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Top fashion legal topics – #5 Fashion and online retail

We dedicated this week to fashion and IPT (intellectual property and technology) issues. After wearable technologies, special rules for foreign franchisors in Italy, 3D Printers à la mode, social media and fashion this IPT catwalk goes on with some lines regarding fashion and e-commerce.

The vast majority of the fashion players are increasing their online sales. They are becoming more and more online retailers.

First of all a good purchase experience in an online store needs a good navigation in the website. And a good navigation in the website is possible with the optimization of the use of cookies. But the use of cookies is regulated by the EU Directive 2009/136 as implemented in the different European member states. Therefore every manager of online stores should take into account this specific regulations. Moreover big companies which sell their products in more than just one member state shall comply all their (local) webpages with the different local implementation of this Directive. As far as Italy is concerned, after the public consultation launched by the Italian Data Protection Authority some months ago, a new specific regulation is waited in the next few months.

Online stores and online payments attract fraudsters. It is advisable that online stores managers set up a robust anti-fraud system. These controls and security measures are not only automatic (firewall, software, security systems) but should be carried out also by a dedicated anti-fraud team (depending on the size of the company and the volumes of sales of the e-store). Alarm bells could be for instance a discrepancy between the billing address and the delivery address (obviously this could be perfectly legal in case, let’s say, I am making a gift to a friend for his birthday). In this cases fraud teams usually take information also from the internet and the social media, even from Google Maps in some circumstances. In suspect cases, another alarm bell is the kind of item purchased. Fraudster are usually interested in most resellable goods (fragrances, underwear, polo and so on).

The set up of an online store implies also the review of logistics for the companies, warehousing for instance. The main difference between off-line and online retail is that in the first scenario, generally speaking, companies have few high value orders from their retailers while in an online scenario there is a number of small transactions whose average value is much lesser. Furthermore the delivery of the online purchased goods becomes an issue. Which is the best choice – for instance – for a big fashion player acting in different countries? A “one size fits all” solution? In some cases this could be a good compromise: having a unique transport service providers for all the countries. In some other circumstances maybe it is better to address to different local national carriers (which means to deal to a number of different contracts and requirements).

Online sales are sometimes promoted by couponing. In such a case, companies dealing with different jurisdictions should check out how this way of selling goods is governed in each country. Furthermore specific promotions may be available only through specific websites of a possible partner of the online retailer. This circumstance may entail a liability for unfair commercial practices or deceptive advertising, as mentioned in the yesterday’s post.

Last but not least, online retailers shall have terms and conditions of sale in compliance with local laws (remember that in Italy right of withdrawal for consumers is provided by the law in the framework of an online purchase).

Processing of data and in particular marketing processings shall comply with local laws and regulations. With respect to data protection and e-commerce, maybe it is useful to mention the so called soft spam exception provided for by the Italian Data Protection Code: where a data controller uses, for direct marketing of his/her own products or services, electronic contact details for electronic mail supplied by a data subject in the context of the sale of a product or service, said data controller may fail to request the data subject’s consent, on condition that the services are similar to those that have been the subject of the sale and the data subject, after being adequately informed, does not object to said use either initially or in connection with subsequent communications. The data subject shall be informed of the possibility to object to the processing at any time, using simple means and free of charge, both at the time of collecting the data and when sending any communications for marketing purposes. 

The above is a very short outline of the issues connected to e-commerce. In any case, as usual, feel free to contact me, Gianluigi Marino (gianluigi.marino@dlapiper.com), to discuss. Also join our IPTitaly group on LinkedIn.