Indian Supreme Court aligns with international arbitration law in enforcing foreign award
Out-Law News | 30 Oct 2008 | 6:46 pm | 6 min. read
The European Union's E-commerce Directive orders companies to publish certain information about themselves on their websites. The measures are intended to protect consumers and apply to almost all commercial websites, not just those that take payments.
Companies must include an email address and a geographic address on their website. The ECJ has ruled, though, that something else is required. That could be the provision of a telephone number but it does not have to be. They have to provide some other way for a consumer to communicate with the company in a direct and effective manner.
The ECJ has ruled that a web form filled in by a consumer and responded to by the company via email was acceptable in a case where the company answered queries within 30 to 60 minutes. It stopped short of suggesting that all companies should respond to web form queries within 60 minutes.
The German Federation of Consumers' Associations (Bundesverband) took a court case to try to force online insurance seller deutsche internet versicherung (DIV) to publish its telephone number on its website.
DIV did give policy buyers the phone number, but only after the conclusion of a contract.
While a German court agreed with the Bundesverband, DIV won its case on appeal. The Bundesverband brought an appeal on a point of law, and the ECJ was asked to clarify the meaning of the Directive.
Article 5(1) of the E-Commerce Directive says that companies:
"shall render easily, directly and permanently accessible to the recipients of the service and competent authorities, at least the following information:
(a) the name of the service provider;
(b) the geographic address at which the service provider is established;
(c) the details of the service provider, including his electronic mail address, which allow him to be contacted rapidly and communicated with in a direct and effective manner".
The ECJ was asked to decide whether this part of the Directive meant that anything more than an email and postal address was necessary and, if so, whether the additional method of communication had to be a telephone number.
The ECJ said that another means of communication did have to be offered. "It is clear from all those considerations that under Article 5(1)(c) of the Directive the service provider is required to offer recipients of the service a rapid, direct and effective means of communication in addition to his electronic mail address," it said.
It found that though that means of communication could be a phone number, it did not have to be.
"It is clear that there are forms of communication other than by telephone able to satisfy the criteria of direct and effective communication referred to," said the ruling. "[The] information does not necessarily have to be a telephone number. That information may be in the form of an electronic enquiry template through which the recipients of the service can contact the service provider via the internet, to whom the service provider replies by electronic mail."
The ECJ said, though, that the E-commerce Directive was intended to promote, not restrict, electronic commerce, and that if a person was going to be out of contact with electronic networks they had to be given an alternative communications option.
"[The communications option can be a web form] except in situations where a recipient of the service, who, after contacting the service provider electronically, finds himself without access to the electronic network, requests the latter to provide access to another, non electronic means of communication," said the judgement.
The ECJ said that such situations might occur when a query is submitted and the user goes on a "a journey, holiday or a business trip".
The ECJ ruling implies that where a contact form is offered as an additional means of contact, answers should be prompt.
It said that effective communication does not mean that the response given to a question posed must be instantaneous. "On the contrary, a communication is to be regarded as effective if it permits adequate information to be obtained within a period compatible with the needs or legitimate expectations of the recipient," it said.
Personal contact at the premises of a web business with a person in charge or fax would also count as direct and effective forms of communication, it said. But where web forms are offered, it appears that queries should be answered quickly.
"It is true that an electronic enquiry template may be regarded as offering a direct and effective means of communication … where, as is clear in the case in the main proceedings … the service provider answers questions sent by consumers within a period of 30 to 60 minutes," it ruled.
The ECJ did not elaborate on timescales that may be appropriate for other businesses.
The E-commerce Directive was implemented into the UK by the E-commerce Regulations. The Regulations' relevant wording is almost identical to the Directive's.
The UK Regulations require a website to list, in addition to its postal address, "the details of the service provider, including his electronic mail address, which make it possible to contact him rapidly and communicate with him in a direct and effective manner".
Government guidance on the UK Regulations said that common sense should determine the contact details to be provided. It was silent on the issue of needing something more than an email and postal address.
"The Regulations also do not prescribe what is meant by details which make it possible to contact the service provider 'rapidly' as this may vary according to circumstances," said the guidance from 2002. "The enforcement authorities are expected to treat this as a question of common sense appropriate to the particular service provided but also to place the onus on the service provider to demonstrate that he has complied with this requirement."
Struan Robertson, a technology lawyer with Pinsent Masons and editor of OUT-LAW.COM, described the ECJ ruling as impractical. "We always thought that a postal address and an email address would suffice," he said. "This ruling will come as a shock to many businesses, though it will be welcomed by many consumers."
"The ruling could be interpreted as saying that businesses should have a team of people ready to answer customers' questions – which would be a huge problem for lots of companies," he said. "I can't see eBay opening a call centre just to deal with European users' queries."
"While many consumers do want that, it's totally impractical for many web-based operations. Unfortunately, the ECJ has given very little guidance on acceptable response times. If DIV's response time had been 48 hours instead of 60 minutes, would the outcome have been different? Does it expect a response only during normal office hours or should it be round the clock? Does it expect less of a website that doesn't sell anything than one that does? We are not told."
Offering a web form and sending an automated response is unlikely to comply, said Robertson. "That would not be 'effective' communication," he said. "The ECJ seems to expect a more personal service. It even seems to be saying that individuals have a right to submit a question through a form and ask for an answer by telephone if that's more convenient for their travel plans, which seems remarkable."
Robertson said that if the issue ever comes before a UK court, judges will be under pressure to follow the DIV ruling.
"A judge in a UK court would be obliged to interpret the E-commerce Regulations as far as possible in accordance with EU law. This ECJ ruling has become the authority for what the Directive really means. So the best hope for businesses that fear this judgment is that the issue is never raised in a UK court," he said. "If it is raised, the battle will surely focus on just how fast a business must respond to web form queries."
Trading Standards or the Office of Fair Trading could take action against a company that does not comply with the judgment, arguing that the company is in breach of the UK Regulations. Any user of a website that fails to comply with the duty could also go to court and seek damages for the company's breach of its statutory duty.
But such actions may never be raised.
"Consumers are unlikely to show any loss – so they'd be doing it on a point of principle, to win an order for the company to change its way of doing business," he said. "So far, we've heard nothing from Trading Standards or the OFT that suggests a need for more than an email address and a postal address on a website."
The OFT told OUT-LAW today that the issue is one for BERR to consider, not the OFT. BERR had not responded to OUT-LAW at the time of publication.
Editor's note, 05/11/2008: BERR told OUT-LAW today that it is still considering ECJ the decision. "We are currently assessing the impact of the ECJ's decision and what it means for UK e-businesses," a spokesman said. "We will respond with more detail in due course."
Indian Supreme Court aligns with international arbitration law in enforcing foreign award