New European Rules to Boost e-commerce

On 25 May, the Commission unveiled three new draft regulations aimed at stimulating electronic commerce across the European Union.

Indeed, although online business is constantly growing, there are still a number of obstacles that prevent the Union from taking full advantage of the digital revolution and the digital economy from unleashing its full potential.

These draft regulations form part of the Commission’s ambitious strategy of creating a digital single market based on three pillars. The first pillar aims to improve access to digital goods and services throughout Europe for all consumers and businesses; the second pillar is intended to create an environment conducive to the development of networks and services; the purpose of the third and final pillar is to maximise the digital economy's growth potential.

The Commission began working on the first pillar back in December 2015, with the adoption of two draft directives directly related to the most common e-commerce contracts, namely contracts for online sales of goods and contracts for the supply of digital content (COM(2015) 634 and COM(2016) 635). These directives addressed the issue of the conformity of the goods sold or services provided and the compensation arrangements in the event of non-conformity.

It is too soon to discuss these texts which are still only proposals. Nevertheless, with regard to contracts for the supply of digital content, it should be noted that the directive may relate not just to content supplied in exchange for payment but also to that supplied in exchange for non-financial consideration. The directive aims to create a specific financial model whereby services are supplied in exchange for personal information, such as a name, email address or even a photograph. For this type of "contract", the supplier would also have specific obligations in terms of conformity.

The three draft regulations issued by the Commission in May 2016 further construction of the first pillar.

The first proposal (COM(2016) 289) targets the problem of geo-blocking which, according to the Commission, is discrimination based, directly or indirectly, on the consumer's nationality, place of residence or place of establishment. It aims to forbid professionals from preventing or restricting access by certain consumers to their websites or applying different general terms and conditions of sale depending on the customer's country or place of residence. Nevertheless, it should be noted that professionals will not be obliged to supply the entire European Union and will be free to refuse to supply goods outside the borders of their Member State.

By extension, another problem the Commission wishes to tackle is the cross-border delivery of parcels. Indeed, it considers e-commerce to be undermined by the sometimes high and often disparate prices for delivery services across the European Union. Therefore, the Commission’s second proposal (COM(2016) 285) aims to improve the transparency and regulatory oversight of prices. It does not go so far as to regulate delivery rates, however.

The third and final proposal (COM(2016) 283) concerns the enforcement of consumer rights in the context of e-commerce. The purpose of this regulation is to confer more powers on national authorities in order to improve respect for consumer rights. The idea is to strengthen consumer confidence through more rapid, flexible and coherent application of the consumer protection rules.

Other Commission proposals concerning copyright, the online transmission of audio-visual content, and VAT will follow soon, in order to complete the first pillar.

The texts currently under discussion are not yet final, and we all know that the final text can vary greatly from the initial proposal. In other words, there is still time to lobby the European Parliament in order to ensure that one’s voice is heard.