eCommerce: A market without borders?[fr][de] 

The most relevant piece of European legislation on eCommerce is the Electronic Commerce Directive adopted in June 2000, which established common rules on a range of issues related to eCommerce. To guarantee legal certainty across the EU, the directive states that the applicable law is that of the member state in which a service provider is established. At the same time, it excludes prior authorisation for foreign online companies wishing to operate in other member states. 

The directive also deals with commercial communication (including unsolicited adverts, for example), contracts concluded by electronic means, the information service that providers must make available to users (various contact details) and the liability of intermediary services in transmitting, 'caching' and storing information.

The basic EU rules for online services were laid down by the Transparency Directive  adopted in June 1998, which clearly distinguishes information society services from broadcasting and telecommunication ones. The new definition covers online professional services (e.g. estate agents, insurance, travel agents), interactive entertainment (e.g. video on demand, online video games), online information (e.g. electronic newspapers, financial information), virtual shopping malls and distance-learning services.

In addition to these directives, eCommerce is also regulated at European level by rules on consumer rights. The field is governed by a legislative package of eight directives. Among these, the one on "Distant selling ", adopted in 1997, is the most relevant to eCommerce. The Commission is currently reviewing this package.

Despite a steady increase in the number of people connected to the Internet and the related rise in online sales, only 6% of EU consumers engage in cross-border eCommerce and just 3% of retailers have an online shop, according the latest Eurobarometer poll on the subject, published in November 2003.

The European Commission considers the development of eCommerce to be a key factor in completing the Single Market and allowing consumers to make purchases regardless of national borders.

In order to boost online commerce, the Commission is currently carrying out a review of the so-called consumer acquis, the EU legislative package on consumer policy. The objective is to clarify and harmonise rules across the EU and therefore strengthen legal certainty when offering or buying an online service. The main points at stake are as follows:

Consumer education

Often the decision not to buy online is determined by consumers' poor knowledge of their Internet rights rather than a lack of regulation. It is therefore essential to increase consumer confidence in the digital environment. An EU initiative was launched to tackle this issue, called the Dolceta project (Development of Online Consumer Education Tool for Adults).

What rules to apply?

In case of a dispute over a cross-border online contract, the question of which national rules should apply arises. The Commission review seems to favour the 'country of origin' principle, whereby the legislation of the member state in which the company is based applies. Consumers are not happy with this, and usually prefer the 'country of destination' principle, whereby the applicable legislation is that of the member state in which the consumer is resident.

Meanwhile, small businesses have expressed fears that the introduction of harmonised EU rules on the choice of jurisdiction in cross-border disputes (the Rome 1 regulation) will hinder growth and jobs as compliance with 27 consumer laws would be too costly (EurActiv 22/11/07). 

Harmonisation

The current EU legislative framework has established various common rules but leaves several issues up to the member-state authorities. The Commission and a clear majority of stakeholders are in favour of increased legal harmonisation and a horizontal legislative instrument, according to the results of a public consultation launched by the Commission. This would favour consumers by ensuring higher legal certainty, as well as entrepreneurs operating across borders by establishing a unique EU e-invoicing system, for example.

Security of online transactions

In order to boost online commerce, it is essential to guarantee a high level of security for all transactions. Credit cards and new payment methods, such as Bill-Me-Later and PayPal, have a crucial role in strengthening perceived and actual online security. 

Czech MEP Zuzana Roithova, in her report on "consumer confidence in the digital environment", proposed introducing an external audit for "certain specific types of electronic services where there is a greater need to ensure that they are fully secure", such as Internet banking. To combat fraudulent behaviour, the MEP also suggests creating a European early-warning system which would allow consumers to report deceptive activities using an online form.

Trustmarks

Consumers' trust may be also increased by the use of trustmarks. The Commission could introduce a European logo for certified websites operating in the area of cross-border e-commerce. The subject is currently being debated in Brussels.

"A horizontal cross-sector legislative instrument should be based on full targeted harmonisation", said Consumer Commissioner Meglena Kuneva. 

"In other words, it should target the issues that raise substantial barriers to trade for business and deter consumers from buying cross-border. Full harmonisation means that the member states would not be able to go beyond the proposed level of protection by introducing stricter consumer rules in the harmonised field," Kuneva added.

"We are strong supporters of the Commission's Rome 1 proposal in its original form and hope that it will enjoy strong and enthusiastic support across the entire Commission," said Jim Murray, director of European consumers' organisation BEUC. "It would seem therefore logical to apply the law of the consumer's country," Murray added.

"Jupiter Research has projected that Internet spending in Europe will reach €117 billion by 2010, with more than 145 million European Internet buyers. As impressive as those numbers sound, truly unlocking the power of e-commerce will require the elimination of many of the current barriers to cross-border trade," said Paloma Castro Martinez, head of the Brussels office of eBay.

"The Internet has the potential to be the key driver of shopping without boundaries," said Susanne Czech, secretary-general of EMOTA, which represents the long distance-selling and eCommerce sectors.

"We support targeted full harmonisation. Its scope must be clearly defined," said Carlos Almaraz of BusinessEurope, the Confederation of European Business.