Watch out for new rules if you sell online

If you run an e-commerce business and sell goods online new EU rules could have a significant impact. The rules in question would be under a planned EU Consumer Rights Directive which concerns contracts for the sale of goods by businesses to consumers (B2C).

The draft Directive is not a new proposal – it was issued in 2008. Since then it has been going through various discussion and consultation processes, but recently it moved a step closer when endorsed by the European Parliament which added some important changes.

The aims of the proposed Directive as explained by the European Commission are laudable – harmonisation of relevant laws throughout Europe, rationalisation and updating of various laws which have grown up somewhat piecemeal over a long period of time and protection of the consumer to encourage and stimulate online trade. So far so good, but as is so often the case, the devil is in the detail.

Of the many provisions in the draft Directive, there are a couple of aspects in particular which could affect the viability of your business. Rather than being able to select where you sell as at present, you would have to make your goods available throughout the EU – currently 27 member states. You would also have to allow a 14-day ‘cooling off’ period within which consumers could return the goods and where those goods have a value over £35 you would have to pay the cost of returning them to you. Clearly the cost and administration of these changes will have an effect on all businesses selling to consumers online, but for smaller businesses currently struggling to survive it could be difficult to continue if they have to comply.

Eurochambres, an umbrella organisation of chambers of commerce whose members are largely SME businesses, hopes that the original approach, which was to cut legal costs for businesses wishing to sell cross-border, will prevail and that the recent vote will be overturned before the Directive becomes law which, if it happens, is scheduled for 2013. They have called for a new impact assessment to back up their view.

The Forum of Private Business is concerned that many small online businesses would not be able to cope with a requirement to sell in every EU country. Their chief executive stated: “Many independent online retailers only have the expertise and the infrastructure to sell to the domestic market, or to a select few overseas countries, and some have built themselves up around one particular product which they are only licensed to sell in a certain national market.” The Forum has also expressed concerns about potential problems with payment processing, fraud and the need to deal with a raft of local regulations in the various countries.

Vigorous lobbying on these issues is planned by the above organisations and others to which you may wish to add your voice. At the very least, keep an eye on developments, so that you can be prepared for whatever changes may eventually be introduced. In the meantime make sure you are ready to adapt. For further information on the draft Directive or for advice on any contract matters, contact Sue Mann on 0845 003 5639 or by email.

Sue Mann
Commercial solicitor

For free advice on this topic please call us on 0845 003 5639.