ECJ Clarifies: Here's How Your Order Button Must Look
The so-called “button solution” from 2012 was intended to protect consumers from hidden costs and increase transparency in online commerce. It was prompted by the design of many online stores, where customers could never be entirely sure whether another checkout page would appear or if the order was already being processed. This issue remains relevant today, as some companies still like to make the ordering process as vague as possible to boost conversions. In a recent case, the ECJ had to issue a warning.
ECJ Strengthens Consumer Rights for Online Orders
Prospective buyers must clearly understand on the checkout page—that is, the final page of the ordering process—that with a final click, they are entering into a legally binding contract for the purchase of goods or services that entails a payment obligation. Since this can sometimes be understood and interpreted very subjectively, the safest approach is to label the “Buy” button “Place order with payment obligation” in accordance with the wording of the law. This has just been confirmed by the European Court of Justice (Case C-400/22 – Conny). In addition to “Place an order subject to payment,” other formulations such as “Place an order subject to charges,” “Enter into a contract subject to payment,” or “Buy” are also permitted, as they clearly indicate that a payment obligation arises.
This obligation on the part of the business operator applies even if the payment obligation is contingent on the fulfillment of an additional condition, the ECJ explained in its corresponding press release. The case in question involved debt collection services booked online, which were intended to trigger a fee for the clients only upon successful completion.
Warning: These Are the Consequences of Incorrectly Labeled Buttons
It comes as little surprise that an incorrectly labeled order button constitutes a violation of the regulations and thus a breach of competition law. What many people don’t know is that if the company has failed to fulfill its duty to provide information, the other party is not bound by the order—which can have far-reaching consequences, for example, in the event that a delivery has already been made. However, no one is prevented from voluntarily confirming an order that is otherwise invalid, thereby still saving the contract.
Risks and Penalties for Noncompliance
Failure to comply with legal requirements may result in various legal and financial penalties:
- Consumers may rescind the contract.
- Heavy fines for competition law violations are possible.
- Damage to reputation and loss of customer trust.
- Legal disputes and potential claims for damages.
To mitigate these risks, all e-commerce businesses must ensure that their order buttons comply with current rules and regulations regarding labeling. It is advisable to regularly review case law and seek legal counsel if necessary.
Why Clear Labeling Is Important in Online Retail
Clear and transparent information increases consumer trust and strengthens customer loyalty to your company. Studies show that clear and informative labeling on order buttons can increase the conversion rate. Satisfied customers are more likely to shop with you again and recommend your store to others.
Conclusion
The European Court of Justice confirms that clear and legally compliant order buttons are a must for every online store. Use the legal requirements to your advantage to avoid cost pitfalls and strengthen your customers’ trust. Make sure your customers always know exactly what they’re getting into—from the first click to the completed purchase.
