E-commerce in Europe: consultations, court rulings, and other updates in September

With contributions from Barbara Rosen Jacobson, Roxana Radu, Marília Maciel, Sorina Teleanu, and Stephanie Borg Psaila

The last few weeks were a vibrant period for e-commerce. New initiatives have flourished on a global and national level; in this blog post, we cover some of the latest developments at European Union level.

The European Commission presented two sets of findings, following consultations and inquiries. The first involved consultations with around 23,500 consumers and 375 firms to assess the effectiveness of the EU directive on consumer sales and guarantees (Directive 1999/44/EC on certain aspects of the sale of consumer goods and associated guarantees). The main question of the consultations – carried out as part of the Regulatory Fitness and Performance Programme (REFIT) – was whether the scope of the Commission’s proposal for a directive on contracts for the online and other distance sales of goods should be extended to cover all sales (including face-to-face sales). The preliminary findings reveal that 46% of online retailers consider differences in legal rules a major barrier to operating across borders. The European Commission is expected to present the full study by the end of September. 

The Commission also published a preliminary report on the findings of its inquiry into e-commerce. Gathering data from almost 1,800 e-commerce companies in Europe and analysing 8,000 distribution contracts, the report found that over 40% of retailers face some form of price recommendation or price restriction from manufacturers, and that almost 205 of retailers are contractually restricted from selling in online marketplaces. Also, almost one in ten retailers are contractually restricted from submitting offers to price-comparison websites and over 10% of retailers report that their suppliers impose contractual restrictions on cross-border sales.

On 15 September, the European Parliament adopted a report on the application of the Postal Services Directive. The report tackles aspects related to parcel delivery in the context of the continuous growth of e-commerce. The European Commission has also presented a Proposal for a Regulation on Cross-border Parcel Delivery Services, a core component of the EU strategy to stimulate cross-border e-commerce. Global e-commerce streams are revolutionising shopping, but the current parcel streams are not fit to accommodate this. Almost one in five EU citizens identifies cheaper delivery prices as the main improvement that would encourage more online shopping from sellers located cross-border in the EU. Similarly, more than a third of online merchants view higher costs of cross-border delivery compared to domestic delivery as an obstacle when selling online abroad.

With regard to case law, one important e-commerce judgement in September involved intermediary liability and the infringement of intellectual property rights. The Court of Justice of the European Union ruled that operators of websites linking to materials that infringe copyright can be found guilty of copyright infringement, if the operators knew or could reasonably have known that the material was infringing. Moreover, the ruling said that the operators would be presumed to know about the infringements if the links are provided for ‘the pursuit of financial gain’. The specific case concerned the publisher of the Dutch edition of Playboy, who filed a case against a Dutch website that had published a cut-out from one of the pictures and linked to a file storage site, where the pictures had been published without Playboy‘s consent. Some activists now argue that the ruling infringes on Internet freedoms, and that sites should not be responsible for the content of the links they refer to. The case could have broader consequences on the ways in which digital publishers operate.

In another case, the Court of Justice of the European Union ruled that a business offering free Wi-Fi to customers cannot be held liable for copyright infringements by users. This follows an earlier advice issued by the Advocate General. The case concerned a dispute between the manager of a sound-system shop and Sony’s German branch, after music was illegally offered for downloading via the shop’s Wi-Fi network. The court ruled that the service provider cannot be held liable as long as they did not initiate the offending data transmission, select its recipient, or select or modify the information in that transmission.

Finally, it is also worth mentioning the complaint lodged by the European Holiday Home Association – which also represents rental and travel online platforms AirBnB and Tripadvisor – with the European Commission regarding ‘excessive and contradictory local rules stifling’ the collaborative economy. The association believes that the restrictions infringe the EU’s fundamental freedom to provide services across Europe.

E-commerce issues are being discussed at the annual WTO Public Forum (27–29 September) in Geneva. Follow the latest updates and session reports prepared by DiploFoundation and the Geneva Internet Platform.