Online traders must comply with new EU ODR requirements
As part of a European Union (EU) drive to encourage the use of Alternative Dispute Resolution (ADR) in consumer disputes, the European Commission has developed a new Online Dispute Resolution (ODR) platform, which has been available for use by traders and consumers since 15 February 2016.
The launch of the platform means that online traders must now comply with certain requirements contained in the EU Regulation on Consumer ODR (“ODR Regulation”). In the UK these requirements are also reflected in the Alternative Dispute Resolution for Consumer Disputes (Competent Authorities and Information) Regulations 2015 (as amended).
The launch of the platform was originally due to take place on 9 January 2016, but was postponed by several weeks as a number of Member States were not ready for the original launch date. However, it appears that some Member States have also missed the revised deadline – a disclaimer notes that ADR bodies are still not available via the ODR platform in Croatia, Germany, Lithuania, Luxembourg, Malta, Poland, Romania, Slovenia and Spain (as at 1 March 2016).
What is the ODR platform?
The ODR platform allows consumers, online traders and ADR providers to file, respond to and handle disputes online. The platform can only be used if the consumer and trader are based in the EU and the dispute relates to a product or service the consumer has bought online. It is important to highlight that the trader and consumer do not need to be based within the same EU country. Indeed, the primary purpose of the ODR platform is to facilitate the resolution of cross-border disputes and it even offers a translation function to assist with this.
The ODR platform accepts complaints from consumers via an electronic complaint form. When a consumer files a dispute through the ODR platform, the platform will identify one or more suitable ADR providers and notify the trader. If the trader and a relevant ADR provider agree to it, and the consumer is happy to proceed, then ADR will go ahead. In some cases the trader will have to accept ADR because of a legal requirement, trade association membership rules or a contractual obligation. The ADR provider can only refuse to handle a dispute on certain, limited grounds (e.g. because the claim is frivolous or vexatious or falls outside the minimum or maximum value of claim that the provider handles).
In some countries the ODR platform can also be used by traders that want to complain about a consumer over a good or service the trader sold to them online.
What is an online trader for the purposes of the ODR Regulation?
An online trader is defined very widely in the ODR Regulation as a trader that intends to enter into online sales contracts or online service contracts with consumers. This covers scenarios where traders offers goods or services on a website or by other electronic means and consumers can order them on that website or by other electronic means. “Other electronic means” includes mediums such as telephone, e-mail, social media and text message. Clearly the definition catches online traders selling products or services to consumers via retail websites and apps, including omnichannel businesses that operate offline as well as online.
What are the new rules that online traders must comply with?
All online traders must now provide a link to the ODR platform on their websites. In addition, online traders must also provide an e-mail address on their websites. Note that an online contact form that does not show an e-mail address is not enough to meet this requirement.
The link to the ODR platform must be easily accessible for consumers – an ideal location might be alongside existing information on the trader’s complaints handling procedures.
Further requirements apply if a trader is required to use an approved ADR provider – whether by law, trade association membership or by contract – in the event of a dispute with a consumer. In such cases the trader must inform consumers about the existence of the ODR platform and the possibility of using it to resolve disputes. This information must also be provided in the general terms and conditions applicable to online sales and/or services contracts (if any). Offers of products or services made to a consumer via e-mail must also include a link to the ODR platform. Note that complying with these information requirements should not result in the replacement of any information traders are obligated to give (or voluntarily provide) about ADR providers they use, but rather sit alongside it.
What about online marketplaces?
Online marketplaces – websites which facilitate transactions between traders and consumers rather than selling products direct to consumers – must also provide a link to the ODR platform on their websites. Examples of online marketplaces include online auction websites and online retailers that allow third party sellers to trade through their website (e.g. eBay).
What should businesses do?
Businesses that meet the definition of an online trader should clearly check their websites and potentially their e-mails and general terms and conditions of sale or supply for compliance with the new ODR requirements.
More generally, there have been several key developments in EU consumer law in the last couple of years, such as the coming into force of the Consumer Rights Directive in 2014 and the implementation of new rules on ADR in 2015. In the UK we also witnessed the introduction of the Consumer Rights Act back in October (see my previous publication for further details). Businesses that have not reviewed their websites and general terms and conditions of sale or supply in light of these changes should consider a more detailed review of their compliance with consumer law.
Click here for further information on consumer ADR and ODR.