Common European Sales Law faces rocky reception
Despite strong backing from the European Parliament, proposals for a Common European Sales Law (CESL) are likely to be bogged down in the European Council, due to opposition from a majority of member states, including the UK, France and Germany.
Poland, Luxembourg and Estonia are in favour of the bill to create a pan-European contract law for cross border online sales. Traders and consumers would opt-in to CESL, which would sit parallel to national law.
Italy is potentially a supporter, and could use the country’s upcoming Presidency of the European Union in July to give the CESL some much-needed political momentum.
But most member states remain against it - swayed by lobby groups who want the proposal ditched - or simply don’t see it as a priority. Germany, Austria and the UK have questioned the legal basis of the proposed CESL in the past.
Council working groups are examining the technical details of the bill, but negotiations between the Parliament and Council on a final draft, which must be agreed upon by both institutions before it becomes law, are unlikely to begin until 2015, at the earliest.
Ursula Pachl, Deputy Director General of BEUC, the European Consumer Organisation, said: “E-commerce businesses and consumers are in chorus in their concerns over CESL. So we strongly hope that the Council will see the risks involved and shelve this proposal before it passes the final hurdle.”
BEUC and Ecommerce Europe, a trade association representing online dealers, said the CESL will lead to more red tape for businesses, cause customer confusion and offer weaker shopper protection than some existing national laws. BEUC would prefer a regulation introducing an EU sales law.
416 MEPs voted for the CESL, which will affect Internet and phone transactions, last month, with 169 voting against and 65 abstaining. Shortly afterwards, Justice Commissioner Viviane Reding called on the Council to quickly put the proposal to a vote.
The European Commission said the CESL would improve the digital single market by helping businesses market their goods and that it would offer a high level of consumer protection.
The EU's single market's cross-border trade still has barriers due to differences between contract laws. They make selling abroad complicated and costly.
The 28 different sets of national rules can lead to additional transaction costs, a lack of legal certainty for businesses and a lack of consumer confidence, according to the European Commission.
Small and medium-sized enterprises which represent 99% of all companies in the EU, are particularly affected by higher transaction costs.
Currently, businesses wishing to carry out cross-border transactions must adapt to the different national contract laws of the member states, translate them and hire lawyers, costing an average €10,000 for each additional export market.
The Common European Sales Law will allow businesses to sell their goods on the basis of one single law and single IT platform, which will allow considerable cost savings, the Commission says.