Other articles have often mentioned information society services (ISS) so this article will discuss in more detail what an ISS is. The E-Commerce Directive aimed to provide free movement of ISS and to regulate providers of ISS across the European Union (EU). The E-Commerce Regulations 2002 defines ISS by reference to the E-Commerce Directive. It states, ‘any service normally provided for remuneration, at a distance, by means of electronic equipment for the processing (including digital compression) and storage of data, and at the individual request of a recipient of a service.’
However, Directive 98/34/EC has been replaced with Directive 2015/1535/EU which defines ISS as ‘any service normally provided for remuneration, at a distance, by electronic means and at the individual request of a recipient of services.’ It also contains additional definitions which are:
- ‘At a distance means that the service is provided without the parties being simultaneously present.’
- ‘By electronic means, means that the service is sent initially and received at its destination by means of electronic equipment for the processing (including digital compression) and storage of data, and entirely transmitted, conveyed and received by wire, by radio, by optical means or by other electromagnetic means.’
- ‘At the individual request of a recipient of services means that the service is provided through the transmission of data on an individual request.’
The E-Commerce Directive stipulates that ‘normally provided for remuneration’ does not restrict ISS to services that involve buying and selling online. It also extends to services that are an economic activity, but are not remunerated by those who receive them. It therefore extends to services, that are remunerated by advertisers such as Google search.
The Court of Justice held that a free service could be an ISS if provided by the ISS provider to advertise its own goods and services in Mcfadden v Sony Music Entertainment Germany.
The following list is of example e-commerce activities that fall within the definition of ISS:
- Online platforms, online marketplaces, apps, or websites selling goods, services, or digital content. (Note: intermediation services being part of other overall services will not be ISS)
- Online content services such as on-demand video services.
- An online gaming app or search engine that is provided free to the end user but funded through advertising.
- Web hosting and other cloud service providers.
- Internet search engines.
- Internet service providers.
- Internet payment systems.
- Online social network services.
- Online information services. (Including those remunerated by income generated from advertising)
- Intermediaries operating or supervising electronic data interchange systems. (Note: individual businesses which use electronic data interchanges are unlikely to be ISS providers unless the fundamental purpose of the business also meets the requirements)
The following is a list of example e-commerce activities that are not ISS:
- Services provided in the physical presence of the provider and the recipient therefore not at a distance. (Note: it includes services that involve the use of electronic devices in the physical presence such as, a plane ticket reservation being made on a computer in the physical presence at a travel agency)
- Services not provided by electronic means.
- Services that are not provided through electronic processing/inventory systems such as a phone consultation with your lawyer/doctor.
- Services not provided at the individual request of a recipient such as television/radio broadcast.
- Contractual relationships between and employer and employee.
- Activities such as delivering goods or providing services offline.
- Intermediation services which form part of other overall services.
- An online booking service for an in-person appointment.
- Public authorities providing direct public services online as they are not usually provided for remuneration.
- A website that only provides information about a real-world business if it does not let customers buy products online or access a specific online service.
It is important to note that the United Kingdom (UK) is currently in an implementation period with regards to Brexit. During this period, the UK continues to be subject to EU law. The implementation period is due to end on 31 December 2020 after which some laws could change depending on any deal or no-deal.
If your business is an ISS, then there are certain laws that apply to you. At Lawdit Stay Legal we offer several packages at different price points that take the stress out of legal compliance. We even offer a free initial consultation so don’t delay, book today!