E-commerce Law Prompts Fears of E-tail Backlash

01 December 2000

European justice ministers yesterday rubber-stamped a ruling subjecting all e-tailers - regardless of their domicile - to the laws of the fifteen European Union member states. The decision has triggered alarm in some quarters that it may deter dotcoms from trading within the EU.

The ruling updates the so-called Brussels Regulation (which determines where disputes between consumers and foreign companies are settled) to include e-commerce, perhaps the most globalised of markets.

Essentially, the new law, which comes into force in March, means that EU customers who shop from a foreign website, even one outside the EU, can take that e-tailer to the national courts of their own country.

The EC welcomed the decision, saying it would protect the rights of internet consumers. However, a word of warning was sounded by British lawyer Mike Pullen, who argued for less restrictive regulations. He believes that e-commerce could be affected, with e-tailers unwilling to sell to customers in EU countries of whose laws they might fall foul.

“You're going to start seeing disclaimers like they have in the United States,” he said. “If I [am operating a business in France and] don't like certain aspects of Greek consumer law, I'm going to say we don't trade into Greece.”

Consumer groups are also troubled by the decision. Commented Machiel van der Velde of the European Consumers’ Organization: “It's not as specific as we'd like it to be”, adding that shopping online across borders should be the same as shopping offline locally.

News source: Wall Street Journal