Rome II applies only to non-contractual disputes, such as cases of defamation, liability for defective products and unfair competition, including advertising and marketing. It has been subject to severe criticism since consultation began on the proposed Regulation in spring 2002.
Critics, including the UK government and major organisations, have expressed doubts about the need for the measure at all. They argue that the draft Regulation is not justified under principles in the EC Treaty that require that any legislative action of the Community should not go beyond what is necessary to achieve the proper function of the internal market.
Others have called for a redrafting of parts of the Regulation, especially those concerning defamation and intellectual property.
The ICC's Task Force on Jurisdiction and Applicable Law in E-Commerce, sent a request to the Commission in March this year, asking that Rome II be re-evaluated.
Its main concern was that:
"The E-Commerce Directive addresses a number of issues such as electronic contracting, web advertising, and the potential liability of technical intermediaries (such as telecommunication companies, web hosting companies and internet access providers) involved in the implementation of the internet. As the Rome II Regulation could serve as an international precedent, it is important to businesses and consumers worldwide that its provisions promote the development of electronic commerce."
The conflict between the two measures comes down to a question of which Member State's law will apply in any cross border dispute. In general terms, according to the Directive, the law of the member state in which a service provider is physically situated will be the one applicable.
This is the "country of origin" principle, albeit the Directive contains important exceptions to the principle, most notably when dealing with consumer contracts.
Under Rome II, the general position is that the law of the country in which the harm occurred will be the applicable one.
The ICC described this as "contrary to the spirit, if not the letter, of the E-Commerce
Directive". The worry is that a claim by a foreign third party against an EU internet company will result in the application of the law of that foreign state.
Consequently, the ICC has called for the Regulation to be redrafted to include the "country of origin" principle.
The Commission has rejected the ICC's view. In correspondence sent to the ICC on 15th May, Mario Tenreiro, head of the Commission's Judicial Cooperation in Civil Matters Unit, reasons that the relevant article of the draft Regulation "does clearly guaranty [sic] that the future Rome II instrument will not affect the so-called 'country of origin principle' contained in the E-Commerce Directive."
According to the ICC, the Commission is due to submit a revised draft of the Regulation to the European Council at the end of this month. But its recent letter implies that the contentious article will not be redrafted.