BRUSSELS, BELGIUM - 22 OCTOBER 2009.  The European Commission released on 22 October 2009 its follow-up report to the March 2009 report on cross-border e-commerce in the EU (available here), which first showed how the gap between domestic and cross-border e-commerce is widening as a result of cross-border barriers to online trade.

The Commission\'s main finding is that cross-border, intra-EU e-commerce suffers from artificial barriers that prevent consumers taking advantage of significant opportunities. Such barriers mean that 60% of attempts to make a cross-border purchase online fail.

In this new report, the Commission quantifies significant consumer benefits from intra-EU, cross-border online commerce and concludes that the opportunities for consumer choice and price savings mean the EU must prioritise the removal of online trade barriers.

The “mystery-shopping” study was conducted as follows: “Testers located in 27 EU Member States were instructed to search for a list of 100 popular products on the Internet and to record the total price that they would have paid for the goods. When testers found a domestic and a cross-border offer, they compared the best domestic offer and the best cross-border offer for the product, all delivery charges and costs included. Then they checked the possibility of placing the order from across the border. In total, 10,964 individual cross-border tests were carried out.”

The key findings of this test were that cross-border shopping helps consumers find lower prices, that it gives them access to products that are unavailable domestically, and that most cross-border orders fail because the online market is fragmented.

The Communication on cross-border business-to-consumer e-commerce in the EU, which the Commission adopted simultaneously, presents a concrete strategy for tackling these regulatory barriers to cross-border online trade. It sets out the following 13-point list of priority actions, which eBay warmly welcomes:

1. End the fragmentation of consumer laws

2. Boost cross-border enforcement of consumer protection

3. Tackle unfair commercial practices

4. Promote alternative dispute resolution and cross-border small claims

5. Simplify VAT reporting for distance sellers

6. Reduce the administrative burden concerning electrical and electronic waste

7. Find practical solutions to managing copyright levies

8. Review rules on exclusive and selective distribution

9. End discrimination based on nationality or place of residence

10. Improve cross-border payment systems and logistics

11. Work with industry on the .eu domains and web searches

12. Strengthen market monitoring

13. Raise consumer awareness

European Commission press release here

European Commission FAQs here

European Commission Communication on Cross-Border Business to Consumer e-commerce in the EU here

Mystery shopping evaluation of cross-border e-commerce in the EU here