Webinar - 27 November 2013

A new regime for e-commerce in Europe… but still no ‘one-stop-shop’ for cross-border transactions

Dr. Christoph Jeloschek

c.jeloschek@kvdl.nl

A new regime for e-commerce in Europe

A new regime for e-commerce in Europe

Outline1. Introduction2. What is e-commerce? - an EU lawyer’s perspective3. Key legal issues 4. The new regime for e-commerce in Europe5. Outlook: a uniform consumer sales & contract law

in the EU?6. Q&A

A new regime for e-commerce in Europe

From the old regime to…• Status quo: existing rules are incomplete and often

unclear Do I have to reimburse the consumer for all costs

if he wihdraws from the purchase within 7(14) days?

May I withhold reimbursement until I have received the goods to be returned?

Is the consumer entitled to return the goods if he has already used them?

Can I charge the consumer for services he has already enjoyed?

A new regime for e-commerce in Europe

A ‘new’ regime for e-commerce in the EU• Directive on Consumer Rights (of 25 October

2011)• overhauls rules for sales & services concluded

at a distance• introduces notion of ‘supply of digital content’

• time-line• implementation in the EU Member States on 13

Dec 2013• new rules apply to contracts concluded after 13

June 2014• new approach of maximum harmonisation across

EU

A new regime for e-commerce in Europe

Scope of e-commerce law proper• e-commerce rules relate to:

• offering of goods & services at a distance (incl. online)

• conclusion and execution of online contracts

• in essence EU rules implemented at the national level• but: fragmentation due to minimum protection

level (Member States are free to adopt more protective measures)

• new approach: maximum harmonisation

A new regime for e-commerce in Europe

Cornerstones of EU e-commerce legislation• Directive 97/7/EC on the protection of

consumers in respect of distance contracts (20 May 1997)

• Directive 2000/31/EC on electronic commerce (8 June 2000)

• Directive 2002/65/EC on distance marketing of consumer financial services (23 September 2002)

• Directive 2011/83/EU on consumer rights (from 25 October 2011)

A new regime for e-commerce in Europe

Other relevant EU laws and regulations• consumer sales law (non-conformity & guarantees)• unfair contract terms • privacy (personal data, cookies, etc.)• spam• unfair commercial practices• Intellectual Property Rights• competition law, etc, etc…. notion of e-commerce is broader than main legal concept

Key legal issues

A new regime for e-commerce in Europe

Key issues under e-commerce law • Information duties

• general information about website / online provider

• information in the course of placing order• information after purchase upon delivery

• Cooling off right• Right to return the goods without a reason

within 7/14 days• General terms & conditions

• applicability & providing a (digital) copy

A new regime for e-commerce in Europe

Information requirementsKey questions

1. Which information has to be provided? 2. How and where?

• open norms • further guidance in new regime

3. What if I don’t comply (penalties)?• primarily a question of national law• ‘autonomous’ sanctions of Directive(s)

A new regime for e-commerce in Europe

Time

‘browsing’ order process

after-sales

withdrawal‘landin

g’

Consumer action

Customer journey |information at different phases

delivery

Phase 1 Phase 2 Phase 3 Phase 4

ORDER

execution

A new regime for e-commerce in Europe

Right of withdrawal (cooling-off period)• consumer may return goods/services without

giving a reason• rationale: consumer has not seen goods/services

key business factor

A new regime for e-commerce in Europe

Fitting rooms re-visited

A new regime for e-commerce in Europe

Exercise of right of withdrawal• during 7 working days after delivery (will be 14

working days)• without having to state a reason• consumer only has to bear direct costs of

returning goods• exceptions

• made to specs • clearly personal in nature• Etc, etc.

• if consumer is not informed about right, extended to 3 months

A new regime for e-commerce in Europe

Consequences of withdrawal• ‘unwinding’ purchase• reimbursement of sales price within 30 days (will

be 14 days)• no additional costs may be charged• no liability for use beyond inspection yet (but:

new regime)

A new regime for e-commerce in Europe

#1 New notion – digital content• definition: data which are produced and supplied

in digital form • illustrations: computerprograms, apps, games,

music, videos contracts for the supply of digital content will thus also be subject to the e-commerce regime in the EU

• additional information requirements• functionality incl. technical protection

measures (e.g. DRM)• interoperability with hardware and software

a ‘shopping list’ of information

A new regime for e-commerce in Europe

#2 Proliferation of information provided• prior to conclusion of contract

• stricter requirements for contact details• inform consumer about obligations to bear

certain costs• reminder of legal rights of consumer• details of right of withdrawal• duration and termination of agreement• financial guarantees (e.g. deposits), etc.

A new regime for e-commerce in Europe

#3 Penalties for failure to comply• withdrawal period extended to 12 months if no

information provided on withdrawal• new penalties

• consumer does not have to bear certain costs anymore

• consumer is not liable for diminished value of goods

• consumer does not have to pay direct costs of returning goods

A new regime for e-commerce in Europe

#4 Information re conclusion of contract• how & where - certain information to be

provided:• ‘in a clear and prominent manner’ and

‘directly’ before placing the order• properties, total price, duration, conditions

termination, etc.• explicit acknowledgement by consumer of

payment obligation• specific instructions as to labeling of button

(!)• penalty: consumer not bound by contract/order• delivery restrictions & payment means at start

of order process

A new regime for e-commerce in Europe

#5 Right of withdrawal revisited• 7 working days to 14 calendar days (starting

point clearer)• how? - model instructions; online; also ‘in its

own words’• consumer pays only direct costs of returning

goods• consumer may be held liable for use beyond

inspection• NB: these obligations require prior information

of the consumer• exceptions [selection]

• digital content (if already started with explicit consent)

• hygene products, auctions, etc.

A new regime for e-commerce in Europe

#6 Executing the withdrawal• trader

• reimbursement of all payments received (incl. delivery costs)

• within 14 days after withdrawal• may withhold until consumer has returned the

goods (or provided proof)• consumer

• can be held liable for diminished value• has to return goods within 14 days

A new regime for e-commerce in Europe

#7 Other new consumer rightsboth for offline and online transactions• delivery within 30 days in consumer sales• consumer must not pay more than the basic rate

(telephone)• consumer pays only actual fees for use of

payment means• additional payments only valid if express

consent (no pre-ticked boxes)

A new regime for e-commerce in EuropeStill no comprehensive rules for cross-border transactions in the EU• patch-work character of EU Directives (sector/topic

specific)• different level of consumer protection due to

implementation measures or other national laws• varying degree of compliance due to different

national penalties and/or enforcement measures• consumer protection under Conflict of Laws• reality bites - traders go further than required

A new regime for e-commerce in Europe

Consumer protection overrules!• jurisdiction (EU Regulation 44/2001 - Brussels I)

• special regime for consumer contracts (art. 15)• if seller/service provider directs its activities to,

inter-alia, Member State of consumer and contract falls within these activities

• ECJ 7 December 2010 (Pammer/Reederei Schlüter and Hotel Alpenhof/Heller)

• applicable law (Rome I Regulation 593/2008)• restrictions on choice of law in B2C contracts

(art. 6)

A new regime for e-commerce in Europe

A uniform EU consumer sales & contract law• Draft Regulation on a Common European Sales

Law (2011)• so-called optional instrument• 186 (!) articles encompassing entire contract

law• idea: an autonomous regime for EU cross-border

consumer sales• applicability:

• Cross-border sales, supply of digital content & related services

• as a rule: only B2C transactions• requires opt-in by consumer (explicit consent,

trader’s initiative)• chosen in its entirety

Kennedy Van der LaanDr. Christoph Jeloschek

www.kvdl.nl @KennedyvdLaan

Questions?