June 6, 2016

The European Commission has tabled a package of measures to allow consumers and companies to buy and sell products and services online more easily and confidently across the EU.

As part of its Digital Single Market Strategy, the Commission has presented a three-pronged plan to boost e-commerce by tackling geoblocking, making cross-border parcel delivery more affordable and efficient, and promoting customer trust through better protection and enforcement.

The e-commerce package is composed of:

• legislation to address unjustified geoblocking and other forms of discrimination on the grounds of nationality, residence or establishment;
• legislation on cross-border parcel delivery services to increase the transparency of prices and improve regulatory oversight; and
• legislation to strengthen the enforcement of consumers’ rights, and guidance to clarify what qualifies as an unfair commercial practice in the digital world.

In terms of preventing geoblocking, the Commission is proposing a Regulation to ensure that consumers seeking to buy products and services in another EU country, be it online or in person, are not discriminated against in terms of access to prices, sales or payment conditions, unless it is objectively justified for reasons such as VAT or certain public interest legal provisions.

To avoid introducing a disproportionate burden on businesses, the Regulation does not impose an obligation to deliver across the EU and exempts small businesses that fall under a national VAT threshold from certain provisions.

As for cross-border parcel delivery, the Commission is proposing a Regulation that will 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, even to and from peripheral regions.

The Commission is not proposing a cap on delivery prices, however.  Price regulation is “a means of last resort”, the Commission says, where competition does not bring satisfactory results.  The Commission will take stock of progress made in 2019 and assess if further measures are necessary.

In terms of increasing consumer trust in e-commerce, the proposed revision of the Consumer Protection Cooperation Regulation will give more powers to national authorities to enforce consumer rights better.  They will be able to:

• check if websites geo-block consumers or offer after-sales conditions not respecting EU rules (e.g. withdrawal rights);
• order the immediate take-down of websites hosting scams; and
• request information from domain registrars and banks to detect the identity of the trader responsible.

In the case of EU-wide breaches of consumer rights, the Commission will be able to coordinate action with national enforcement authorities to stop these practices.

The Commission is also publishing updated guidance on the Unfair Commercial Practices Directive (2005/29/EC) to respond to the challenges presented by the digital world.  The guidance states, for example, that any online platform that qualifies as a “trader” and promotes or sells goods, services or digital content to consumers must make sure that its commercial practices fully comply with EU consumer law.  Platforms must state clearly that rules on unfair commercial practices do not apply to private persons selling goods, and search engines must clearly distinguish paid placements from natural search results.

The revised guidance also incorporates two sets of self-regulatory principles that have been agreed amongst stakeholders: the first is to support comparison tools to comply better with the Directive, and the second is to help the enforcement of unfair commercial practices rules against misleading and unfounded environmental claims.  To read the Commission’s press release in full and for links to the proposed legislation and guidance, click here.