Business

New EU Law to Remove Online Sales Headache

The days of European online shoppers getting the message "this product is not available in your country" could be numbered.

Currently around 3 million consumers in Europe each year are refused sale or delivery in their country. But new proposals from the European Commission on Tuesday aim to create a Common European Sales Law which would give greater incentives for small online companies to trade across European Union borders. It would also give consumers more rights in seeking returns or refunds for faulty goods.

Currently both consumers and businesses are deterred from ordering online from other countries because of uncertainty about rights and the difficulty in harmonizing contract laws. Only 7 percent of consumers buy online from another member state, compared to 33 percent who buy by Internet in their own country.

Meanwhile, only 9.3 percent of businesses sell across E.U. borders. Companies that want to sell abroad have to adapt their terms and conditions to up to 26 different national laws, which can cost up to €10,000 (US$13,607) in translation and legal fees for each additional country. According to a Eurobarometer survey, 71 percent of European companies said they would prefer to use a single European contract law for all cross-border E.U. sales.

The proposed law would also give online consumers more rights. For example, in the case of faulty goods, consumers could choose to terminate the contract, get a replacement, repair or a price reduction. This free choice of remedy is only available in five E.U. countries today.

These options would also be available to consumers who have bought digital content such as music, films, software or smartphone applications that are downloaded from the Internet. These products would be covered regardless of whether they are stored on a tangible medium such as a CD or a DVD.

According to estimates, almost half (44 percent) of consumers who shop online are uncertain about their rights, particularly with regard to digital content.

The new law will be optional and valid only if both parties voluntarily and expressly agree to it. "Instead of setting aside national laws, today the European Commission is taking an innovative approach based on free choice, subsidiarity and competition," explained Justice Commissioner Viviane Reding.

The Commission's proposal now needs approval from the member states and the European Parliament, which already signaled its overwhelming support in a vote earlier this year.

Follow Jennifer on Twitter at @BrusselsGeek or email tips and comments to jennifer_baker@idg.com.

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