European Union: European Commission Proposes E-Commerce Package

On 25 May 2016, the European Commission (the "Commission") presented a three-pronged package aimed at promoting e-commerce across the EU. The package consists of three proposed Regulations (the "Proposed Regulations") that aim to advance three goals of the digital economy:

  • limiting discriminatory practices like geo-blocking (Proposal for a Regulation addressing geo-blocking and other forms of discrimination based on customers' nationality, place of residence or place of establishment within the internal market – the "Proposed Regulation on Geo-blocking and other forms of Discrimination");
  • making cross-border parcel delivery more affordable, transparent and efficient (Proposal for a Regulation on cross-border parcel delivery services – the "Proposed Regulation on Cross-border Parcel Delivery Services"); and
  • promoting customer trust through better protection and enforcement mechanisms (Proposal for a Regulation on cooperation between national authorities responsible for the enforcement of consumer protection laws – the "Proposed Regulation on Consumer Protection Cooperation").

The Proposed Regulations implement, in part, the Digital Single Market Strategy which the Commission adopted on 6 May 2015. They also follow the 2015 edition of the Commission's annual Consumer Conditions Scoreboard published on 21 September 2015 which focused on the Digital Single Market and consumer experience in cross-border e-commerce (See, VBB on Belgian Business Law, Volume 2015, No. 9, p. 9, available at www.vbb.com).

The overall objective of the Proposed Regulations is to allow consumers and companies to buy and sell products and services online more easily and confidently across the EU, thereby boosting e-commerce.

The Proposed Regulations' principal features are as follows.

Proposed Regulation on Geo-blocking and other forms of Discrimination

The Proposed Regulation on Geo-blocking and other forms of Discrimination seeks to ensure that consumers purchasing products and services in another EU Member State, be it online or in person, are not discriminated against in terms of access to prices or sales or payment conditions, unless this is objectively justified for reasons such as VAT or certain public interest legal provisions. It further defines specific situations where customers cannot be denied access to products and services solely for reasons relating to nationality, place of residence or place of establishment.

Geo-blocking refers to discriminatory practices where access to websites or certain products or services on websites are denied to a customer of a different nationality or with a different country of residence. The Proposed Regulation on Geo-blocking and other forms of Discrimination prohibits "re-routing" (i.e., the practice of redirecting customers to a country-specific version of a website) without the consumer's prior consent. The Regulation obviously does not impose an obligation on companies to deliver across the EU.

Proposed Regulation on Cross-border Parcel Delivery Services

The Proposed Regulation on Cross-border Parcel Delivery Services aims to increase price transparency and regulatory oversight of cross-border parcel delivery services so that consumers and retailers can benefit from affordable deliveries and convenient return options in cross-border parcel deliveries. According to the Commission, greater price transparency will foster competition.

Parcel delivery providers with 50 or more employees or who are active in more than one EU Member State would be required to send national postal regulators basic information about their operations (e.g., name, address) and annual updates on volumes, turnover and number of employees. This additional obligation applies only to those parcel delivery providers that do not already submit information to national postal regulators.

There is no cap on delivery prices. Price regulation would only be a means of last resort, should competition not bring satisfactory results. The Commission will assess progress made in 2019 and then decide if further measures are necessary.

Proposed Regulation on Consumer Protection Cooperation

The Proposed Regulation on Consumer Protection Cooperation amends Regulation 2006/2004 of 27 October 2004 "on cooperation between national authorities responsible for the enforcement of consumer protection laws" so as to strengthen national authorities' powers to enforce consumer rights. For example, the Commission, in cooperation with national authorities, will be able to check if websites geo-block consumers or offer after-sales conditions not respecting EU law (e.g., the consumer's right to withdraw from a contract). Authorities will also be able to order the immediate take-down of websites hosting scams. Furthermore, they will be entitled to request information from domain registrars and banks to detect the identity of the responsible trader.

The Proposed Regulation on Consumer Protection Cooperation streamlines administrative systems for the enforcement of existing consumer laws and simplifies the business environment, especially in the EU's Digital Single Market. Companies operating in all or a large majority of EU Member States will benefit from a one-stop-shop approach. The Commission hopes that the possibility to negotiate commitments at EU level will make it simpler, faster and cheaper for companies to resolve consumer issues.

Lastly, the Commission also published updated guidance on the application of Directive 2005/29/EC "concerning unfair business-to-consumer commercial practices in the internal market" in the digital world.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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