Internet of Things devices are modifying the path-to-purchase as we know it allowing consumers to instantly re-order everyday products with one click or one tap. How does this affect businesses in complying with the current legislation on e-commerce and consumer rights?

IoT and E-Commerce

As we discussed in our earlier posts (here and here), there are concerns about the legal boundaries that might hinder the growth of the Internet of Things and the potentials that the Internet of Things might have in the market. The Internet of Things sector will change the way we purchase items both in the real world and online tailoring our customer experience.

However, the Internet of Things might also change the way we purchase products. And the most interesting recent development in the sector is given by devices that allow the instant re-ordering of our supplies with a mere click as soon as we are running of out of some products.  

Did E-Commerce regulations keep pace with the IoT?

The EU E-Commerce Directive was issued in 2000 when the growth of the Internet was becoming a reality. Kevin Ashton had already forged the term “Internet of Things“, but people talking about it were deemed to be “visionaries“. A further development occurred with the more recent EU Consumer Rights Directive (which was implemented in Italy on June 2014 as you can see from our post here) that still seems not to consider the IoT environment.

Indeed both EU regulations provide very stringent disclosure obligations prior to the performance of online purchases. The list of information that has to be provided to the consumers before the latter is bound by an online contract is no doubt considerable, ranging from the main features of the goods or services to the arrangements for payment, delivery, performance as well as the time by which the trader undertakes to deliver the goods or to perform the service. In some cases it also requires the consumer to expressly acknowledge (usually by way of a tick box) the payment of costs (if any) additional to the mere price of the product.

How can the IoT handle such obligations?

The question is how can the trader provide all the above mentioned information to the consumer, if the latter is only requested to push a button to place an order without even having a display providing any information with regard to the order itself. Can the disclosure occurring at the time the device is configured be sufficient? And what happens if the price of the product or of its delivery changes? If the simple tick button requires a validation of the purchase through my smartphone as any other online purchase, the benefits of IoT devices would be considerably reduced.

The implementation of new smart devices might therefore make it difficult for the companies to comply with the stringent European legislation on e-commerce, which could therefore show signs of obsolesce (already!).

Many questions will need to be answered as these brand new technologies are out in the market (and growing by the minute). It will be interesting to see the developments of the above.