The European Commission says it 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.
But the EU is currently reconsidering many provisions in the eCommerce Directive that have proven too costly and cumbersome for businesses to implement.
According to a lawyer, Patrick Van Eecke from DLA Piper, who was tasked by the Commission to review the EU's eCommerce laws, repetitive security requirements for eInvoicing and poor definitions of new online payment schemes –eMoney – have prevented eCommerce from really taking off in the EU (EURACTIV 29/01/10).
An EU survey in late 2009 on the consumption and sale of online goods across borders also concluded that Europeans are turned off by online shopping, mainly as a result of payment difficulties and a lack of trust in online consumption (EURACTIV 23/10/09).
60% of online purchases failed in the EU-backed test of 11,000 separate orders on cameras, CDs, books and clothes, the consumer survey showed.
In order to boost online commerce, the Commission carried out a review of the so-called consumer acquis, the EU's existing body of legislation on consumer policy. The result would be a Consumer Rights Directive that merges existing rules on unfair contract terms, sales and guarantees, distance selling and doorstep selling.
To address consumers' poor knowledge of their Internet rights, the EU launched an initiative called the Dolceta project ('Development of Online Consumer Education Tool for Adults').
What rules to apply?
EU Commissioner for Justice, Fundamental Rights and Citizenship Viviane Reding said she would push ahead with the contested 'Consumer Rights Directive' (CRD) despite her own recent admission that "full harmonisation of all consumer contracts would not fly".
In particular, Reding said she wanted to abolish charges of up to €2,000 ($2,700) facing companies if they want to have legal judgements in one EU country recognised in another.
A majority of stakeholders are in favour of increased legal harmonisation and a horizontal legislative instrument on eCommerce, according to the results of a public consultation launched by the Commission.
In disputes over cross-border online contracts, 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 legislation applicable is that of the member state in which the consumer resides.
According to the Commission, the CRD would strengthen consumer protection against late delivery and non-delivery, as well as setting out tough EU-wide consumer rights on issues ranging from cooling off periods, returns, refunds, repairs and guarantees and unfair contract terms. It would also free up business compliance costs by 97%, it says.
Consumer groups have been highly critical of the proposal, saying that it would dilute better standards already guaranteed under certain national laws.
Meanwhile, small businesses have expressed fear that introducing harmonised EU rules on the choice of jurisdiction in cross-border disputes (the so-called 'Rome 1' regulation) will hinder growth and jobs as compliance with 27 consumer laws would be too costly (EURACTIV 22/11/07).
The European Parliament is currently drafting amendments to the CRD and is due to cast its vote on the final text in May 2010.
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.
In October 2009, EU Information Society Commissioner Viviane Reding said the EU would be reviewing its data protection guidelines in 2010 (EURACTIV 27/10/09). Since then, EU officials have started studying ways to notify users of data privacy breaches (EURACTIV 28/01/10).
Consumer trust may be also increased by the use of trustmarks, with a European logo for certified websites. The subject is currently being debated in Brussels.
A number of countries have already adopted so-called trustmarks for online-shopping sites. The Eurolabel is an initiative that has been adopted by Germany, Austria, Poland, Italy, France and Spain.
Internet Service Providers take centre stage
Recent debate on the eCommerce directive has focused on the role Internet Service Providers (ISPs) play on the Internet and whether they should be held liable for criminal, offensive or pirated content.
The EU has been under fire for its involvement in global trade talks - held under the banner of the 'Anti-Counterfeiting Trade Agreement' (ACTA) - which are reportedly considering holding ISPs more liable for content than current laws allow.
The EU recently denied this charge in a public hearing, saying that no decision had been taken and that existing rules on ISPs' unaccountability for content they did not create would remain in place (EURACTIV 22/03/10).
Critics argue that as a result of new copyright infringement laws being discussed under ACTA, ISPs have a reason to introduce draconian measures, hidden in the fine print of consumer contracts, to prevent piracy.
In addition, a controversial lawsuit against Google in Italy triggered a row on whether websites like YouTube should also be liable for offensive videos uploaded onto their site.
An Italian judge found three Google executives guilty in February 2010 of allowing a video showing schoolchildren humiliating a boy with Down's Syndrome to stay on the site for two months before it was removed (EURACTIV 26/02/10).