The European Commission presented its new package on boosting e-commerce in the EU to the European Parliament’s Committee on the Internal Market and Consumer Affairs (IMCO) on 14 June. The geoblocking and parcel delivery proposals were hot topics during the discussions with Members of the European Parliament (MEPs) and representatives from the European Commission.
Applicable law as main concern concerning the geoblocking dossier
The European Commission’s “shop like a local” concept established in the geoblocking legislative proposal proved to be the most pressing issue for the Committee’s Members. While online merchants are basically obliged to sell to any consumer in the EU under the new proposal, they do not have to deliver everywhere in the EU. To the concern of some MEPs and the e-commerce sector, this obligation to sell but not to deliver leaves both online retailers and consumers with legal uncertainty about the applicable law (“Rome I Regulation issue”) in this kind of transactions.
Under the new proposal, the Commission declared that the applicable law, also for consumer protection, will be depending on whether a retailer is actively selling to a consumer’s country (active sale) or whether a consumer purchases a good and/or service from a country not directly targeted by the merchant (passive sales). The Commission’s idea is that when traders are obliged to sell to consumers established in a market/country that they do not actively target, this should be treated as a passive sale. Then, in this case, the law of the country of the trader would be applicable.
Several MEPs such as Vicky Ford (ECR, UK) and Virginie Rozière (S&D, FR) displayed strong objections to the Commission’s plans focusing on the added confusion and excessive administrative burdens put on SMEs by being ‘forced’ to trade to all EU Member States. Furthermore, MEP Roza Thun (EPP, PL) and Julia Reda (Greens, DE) raised concerns regarding the proposal’s limited scope, objective criteria and relation to the new proposals on digital contract rules.
Ecommerce Europe noticed that the Commission made some efforts in clarifying which law is applicable in the cases covered by the geoblocking proposals, but asks EU policy makers for further fine tuning of the provisions to prevent legal uncertainty for both online merchants and consumers. Besides that, Ecommerce Europe still believes that the most effective way to prevent merchants from geoblocking is to accelerate the full harmonization of the EU’s Single Market. Imposing an obligation to sell to everyone, but not to deliver everywhere, must always lead to the application of the laws and rules of the country of the trader, and potential negative effects on consumers must be taken into account (i.e. products not fit for their markets).
Parcel delivery: Increase price price transparency and tackle unfair international competition
In its 25 May eCommerce Package, the European Commission acknowledges the importance of the parcel delivery market to boosting cross-border e-commerce in Europe. The excessive and high costs incurred by online merchants as a result of the fragmented parcel delivery market marks a significant barrier to the growth of online cross-border trade in Europe. In its newly released policy proposal, the Commission aims to make cross-border parcel delivery more affordable and efficient through increasing transparency and regulatory oversight.
During the Commission’s presentation of the package to Parliament’s IMCO Committee, MEPs stressed the need for a stronger European approach to increasing price transparency to boost the e-commerce sector. In response to the Commission’s proposal to require parcel service providers to submit information about affordability and cost-orientation of prices to national regulators, Lucy Anderson (S&D, UK) argued for greater information gathering to assess market trends and directions. Furthermore, she argued for a more pronounced and active Commission role in the regulation of the parcel delivery sector.
In addition, MEP Vicky Ford asked Commission representatives to address sector concerns about Universal Postal Union terminal dues under which developing countries such as China benefit from unfair trading standards allowing them to send Packets to European customers for a fraction of the costs incurred by European parcel delivery services.
Ecommerce Europe welcomes the Commission’s regulatory proposal on parcel delivery and recognizes it has the potential to help create a level playing field for competing postal-, courier- and express operators and thereby in the end for online merchants throughout Europe. Ecommerce Europe expresses support for the Commission’s cautious approach which leaves room for case-by-case assessment by national authorities but will continue its work with service providers and policy makers to ensure progress towards a global level playing field accessible to all players through the use of open information- and label standards.
For a detailed overview of Ecommerce Europe’s recommendations on these issues, please click here to read the position paper