct to which the company subscribes and how the code can be accessed
- Physical address and telephone number
- Email address
Sales or Product Information
- A sufficient description of goods or services to enable a consumer to make an informed decision
- Price of goods/services, including transport costs, taxes (such as VAT) or any other fees
- The manner of payment
- Terms and conditions that apply to the transaction
- The time within which goods will be delivered or services rendered (legislation prescribes minimum delivery times)
- The manner and period within which consumers can access and maintain a full record of the transaction
- Return, exchange and refund policy
- Any alternative dispute resolution code to which the company subscribes
- Minimum duration of the agreement, where the agreement is for the ongoing supply of goods or services
- Cooling-off rights of consumers.
Terms & Conditions
Moreover, you must remember to make sure that your terms and conditions are displayed properly and prominently on your website. In the same vein, it is also important to note that for a business to be able to enforce their terms and conditions, the consumer must have agreed to them before the transaction taking place.