The Holidays are coming...so beware EU law!
Published on 21st Dec 2015
With Black Friday behind us…or even more significantly Cyber-Monday and with millions of dollars, euros and pounds being spent on gifts for the upcoming holidays, I thought I’d give some thought to some of the issues and advantages of e-commerce platforms as they relate to European consumers. There have been a number of developments in the last year which might have passed you by, so the below is a quick summary and if this is your area, there’s much more detail to consider!
Europe has always been a safe haven for consumers: or at least that’s what European Regulators try to achieve. However, many of the laws related to the physical sale of goods in stores, which of course has been overtaken by online purchases. Over the past 18 months we adopted EU-wide regulations to modernize aspects of consumer protection law, and in particular those relating to consumers’ online purchase journeys (including for the first time digital content purchases). Further regulation is also now potentially on the horizon though, with the EU looking at how and whether to update consumers’ rights and remedies post-purchase for online sales, and continuing in its quest to standardize this EU-wide (which would only be good news for US businesses). This concept has admittedly been around for a while, but is now being tackled with renewed enthusiasm as part of the Digital Single Market (see below) so more progress is expected this time.
As I mentioned in my blog last month, data protection and privacy is a challenging area when dealing with European consumers. The invalidity of Safe Harbor has led to much confusion around how to legally transfer customer data from the EU to the US. The Regulators continue to discuss as we wait for solutions, but you should also be aware that we expect new laws to potentially be introduced sometime in 2016 to update and harmonize Data Protection around the EU. Yesterday’s announcement on this subject is good news when dealing with consumers online around the region, but the final impact of the regulations will place more onerous obligations on the seller to seek appropriate consent and account for the holding of such data. More is to come, but it’s clear that the new year will continue to bring more questions than answers around this topic.
New laws around how sales tax (VAT) is charged around Europe has had an impact on e-commerce platforms. Ensuring that appropriate rates are charged, considering whether “digital services” are being provided and identifying the appropriate authorities to account to for such tax remains a complicated area and not one to ignore.
Digital Single Market
A few months ago, the European Commission announced a number of new initiatives to enhance the consumer experience across the EU – effectively bringing down digital borders. This will impact on some pricing decisions, where sales cannot have different prices according to location of the buyer. Similarly, purchased digital content should be transportable across borders: so accessing content irrespective of your physical location is on the horizon.
Advertising and marketing
Europe has always has a different approach to its standards when considering appropriate marketing strategies. Whether looking at advertising or promotions, each country has varying levels of tolerance and cultural sensitivities. Enforceability of breaches also varies in terms of approach and levels of fines. Global marketing generally doesn’t work: getting local input will avoid negatively impacting reputation in local markets.
So – just be aware, that whilst there’s a huge and valuable market in the EU, there are also a number of hurdles which it’s worth being aware upfront to avoid unforeseen obstacles. Keeping such knowledge up-to-date is also important as regulations change and it’s key that you keep up with new developments. Many won’t need material changes – but others may challenge your business model and/or need some greater thought to ensure adequate compliance.
Enjoy the holidays!