Guide to Digital Commerce law in South Africa

Electronic commerce, commonly known as e-commerce, refers to transactions concluded using an electronic or computer network such as the internet. It involves the buying and selling of goods and services or the transfer of funds and data online. In South Africa, the primary laws impacting e-commerce are the following:

1) The Electronic Communications and Transactions Act 2002 (ECT Act)

The ECT Act recognises information generated, sent, received or stored by electronic or telephonic means as having legal validity. The ECT Act also provides for consent to an agreement which can be in the form of a website pop up window or dialogue box where the consumer selects ‘OK’, ‘I agree’ or ‘I accept’ or by way of an electronic signature. Whatever the form of electronic transaction, the information sent, received or stored must be accessible at a later point in time.

In creating a contract between parties, an agreement is concluded by law, at the time when and place where the acceptance of the offer was received. Hence all orders through a South African website for goods and services, placed by a consumer outside South Africa will be governed by South African law. This is because South Africa is the place where the offer to purchase such goods and services was accepted.

The ECT Act protects consumers that opt to purchase goods or services online and sets a number of obligations on vendors. Protection includes data privacy, contract terms as well as requiring a marketers’, advertisers’ or publishers’ payment system to be sufficiently secured and to meet acceptable technological standards at the time of the transaction. Moreover, a vendor must provide a customer an opportunity to review an order, correct any mistakes or cancel the order before it is finalized. If advertisers, marketers or publishers fail to do this, the consumer may cancel the order within 14 days of receiving the goods or services. In such cases, the consumer must return the products delivered and be refunded. Consumers also have a right have a right to cancel a purchase and any related credit facility within seven days after the date of receipt and after seven days after the conclusion of a service agreement. In such instances, an advertiser, marketer or publisher may only charge for the direct cost of returning the goods.

When sending out a marketing communication over email, there are a few legal implications. In marketing or advertising such products, consumers must be given an option to unsubscribe from commercial mailing lists. If requested, consumers must be informed on how their personal information was obtained. One should also be aware that contracts cannot be entered into without the consumer’s consent. The lack of a response to a commercial mail does not amount to a contract. If one does not comply with this, they will be liable to a fine or imprisonment for a period of not more than 12 months.

The ECT Act also provides for the Protection of Personal Information and outlines a number of voluntary principles that advertisers, marketers and publishers may subscribe to, by recording such in an agreement with a consumer or client. The provisions to protect personal information will be reinforced by the Protection of Personal Information Act of 2013 (the POPIA), but will be mandatory.

2) Protection of Personal Information Act, 2013 (the POPIA)

The POPIA protects personal information and the use of such personal information obtained by natural and juristic persons through all transactions.  Processing of personal information under the POPIA is broad and includes activities such as collecting, retaining, storing, using or destroying personal consumer or client information.

The POPIA reinforces the provisions of the ECT Act and introduce 8 conditions of lawfully processing personal information which should be adhered to by a responsible party, failing which certain penalties are applicable. The 8 conditions of lawfully processing personal information are:

  • Accountability

  • Processing limitation

  • Purpose specification

  • Further processing limitation

  • Information quality

  • Openness

  • Security safeguards

  • Data Subject participation

In terms of the POPIA, a data subject’s right to privacy protected in line with the manner in which information is processed and retained in the digital age. The POPIA also regulates transnational sharing of personal information.

3) The Consumer Protection Act, 2008 (CPA)

The CPA applies to all commercial transactions, including electronic commercial transactions. The CPA and the ECT Act provide protection to consumers in commercial transactions. CPA and ECT Act must be read concurrently and where there is conflict, the CPA provides that the Act which affords a consumer the most protection will prevail. The Act provides 8 fundamental consumer rights, as well as, prohibits certain obligations and prohibits certain actions.

4) Copyright Act, 1978

The Copyright Act lists a number of works that are eligible for copyright protection. These works may only be protected if the work is original. If one used his or her skill and labour, the work shall be deemed as original, irrespective of whether an identical work already exists.  In an online environment, protection will be afforded to items such as e-books, online compilations, digital music, software, podcasts, etc. Online copyright issues may arise in the following instances in the context of electronic commerce:

  • Ownership of Databases

Contact databases and contact mailing lists may be used to promote products to consumers. These databases are largely compiled internally by data capturers (employees) or may be commissioned from a third party in terms of lead generation. In both instances the data will be have copyright protection as they would be original and owned by the respective copyright holder.

  • Advertising or marketing content.

When content such as the advertising copy is developed for the business by employees, the content is owned by the business and the business will have copyright protection. Content or marketing or advertising copy developed for clients will be owned by the client unless a different arrangement is agreed upon. This will include the text used in campaign tag lines, pop up adverts, campaign emails, etc.

  • Website Content

The text or copy used on websites will be copyright protected. Copyright belongs to the advertiser in term of adverts and the author, writer or publisher in terms of books, music and films. Other multimedia products such as graphics, drawings, cartoons, sound, computer programs and video clips found on a website are also copyright protected. Copyright may be infringed through unauthorised reproduction, publication, public performance, unauthorised dealing as well as making an adaption of protected work.