This is even truer of the online market, where cross-border transactions are hampered by 27 divergent sets of consumer rules (see our section on consumer protection rules here) and by outdated selective distribution law (see eBay's press release here; see eBay response to the European Commission's Public Consultation on the review of the EU Block Exemption Regulation and Guidelines on vertical restraints here; see section on Consumer Choice here).
Even though the EU e-commerce Directive - the most important piece of EU legislation to regulate e-commerce in the EU - allowed e-commerce to take off at the beginning of the 21st Century, it is clear that the growth of online business has been held back by various regulatory barriers. The European Commission's "post-i2010" strategy provides EU policymakers with an opportunity to address these issues by breaking down remaining barriers to e-commerce and to foster a truly integrated online EU Internal Market.
The EU Ecommerce Directive
The e-commerce Directive (ECD) was adopted in 2000. It ensures that Information Society Service Providers benefit from the Internal Market principles of free movement of services and freedom of establishment.
The ECD is the most important piece of EU legislation to regulate the e-commerce business. It allowed e-commerce in the EU to take off by creating legal certainty for providing cross border online services, without having to comply with 27 different sets of national legislation. Other provisions of the ECD include market access, information requirements, commercial communications and liability of intermediaries.
eBay continues to underline that the ECD has brought very positive results for e-commerce in the EU and that the core principles of this legislation must be maintained, to drive forward the digital economy.
Existing Barriers to Cross-border Ecommerce
Cross-border online shopping increases consumer choice and, as studies continue to demonstrate, enables shoppers to make savings. The European Commission's Directorate-General for Consumers has authored recent reports that, whilst painting a sobering picture of the extent to which consumers are denied the opportunities to benefit from cross-border e-commerce, include welcome action plans to remove barriers and deliver positive results for online businesses and consumers.
In a March 2009 report on cross-border e-commerce in the EU (available here), the European Commission shows how the gap between domestic and cross-border e-commerce is widening as a result of cross-border barriers to online trade. The European Commission's follow-up report, published in October 2009, quantifies the savings European Consumers can make when shopping cross-border online, which illustrates why it is important to increase efforts to combat unnecessary barriers.
Whereas language difficulties are often presented as a practical barrier to trade, the European Commission studies show that many consumers and traders are happy to carry out transactions in other languages. As much as this and other practical barriers do exist, the European Commission finds that legislative barriers are numerous. Some of the most important deserve specific attention.
The continued existence of 27 diverse consumer protection regimes is a major barrier to the full potential of distance and electronic commerce in Europe. eBay shares the European Commission's view that a revision of the current consumer protection laws is required to rectify this unsatisfactory situation. The introduction of a single set of rules across the 27 EU Member States, based on full harmonisation, will unlock the full potential of the fledgling EU retail market (see more here).
Some businesses' abuse of rules on vertical restraints is another of the major obstacles to cross-border e-commerce. eBay firmly believes that permitted restrictions on how products are sold must not be used to discriminate against online channels, as a tool to reduce competition and keep prices high. For many EU citizens, cross-border online shopping is the only way to buy some products and allowing businesses to discriminate against online sales raises barriers to the internal market that consumers and most forward-looking businesses want to take advantage of. (See the section on Consumer Choice here / Find out more about eBay's position on the consultation on the European Commission review of the Vertical Restraints guidelines here).
In its most recent report, the European Commission has set out a 13-point list of priority actions, which eBay warmly welcomes:
- End the fragmentation of consumer laws
- Boost cross-border enforcement of consumer protection
- Tackle unfair commercial practices
- Promote alternative dispute resolution and cross-border small claims
- Simplify VAT reporting for distance sellers
- Reduce the administrative burden concerning electrical and electronic waste
- Find practical solutions to managing copyright levies
- Review rules on exclusive and selective distribution
- End discrimination based on nationality or place of residence
- Improve cross-border payment systems and logistics
- Work with industry on the .eu domains and web searches
- Strengthen market monitoring
- Raise consumer awareness
For more information on the European Commission's work on barriers to cross-border e-commerce in the EU, see here for its October 2009 report.
The "i2010 - A European Information Society for growth and employment" initiative was launched by the Commission on 1 June 2005 as a framework for addressing the main challenges and developments in the information society and media sectors for the period up to 2010.
As the i2010 strategy draws to a close this year, the European Commission is currently preparing a new strategy for 2010-2015, provisionally called "post-i2010".
The European Commission's Digital Competitiveness report (available here) indicates the European Commission's i2010 strategy (2005-2010) delivered on a range of concrete issues in terms of stimulating competition and empowering consumers. However, less progress has been made in the area of e-commerce.
eBay views the current "post-i2010" consultation as a significant opportunity to recognise e-commerce as a key 21st Century marketplace. Online channels enable businesses to access new markets by providing innovative, high-quality and consumer-friendly services across the European Union. They also empower consumers with a convenient, transparent way of accessing unparalleled choice and information. The benefits for competition, the EU internal market and European consumers explain why EU policymakers repeatedly emphasize the need to foster e-commerce.
eBay has consistently been calling on European Union leaders and policy-makers to look into the current regulatory framework on distribution agreements and consumer provisions, to ensure they are fully up to date with the 21st Century Market and promote consumer benefits as well as empower SMEs. Only then will it be possible for a truly integrated Internal Online Market to emerge, hence bringing about a positive and potentially massive impact on jobs and growth.
eBay therefore supports the consultation launched by the European Commission to invite interested stakeholders to submit their views on how best to promote the digital society. This exercise should lead to a new robust and comprehensive strategy for the European Information Society for the 2010-2015 period, which will allow the European economy to maintain its leading position on these issues.