Commission to test ’28th-regime’ for online sales law

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The European Commission has reached the limits of what ‘full harmonisation’ of rules in the single market can achieve, and will test the waters with a "28th-regime" for its new sales law contract proposal this week, according to the EU's Justice Commissioner Viviane Reding.

Speaking at the Lisbon Council innovation summit in Brussels last week (6 October), Reding said that the proposal would represent the first time that the Commission had put forward a single market instrument without proposing the simultaneous abolition of existing member state laws.

The Luxembourgish Commissioner also hit back at industry group criticism of the proposals in advance of their publication.

The proposal, seen by EURACTIV, offers a so-called 28th–regime to a new sales contract for Europe that will enable individual traders to ‘opt-in’ to use the new instrument when they conduct cross-border sales.

Existing member states contract laws will remain in situ and run in parallel with the new instrument.

Reding said that the proposal would be her ‘gift’ to celebrate the 20th anniversary of the original Single Market Act, and pointedly criticised the full harmonisation method of operating.

A new way forward for the Single Market

She said: “Look I have seen, because I took up from my predecessor [Meglena Kuneva] the consumer rights directive which proposed maximum harmonisation, and it didn’t work, it simply didn’t work. So I had to take it up again and maneuver with the EU Council and the Parliament, and now we have a mixture of everything and nothing satisfactory.”

She said that the experience had shown that: “We have gone through the limits of the ‘full harmonisation’ [approach] we must try to do it in a different way.”

She said the approach could not be used in all areas, but she added: “I believe it is an interesting way of going ahead and trying it out and it may be a new way that we can learn to be more efficient in the rules of the internal market.”

Meanwhile Reding responded to business and consumer groups' criticismd that there are many more tricky obstacles, like language and VAT rules, hampering sales growth.

Dora Szentpaly-Kleis, a legal adviser to a lobby group for SMEs, UEAPME, said: "It is a unanimous position among our members that this is definitely not a priority."

Fears that contract may become obligation later

Reding told the Lisbon Council summit that “there are a lot of myths in the business and consumer world.” She hoped that “when the proposal is on the table then interest groups will understand that this is a way forward and out [of the financial crisis], although certainly not the only one.”

“What do we have to lose? What’s the worst that can happen? That no-one thinks it is worthwhile, and that no-one utilises it. So what’s the risk in trying?” she added.

Ben Summerskill, a spokesman for Eurochambres, said: “We support the [28th-regime] concept, but longer term there is a concern that if it gains some traction business may be obliged to offer it.”

“There is of course a political risk in putting it on the table, I have learned something in politics,” according to Justice Commissioner Viviane Reding.

“If you do things as always things are done, and handle things as they have been done, then it’s very comfortable. If a commissioner jumps out of the box and forces the world to think about it, it seems that that is against human rights!” she continued.

"In difficult economic times, the Optional Instrument in European Contract Law is a real example of justice for growth. Of course it has to be the right optional instrument. In this case 'right' means a high level of consumer protection, an easy and user-friendly system for SMEs (…) and most importantly no adverse effects on national law," Diana Wallis, a British Liberal Democrat MEP said in a statement.

 

Monique Goyens, director-general of the European Consumers' Organisation (BEUC) said in a press release: "We do not support this experimental and risky regulation as it would put business in the driving seat and allow the imposition of a lower level of protection than in the consumer's country."

"By introducing an EU 'law' which is optional for businesses, the national law then becomes merely optional also. This parallel system would increase market uncertainty, confuse consumers and decrease confidence," she added.

Goyens asked "when both Europe's consumers and SMEs have strong reservations, why is this law being pushed regardless?”

Growth in cross-border e-commerce across the European Union continues at a sluggish pace as European Commission consumer surveys have shown, indicating that much remains to be done if the bloc is to meet targets for 2020.

The EU has set itself the target of raising the proportion of EU consumers who shop online across borders to 20% by 2020, as enshrined in its 'Digital Agenda' for boosting the digital economy.

36% of EU consumers shopped online from national sellers in 2010 compared to 34% in 2009, found the 5th edition of the Consumer Conditions Scoreboard, revealing minor growth in the popularity of domestic e-commerce.

  • 12 Oct.: European Commission to unveil Draft Regulation of a Common Sales Law

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