Addressing a roundtable on digital issues in London on Friday,
European Consumer Commissioner Meglena Kuneva said that while
e-commerce is succeeding at national level, cross-border e-commerce
is failing to keep pace. The European Commission believes that
simpler and better-harmonised consumer laws will boost the
sector.
The results of EU surveys among 26,000 consumers and 7,200
businesses were announced by Kuneva on Friday. They show that while
a third of the EU's 490 million consumers have bought something
online, only seven percent have bought from foreign suppliers. Of
those with web access at home, 56% have bought online; but only 13%
have made a cross-border purchase.
"These figures underline how much work we still have to do to
boost confidence in the online internal market," said Kuneva.
The surveys, conducted this year, also suggest that fewer
retailers are selling online. Fifty-one percent of EU retailers
sell via the internet – down from 57% in 2006. Retailers said that
only 17% of their e-commerce revenue stems from cross-border
sales.
Kuneva said that the Commission is working to remove regulatory
barriers to cross-border trade and is planning a new set of
consumer contract laws.
"This Autumn, the Commission will bring forward proposals for a
single framework consumer contract law for Europe's Internal
Market," she said. "Currently, we have a jungle of complex laws
which have evolved piecemeal over the last 20 years. The result in
practice is a maze of different rights and practices, from cooling
off periods to guarantees that are as unclear to consumers as they
are confusing for business."
Harmonising consumer laws
The main EU laws on e-commerce in force today are known as the
E-commerce Directive and the Distance Selling Directive. However,
each Directive gave member states some flexibility in their
implementation so national laws are inconsistent. For example, the
cancellation period for goods bought online is seven working days
in the UK and 14 days in Denmark. In addition, each member state
has national consumer laws that apply to all sales but vary widely.
A court in France is unlikely to let a UK website deny a French
consumer the protection of French consumer law.
"We have a patchwork of complex laws which have evolved
piecemeal over the last 20 years," said Kuneva. "The result in
practice is a maze of different rights and practices, from cooling
off periods to guarantees that are as unclear to consumers as they
are confusing for business."
"A single, simple set of core rights and obligations will make
it easier for consumers and business to buy and sell across
Europe," she said. "It will increase consumer confidence and bring
compliance costs down for business."
Kuneva also talked of unnecessary restrictions imposed by
suppliers to distribution over the internet. She said that "the
revision of the regulation on vertical restrictions under EU
competition law in the next couple of years is the right time to
reconsider the appropriateness of such internet restrictions."
"[We] cannot buy computers, train tickets or play-stations (sic)
freely across the EU," she said. "We are forced to buy domestic.
Let me be clear, there is no place in Europe's Single Market for
artificial geographical restrictions which hold consumers back
within national borders."
Kuneva called for the development of "price comparison sites
that compare prices of retailers in different European countries"
as a means of promoting online commerce. She also questioned the
value of the copyright levies imposed by some member states on
goods that can be used for copying digital goods. The Commission is
starting a process to "rationalise the system of copyright levies
in the EU," she said, so that levies are not an impediment to
trade.
Unfair commercial practices
New guidance was promised on the Unfair Commercial Practices
Directive, a law that took effect in the UK last month. Kuneva
cited "emerging practices against which the legislation still needs
to be tested."
"The use of pre-checked boxes for the purchases of costly
options is an example," she said. "We are all familiar with the
pre-checked insurance boxes while purchasing travel tickets online.
Trust me, there is a reason these boxes are pre-checked and it is
not customer convenience."
Kuneva continued: "We are also witnessing a worrying trend in
the blurring of commercial and non-commercial communication. It is
not always clear online when a published item is commercially
sponsored. A user might click on a link seemingly indicating user
generated beauty advice and land on a page that may or may not be a
promotional page and there is no way to tell."
"Viral ads that spread using individuals' social networks and
the nature of communications on social websites pose similar new
challenges. These developments are bound to challenge legislation
and the self-regulatory systems that mostly control advertisement
activities."
"I want a further effort to establish common guidelines on how
to implement the unfair commercial practices legislation with
regard to concrete new practices emerging online," she said.
Privacy
Kuneva expressed concern about the targeting of adverts in what
might be interpreted as a reference to recent controversy over
Phorm, an advertising technology firm.
"If you watch tennis over the internet, you will be targeted
with ads for tennis items. If you read about home improvement,
chances are that you will receive ads for repair services and new
furniture," she said. "But there are some concerns that the amounts
of personal data collected over the internet without the awareness
of users, let alone their consent, is getting too large and a bit
out of control."
"The European Data Protection Supervisor has stated that our
current legislation requires explicit consent each time personal
data is collected. The reality on internet is far removed from
these principles," she said.
Kuneva continued: "Currently many websites offer to click for
'enhanced services'. Is this an informed consent? How many people
actually know that this amounts to consent to having their
behaviour tracked, to have that data stored and then used
commercially? What would be fair terms in an agreement to allow
tracking? Publishers currently have privacy policies that allow the
installation of tracking devices that are not themselves covered by
their privacy policy. Is this a fair term? I believe that informed
consent is the central issue that consumer policy must next
address."
"I want to step up our work to develop core consumer principles
that feed into policy across sectors and technologies delivering a
more consistent approach the conditions surrounding tracking and
profiling," she said.
