European Commission to review Distance Selling Directive

Out-Law News | 22 Sep 2006 | 3:42 pm | 2 min. read

Consumer confidence in cross-border retailing may have been undermined by the rash of laws that followed the European Commission's Distance Selling Directive, according to Europe's consumer protection Commissioner Markos Kyprianou.

The Commission has announced that it will conduct a review of the Directive to assess how much it needs to be updated. The Directive, which is critical in laying down the legal parameters of internet retailing in Europe, was passed in 1997.

The Commission will now conduct an investigation into the Directive and into how it has been passed into law in all the member states amidst fears that a wide divergence of practices has caused confusion and mistrust on the part of consumers.

"National divergences in transposition result in particular from the use of the 'minimum clause', which states that member states may introduce or maintain more stringent provisions to ensure a higher level of consumer protection as long as these measures are compatible with the EU Treaty," said a Commission statement.

"This may have an impact on the internal market and may affect business and consumer confidence in cross-border trade," it said.

"What I am most worried about are possible loopholes or areas of legal uncertainty created by new and fast-growing distance selling products and technologies, which might create confusion for consumers and serious business alike, or be exploited by rogue traders," said Kyprianou. 

"I think it's the appropriate time to carry out a review," said Gavin McGinty, an e-commerce lawyer with Pinsent Masons, the law firm behind OUT-LAW. "The minimum clause divisions in the Directive meant that different countries have implemented the Directive slightly differently. For instance in the UK we have a minimum cancellation right period of 7 working days from the day after the goods are delivered but in Denmark that's 14 days. This means that there might be confusion for people ordering from different countries, which is never a good thing."

"The consultation we are launching today will help us gather valuable stakeholder feedback on whether and how to update the Distance Selling Directive. It will also feed into our broader review of the Consumer Protection body of legislation next year.”

"Differences are likely to have arisen in the interpretations of the Directive rather than the ways it was taken up by the Governments," said McGinty. "The OFT guidance that was issued in the UK just a couple of weeks ago went quite far in adding to or interpreting what the regulations in the UK say."

The Directive was designed to make distance buying as close as possible to the experience of going into a shop. Because consumers could not touch and see goods, extra provision for returning goods was written into the Directive.

The Commission statement said that the Directive may need to be adapted to suit new products and technologies, such as mobile phone commerce and online auctions.

The consultation period is now open and will run until November.

Free seminar on online selling

OUT-LAW is running a series of free breakfast seminars on the law of selling online that will help businesses to understand the rules and best practice guidance for selling online. The events will take place in London, Birmingham, Manchester, Leeds, Edinburgh and Glasgow.