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European Commission ecommerce action plan

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European Commission ecommerce action plan

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The European Commission has published its action plan for doubling the volume of ecommerce by 2015.  The plan, part of the Commission's Digital Agenda, sets out a range of initiatives (some of which are already underway) aimed at improving:

  • The supply of cross-border online services
  • The availability of information for internet users and online traders
  • Payment and delivery systems
  • The resolution of cross-border disputes
  • Efficient use of high-speed communication networks and hi-tech solutions.

New initiatives for 2012 and beyond:

Cross-border services:  The Commission intends to issue guidance on provisions in the Services Directive (Recital 95 and Article 20) that prohibit service providers from discriminating on the basis of a customer's nationality or residence.  The prohibition applies to the service provider's publicly available general conditions, such as advertisements, promotional material or online terms and conditions.  If a service provider wants to apply different conditions, these must be objectively justifiable, for example, to reflect different market conditions, or the additional costs or risks of serving customers in different Member States. The Commission receives numerous complaints and queries from customers unable to buy services across national borders within the EU, but notes that there has been little enforcement action within Member States in this area.  The forthcoming guidance is intended to help Member States' national authorities apply the anti-discrimination rules.

E-signatures:  The Commission is concerned that lack of consumer and business confidence digital signatures is impeding their take up and that this in turn inhibits cross-border online commerce.  Electronic signatures would allow simple and secure identification that a sender of a document is authentically who they say they are, and general adoption may lead to significantly simpler transactions online.  In 2011 the Commission carried out a public consultation to see how consumer and business confidence in e-signatures might be increased and to inform the Commission's planned revision of the Electronic Signatures Directive.  The responses to the consultation indicate that the limited cross-border interoperability of e-signatures is a real concern.  The Commission says that it will propose legislation on the mutual recognition of e-identification and e-signatures in 2012.  

Cloud computing:  Following its 2011 public consultation on cloud services, in 2012 the Commission will adopt an EU wide strategy on cloud computing.  The strategy will cover the legal framework - data protection and privacy proposals already form part of the draft Data Protection Regulation released on 25 January - as well as technical and commercial issues such as security and availability of cloud services.  The Commission also plans to play a stronger role in the technical standardisation of APIs and data formats, as well as in the development of template contracts and service level agreements.  As part of the new strategy, the Commission plans to work with the public sector to develop common approaches to cloud computing.  To this end, the Commission announced on 26th January 2011 that it is inviting public authorities and industry to form a European Cloud Partnership focusing in particular on standards, security and "ensuring competition, not lock-in".  The Commission will fund the Partnership with an initial investment of 10 million Euros.  It remains to be seen how well the EU can regulate this rapidly evolving market, and while legal certainty around these key issues may well enhance the take-up of cloud services, over regulation may only place non-EU customers and providers in a more competitive position. 

VAT on ebooks: In a recent Communication on the Future of VAT, the Commission confirmed the principle that similar goods and services should be subject to the same VAT rate.  In light of this, the Commission announced in the action plan that it will table proposals to address the divergent VAT treatment of ebooks and books sold in other formats, such as in print or on CD Rom.  Under the European VAT Directive:

  • ebooks are subject to VAT at the standard rate
  • Member States have the option to apply a reduced rate to hard copy print books and to books supplied on a "physical means of support"
  • Some Member States, including the UK apply a zero rating to hard copy print books under a derogation available under Article 110 VAT Directive.

Following the Commission's communication, France and Luxembourg swiftly announced that they will apply reduced rates to ebooks from 2012, rather than wait for the Commission's proposals, due sometime before the end of 2013.  However, the UK has refused to follow suit. 

Cross-border disputes:  In November 2011, the Commission proposed new legislation to help consumers resolve disputes out-of-court; firstly, a new European Directive on alternative dispute resolution, and secondly, a Regulation on online out-of-court dispute resolution so that consumers can use an EU-wide single online platform to resolve disputes within 30 days.  In 2012, the Commission will turn its attention to B2B disputes and will issue proposals for online settlement.

Other initiatives planned for 2012 include proposals to create a European framework for "notice-and-take down" procedures for internet intermediaries, a commitment to develop a strategy for an integrated market for card, internet and mobile payments and plans to adopt a Communication on spectrum-sharing, including a strategy for the promotion of shared access to the spectrum in the single market.

For more information please contact Simon Briskman, Partner and David Naylor, Partner in the Technology and Outsourcing Group at Field Fisher Waterhouse LLP.

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