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

A new regime for e-commerce in Europe

Outline 1.Introduction 2.What is e-commerce? - an EU lawyer’s perspective 3.Key legal issues 4.The new regime for e-commerce in Europe 5.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 requirements Key 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 ‘landing’ Consumer action Customer journey |information at different phases delivery Phase 1 Phase 2 Phase 3Phase 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 rights both 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 Europe Still 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/ 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 Laan Dr. Christoph Jeloschek Questions?