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Pan-European e-commerce compliance

A key challenge for any online content supplier branching out across Europe is to mitigate the risks arising from the myriad variations in local law. Rolling out the same terms across various EU countries may appear to be the easy answer, but this approach could expose the supplier to consumer claims in each region, enforcement action by local regulators, and increased liability.

November 2013

An important way for content suppliers to mitigate these risks is to ensure that robust, localised website terms (incorporating terms of supply) and privacy policy are made available to consumers on the website / via mobile app, and that sufficient information is provided at appropriate points during the user journey. This article provides some ‘top tips’ on how to achieve this.

Translate your terms

Making your terms of supply and privacy policy available in the local language is likely to be a local requirement, and even if not, it makes commercial sense for you to ensure that your content purchasers understand them.

Localise your terms of supply

BookIt Is dangerous to assume that simply translating terms will be sufficient.  Local legal advice should also be sought to ensure that your terms will work in all countries targeted, 'look right' to consumers, and enable you to mitigate your risks as far as possible in the relevant country.

While there has been some harmonisation across the EU in a number of areas such as e-commerce, consumer law and data protection, EU Directives are rarely implemented uniformly by the EU Member States, and other countries may impose more onerous requirements on suppliers than in the UK.  Suppliers also need to comply with common law, legal codes and requirements of local regulators, as well as other mandatory laws such as those relating to online and mobile payments.  

General contract law and the local implementation of EU consumer law varies from jurisdiction to jurisdiction, so there will be different approaches regarding the extent to which suppliers can limit their liability in consumer contracts. Get it wrong, and the whole liability clause could fall away, leaving you with unlimited liability. 

Distance selling legislation highlights the compliance challenge. While contracts entered into over the internet are regulated at the EU level, the relevant Directive has not been implemented uniformly across the EU.  For example, the right to cancel contracts made at a distance for goods and services (the so-called 'cooling off period') in the UK is currently 7 business days, but there are exceptions to this (for example in Denmark it is 14 days). 

A localisation of website terms can be done by drafting:

  • a different set of terms (within a different language site) for each country;
  • a set of terms with local differences set out at the end of the terms (e.g. with a list of special terms that apply only to French consumers etc.); or
  • a 'best of breed' set of terms that reflects the most onerous pan-European compliance requirements.

Localise your privacy policy

Data protection law is regulated at an EU level, so the baseline of individuals' rights and organisations' obligations will be similar across the EU.  However, variations in national law and requirements of local regulators mean that suppliers should have their privacy policies localised and the website / mobile app path checked. 

Privacy definitionEach local regulator is likely to require data controllers to register annually in respect of their data processing activities. Some regulators may have additional notification requirements (e.g. the requirement to lodge a data transfer agreement for intra-group data transfers in certain countries).     

Similarly, the way in which privacy policies must be presented to individuals differs across the EU. While in the UK it is acceptable to have a link to a privacy policy and a checkbox to demonstrate that the user has read and accepts it, other forms of consent may be required in other jurisdictions.

State which countries you do or don’t supply to

The safest practice for a content supplier is to comply with the mandatory laws of all countries that it is targeting, and exclude orders from countries it is not.

Either specify which countries you supply to or state your geographical restrictions on supply. Implement practical measures such as geo-filtering or pre-order approval processes to ensure that contracts can only be formed in certain territories.

Specify the governing law

Generally, contracting parties can choose the law that applies to their contract, but consumer contracts are an exception to this principle.  While a supplier can specify in business to consumer supply terms that the governing law of the country in which the supplier is based applies, it cannot exclude the mandatory laws of the country where the consumer is 'habitually resident'.  

So, if a UK supplier is supplying content to a consumer in France, it can either state that (a) French law governs, or (b) English law governs, subject to mandatory French law.

Specify the jurisdiction

The parties to a contract are generally free to choose the courts which are to have jurisdiction to settle any contractual disputes. Again, however, there is an exception in the case of consumer contracts. In Europe, consumers are likely to be entitled to sue a supplier either in the courts of their own country or the supplier’s. This rule cannot be contracted out of (e.g. by stating that the courts of the supplier’s country have exclusive jurisdiction).  

Get local advice about distance contract formation

The method of forming distance contracts with consumers varies between countries, so local advice should be obtained, as ignoring local law could mean that you don’t have a consumer contract in place. The typical UK check box, for example, may not be adequate in all countries.

Keep up to date

CalenderKeep up with changes in law and ensure that the terms of supply, privacy policy and operations are adjusted to reflect such changes. Ensure that local staff are responsible for ongoing compliance and/or use local law firms to assist.

For example, upcoming changes at a European level include:

  • the EU Consumer Rights Directive, which requires each Member State to change their consumer laws in order to improve consumer protection and greater harmonisation of e-commerce laws across the EU; and
  • the draft data protection Regulation that is likely to become uniform law across the EU in 2014 (see more information about the proposed changes).

If you have any questions on this article please contact us.

Louise Taylor

Louise Taylor

Louise Taylor looks at some of the e-commerce challenges of supplying content across EU borders.

"The method of forming distance contracts with consumers varies between countries, so local advice should be obtained, as ignoring local law could mean that you don’t have a consumer contract in place."