UK and EU parliaments back down over ecommerce legislation

Europe wide ecommerce legislation could be delayed for several months after both the European Commission and the UK government bowed to industry pressure to throw the proposed changes open to public comment.

Industry heavyweights, including Intel, IBM, Sun Microsystems, Lucent and BT, were amongst those meeting with European legislators at the Ecommerce and Jurisdiction Forum in Brussels yesterday.

The topic of debate was the forthcoming legislation, announced by the Commission in July, which would make Internet merchants subject to the different consumer protection laws in all 15 member states. (see Newswire 22 July)

A strident protest lobby, led by UK law firm Dibb Lupton Alsop, has forced a halt in proceedings, arguing that the proposed legislation would stifle the growth of ecommerce in Europe because having to comply with multiple sets of trading regulations would deter smaller companies from selling online.

In the UK, the Lord Chancellor's Department and the Department of Trade and Industry will pre-empt the Commission's November public hearings with its own series of seminars for interested parties a month earlier.

A DTI letter, sent this week to parties involved in the protest lobby, noted that, "it is recognised that the prospect of having to defend cases in a foreign court could deter some businesses from making the most of ecommerce."

"The Commission's decision to hold a hearing is welcome," the letter read. "This will be supplemented with a seminar of interested parties in October. This will ensure we have a full understanding of the views of business, consumer organisations and regulators before the negotiations begin."

The protest lobby has won support from the likes of the World Federation of Advertisers and the Union of Industrial and Employers' Confederations of Europe. (see earlier story)

Speaking at the forum, managing director of the World Federation of Advertisers, Bernhard Adriaensens, said having to tailor sales promotions campaigns to comply with 15 different sets of laws was a costly barrier to entry for companies.

"Advertisers can't work with the country of destination rule," Adriaensens said. "We want to go for the country of origin rule, otherwise there's no single market. Confidence in the seller is what will protect consumers, not laws."

Dibb Lupton Alsop lawyer Mike Pullen, who heads the protest lobby, said, "Country of origin law must be matched with quick and effective cross border jurisdiction."

But while industry heavyweights are applying heavy pressure on the UK and European administrations to amend the planned legislation, the consumer lobby is equally vociferous in its defence of the EU's original proposals.

Jim Murray, director of European consumers organisation BEUC, said efforts to deprive consumers of access to their own courts and the core protections of their own laws would mean "a return to the full force of Caveat Emptor and indeed the law of the jungle".

Consumers already bore a disproportionate risk in ecommerce transactions and it would be naïve to argue that the market could be regulated by the actions of suppliers that were keen to build confidence, Murray said.

The UK government has the power to veto EU legislation, but insiders believe it will not want to run the risk of appearing anti-consumer by doing so.

The protest lobby believes the UK will be far more willing to take action if backed by at least two other member states and are targeting Ireland, The Netherlands and Finland.

Other representatives included Marks & Spencer, Barclays Bank, the UK Post Office, Deutsche Bank and the Confederation of British Industry.