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EU slowly wakes up & proposes some common rules for e-commerce

That’s a difficult issue to deal with and the European Union is slowly waking up. it was highest time as technology and globalism develop much quicker than Brussels clocks work. the magic work is: digital trading.  The EU tries to catch up after it realized that the cross-border e-commerce is a flop due to 1000+1 different and mostly national imposed regulations.

European Commission – Fact Sheet

Digital Contracts for Europe – Question & Answer

Brussels, 9 December 2015

What is the untapped potential of cross-border e-commerce in the EU?

Despite the rapid growth of e-commerce, most European businesses do not yet make the most of the Digital Single Market. The full potential of online sales is not yet well exploited in the EU: in 2014, the share of e-commerce in the total retail sector in Europe was 7.2%, while in the USA it reached 11.6%.

Only 12% of EU retailers sell online to consumers in other EU countries, while more than three times as many (37%) sell online in their own country.

  • Differences in national contract laws are a significant obstacle for cross-border sales for four out of ten EU retailers (39%) currently selling online. The additional one-off cost for businesses to adapt to different consumer contract laws when selling cross-border is around €9,000for each Member State they wish to sell to.
  • If the same rules for e-commerce applied across the EU,57% of EU businesses that are either active or interested in online cross-border trade would “definitely” or “to some extent” start or increase their online cross-border sales.

European consumers also miss out onthe potential of broader choice of products and better prices. Only 15% of EU consumers buy online from other EU countries,while almost three times as many (44%) buy online in their own country.

  • Low confidence plays a key role: only 38% of EU consumers feel confident buying online from another EU country.
  • Three out of ten consumers’ top concerns about buying online from other EU countries are related to key contract law rights, such asnon-delivery of their order, delivery of a wrong or damaged product, or repair and replacement of a faulty product.

At least 70 million consumers have experienced one or more problems with just four popular types of digital content (music, anti-virus, games and cloud storage) over the last 12 months. However, only 10% of consumers experiencing problems received remedies. As a result of those unresolved problems, consumers in the EU have suffered a financial and non-financial detriment estimated of about €9-11 billion.  

How do the Digital Contracts proposals fit into the Digital Single Market strategy?

The Digital Single Market Strategy adopted by the Commission on 6 May 2015 aims at using the potential of the digital economy for achieving more and stable growth for the EU.

The 16 actions announced in the Strategy are designed to work together, to address bottlenecks hampering the achievement of a truly integrated market. Together with the online content portability proposal also adopted today, the proposals on Digital Contracts are the first deliverables under the Strategy. They aim to bring down the remaining contract law barriers and to unleash the untapped potential of cross-border e-commerce in the EU.

What are the problems addressed by the Digital Contracts proposals?

Differences in consumer contract law rules have been identified by stakeholders consulted to prepare the Directives, including businesses and consumer associations, as a significant barrier to cross-border trade.

For digital content, there is a clear gap in the EU legislation, while most Member States do not have any specific national legislation. In some Member States, the supply of digital content may be governed by the rules of sales, in others by the rules on services or rentals. As a result, remedies for defective digital content differ. This creates legal uncertainty both for businesses and consumers. Only a few Member States have recently enacted or started to work on specific legislation on contracts for the supply of digital content. This risks causing more legal fragmentation if no action is taken at EU level.

For goods, and in particular regarding consumer rights in case a good is defective, there are only minimum EU requirements in place. As a result, in practice there are still different national laws. This situation creates legal uncertainty, imposes additional costs for businesses and affects consumers’ confidence in cross-border shopping. 

What solution is the European Commission proposing?

The Commission is proposing two Directives: one for digital content and another for goods. Together they will ensure that the same key contract law rules apply across the EU for online purchases of goods and the supply of digital content. 

How will these Directives improve the life of consumers in the EU?

Consumers will have access to offers from more traders across the EU and will therefore benefit from a wider choice of products, at more competitive prices.

Consumers will have specific rights with a high level of protection when accessing digital content and buying goods online. For digital content, the rules will apply when consumers pay for their content with money or if they give their data to access the content (e.g. by registering to an online service/ social media).This will be relevant for a big share of EU consumers:during the last 12 months, the share of EU internet users who downloaded or accessed digital content without paying with money reached 82% for sport events, 80% for audio-visual content (films, series, video clips, TV content), 77% for music, 76% for games and 64% for e-books.

Digital content:

  • Supplier’s liability for defects: If the digital content is defective, the consumer can ask for a remedy. There will be no time limit to the supplier’s liability for such defects, because -unlike goods- digital content is not subject to wear and tear.
  • Reversal of burden of proof: If the digital content is defective, it will not be up to the consumer to prove that the defect existed at the time of supply, but rather for the supplier to prove that this is not the case. This is important considering the technical nature of digital content where it can be especially difficult for consumers to prove the cause of a problem.
  • Right to end a contract: Consumers will have the right to terminate long-term contracts, and contracts to which the supplier makes major changes.
  • Contract established in exchange for data:If the consumer has obtained a digital content or service, in exchange for personal data, the new rules clarify that the supplier should stop using them in case the contract is ended.


  • Reversal of the burden of proof for two years: In the EU, it is already the case that for a certain period of time a consumer asking for a remedy for a defective product does not have to prove that the defect existed at the time of delivery; it is up to the seller to prove the opposite. Currently, the time period during which the seller has this burden of proof varies by Member State; now it will be extended to two years throughout the EU.
  • No notification duty: Consumers will not lose their rights if they do not inform the seller of a defect within a certain period of time, as is currently the case in some Member States.
  • Minor defects: If the seller is unable or fails to repair or replace a defective product, consumers will have the right to terminate the contract and be reimbursed also in cases of minor defects.
  • Second-hand goods: For second-hand goods purchased online, consumers will now have the possibility to exercise their rights within a two-year period, as is the case with new goods, instead of the one-year period that currently applies in some Member States.

How will these Directives improve life for businesses in the EU?

Businesses will be able to supply digital content and sell goods online to consumers throughout the EU, based on the same set of contract law rules. This will increase legal certainty and create a business friendly environment.

When supplying digital content, businesses will avoid the cost of legal fragmentation which is emerging due to the lack of EU wide rules and the fact that some Member States are starting to put into place specific national legislations. When selling goods, businesses will save the costs of adapting to the contract law rules of every Member State they wish to sell in.

Common rules across the EU will reduce contract law-related consumer concerns. More consumers will be encouraged to start buying online from other EU countries, thus creating a market of up to 70 million online cross-border buyers. This will open up new markets and will be particularly beneficial for small and medium enterprises (SMEs), who need to build their customer-base and often need to go beyond their home market. (full article here)

Of course, the EU goes again the easy way and is unable to address simple and most important problems like the high transportation cost that hinder and will hinder online sellers to sell within the EU also in the future.

Friends of mine were set to open an e-shop with original Greek products with their targeted customers being outside Greece. They found out, that the prices of private transport companies had to be some 50-60% higher in order to avoid competition to the Greek Post.
No competition, no trade? They are still considering their idea. Why should a consumer buy a jar of honey from Greece if he can find it in online stores in his country? On the other hand, many young aspiring entrepreneurs see a way out of their unemployment in creation of e-shops. Only, that the Greek market is small, their local customers suffers from the economic crisis and their potential clients sit in other EU countries. Not to mention the USA.
PS I think, there is also an issue with the different V.A.T. rates the seller has to calculate depending on the geographical position of the client.

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One comment

  1. Giaourti Giaourtaki

    The problem is not too high shipping costs but too low, in the most Americanized country in Europe, Germoney.
    Due to their into freelancing “business” outsourced millions of delivery heroes who will never see any pension or have a wrecked back after 15 years nobody will pay for and end up, if lucky, on welfare. German companies are “competitive” enough to deliver Europe-wide up to 25 kilos for 5 Euros, while Spanish, Italian, Greek and French companies have to charge 15, 25 or 40 and some of the European masters deliver even world-wide up to 2 kilos for 5 Euros, so that even US-companies hate them as the US postal service had to charge more and more the last years.
    To call that too high will end up in slaving for German companies.
    There is an existing German-Greek transport network because many German companies since years refuse to deliver to Greece, may be it works the other way round also… (air-cargo?)