E-commerce has transformed the way we shop, with digital transactions taking place between various stakeholders, including individuals, businesses, and governments.[1] As the e-commerce industry continues to grow, it is important to understand the legal framework that governs it.
This article seeks to explore the legislation that regulate e-commerce, common legal issues that arise and your rights and protections as a consumer.
E-commerce in South Africa is governed by different pieces of legislations such as Electronic Communications and Transactions Act 25 of 2002 (hereinafter “ETCA”) which regulates e-commerce by providing legal requirements for safe digital transacting and fair use, Consumer Protection Act 68 of 2008 (hereinafter “CPA”) which protects consumer rights by ensuring that the marketplace is fair, accessible and sustainable, Protection of Personal Information Act 4 of 2013 (hereinafter “POPIA”) which regulates the handling of consumer’s personal information and promotes responsible data management practices, Cybercrimes Act 19 of 2020 (hereinafter “CA”) which creates and combats criminal offences within the digital space and National Credit Act 34 of 2005 (hereinafter “NCA”) which regulates consumer credit use and payment plans.
Despite the growth of e-commerce, several legal issues have been identified, including:
- data breaches – unauthorized access to sensitive information which can compromise consumer data and result in financial losses.
- unfair marketing practices – deceptive or misleading marketing tactics that can harm consumers and businesses alike.
- non-compliance with tax regulations – failure to comply with tax laws which can result in penalties and fines.
Consumers may experience several challenges or issues when engaging in e-commerce, which include receiving defective or incorrect products especially with goods advertised by international e-commerce businesses such as Shein and Temu.
What makes matters worse for customers is the difficulty in returning or exchanging products which are either defective or incorrect. This violates the consumers’ rights as enshrined in the CPA. Section 56(2) of the CPA provides that a consumer may return goods to a supplier without penalty to the consumer and at the supplier’s own risk and expense if the goods fail to satisfy the requirements and standards contemplated in section 55 of the CPA. Section 55 stipulates that goods have to be suitable for the purposes for which they are intended, of good quality, in good working order and free of any defects and should be useable and durable for a reasonable period of time. Should a consumer receive any goods that fail to adhere to the requirements set out in section 55 of the CPA, it can be returned to the supplier within six months after the delivery of the goods. The consumer may then request that the supplier either repair or replace the failed, unsafe or defective goods or refund to the consumer the full price paid for the goods. Shein on the other hand has a return policy that states that the costs of returning goods will be covered by the customer – this however does not align with section 56(2).
Further to the above, e-commerce has resulted in some customers being victims of unauthorized transactions on their bank accounts which result in financial losses. This may also be a result of a data breach on the system/platform used by the e-commerce businesses.
When a data breach occurs, the responsible party is typically the business that collects and stores the customers’ personal information. The business has a duty to protect consumer data and manage it responsibly. If the business fails to do so, it may be held liable for any damages or losses resulting from the breach.
When e-commerce businesses offer marketing that is not in line with the legal framework, they can be held accountable by regulatory bodies such as the Consumer Commission or the Advertising Regulatory Board. These bodies can impose penalties, fines, or other sanctions on businesses that engage in deceptive or misleading marketing practices.
A consumer has several rights and protections under the above-mentioned pieces of legislation including the right to fair marketing practice, right to fair and honest dealing, right to privacy and right to disclosure of information. E-commerce businesses are required by law to provide accurate and truthful information about their products and services, deal with consumers in a fair and honest manner, protect consumers’ data and manage it responsibly; and provide consumers with clear and accurate information about their products and services.
The Competition Commission of South Africa (“CCSA”) recently found that Takealot, a leading e-commerce platform, engaged in anti-competitive practices. The investigation revealed that Takealot breached the laws of fair use of e-commerce. It was found that Takealot has a lot of consumers, therefore not following fair marketing does more harm on the small outlets that are out there trying to be successful than good. Takealot was ordered to remedy its use of unfair marketing tactics that it usually used when operating to compete with its sellers during an investigative inquiry done by the CCSA through the Online Intermediation Platforms Market Inquiry Public Inquiry (hereinafter “OIPMI”).[2]
A recent example of unfair competition and exploitation is Temu and Shein’s use of “too good to be true” prices, which attracted a large number of customers over the years.The unexpected turn hit these two online shopping platforms with possible sanctions from SARS after local retailers complained about losing their customers to them in a non-healthy competition drive. The local retailers notified SARS that the international online shopping outlets do not adhere to the tax regulations that the country have in place and in doing so, sell their products at a very cheap price. They noted that this was negatively impacting their business and the country’s economy. SARS laid down that they would penalise these online outlets for not paying their customs duties. On top of the 20% flat rate of customs duties that they are to pay, SARS has included VAT effective from 1 September 2024.[3]
Customers who have experienced e-commerce issues have options for seeking recourse, which include:
- contacting the business directly;
- referral of the issue to the Consumer Tribunal;
- referral to the complaint to the relevant Ombud; and/or
- taking legal action in a court of law against the business.
Conclusion
E-commerce is a rapidly growing industry and understanding the legal framework that governs it is essential for both businesses and consumers. By knowing your rights and protections, you can navigate the e-commerce landscape with confidence and seek recourse when necessary. If you are involved in an e-commerce dispute, do not hesitate to seek legal advice from Seanego Attorneys Incorporated.
[1] Department of Communications Republic of South Africa A Green Paper on Electronic Commerce for South Africa (2000) 16.
[2] Competition Commission of South Africa Online Intermediation Platforms Market Inquiry Public Inquiry 2021.
[3] Opperman Ina “SARS Cracks Down on Shein and Temu” Sars cracks down on Shein and Temu 9 August 2024 (accessed 6 August 2025).