New Common European Sales Law (CESL) for cross-border E-commerce said to be not webshop friendly

Wednesday, 17th April 2013

In a hearing held by the European parliament this week. Lon Mlenberg, legal advisor with, voiced criticism on the newCommon European Sales Law (CESL)for cross-border E-commerce. The new law "will involve extra obligations concerning information. Furthermore, it will actually expect entrepreneurs to ask consumers for their approval on two occasions: once when consumers enter into a purchase agreement and also for express permission to apply the uniform European Sales Law. The entrepreneur will also even have to confirm the second permission."

European trustmarks?

Wednesday, 17th April 2013

In astudy prepared for the European CommissionDG Communications Networks, Content & Technology a potential remedy for one of the big barriers to European cross-border sales is being analized: trustmarks to stimulate trust.

The study signals that the current levels of cross border e-Commerce in the European Union fall short ofits targets of 20% in 2020 as set by the European Commission in the Digital Agenda for Europe.

It sums up the barriers for cross border e-Commerce: "Operational barriers include language barriers, lack of information, issues with payments (especially across borders), issues with delivery and logistics (especially across borders) and a lack of IT-skills. Legal barriers include uncertainty of customers regarding their rights as consumers and the fragmentation of legislation across the EU, for example in the fields of consumer law, VAT regulations and copyright regulations. Trust barriers include fear of fraud, fear of non-delivery, lack of trust in eCommerce and lack of trust in the after-sales process.Not all these barriers can be overcome by trustmarks. Most legal issues can only be solved by harmonization of regulations and by other types of policy measures, addressing. Besides trustmarks, other instruments exist that can stimulate (cross-border) eCommerce, such as price comparison website, new payment methods, and consumer rating websites."

The study then turns to trustmarks as a potential answer to the lack of trust in e-Commerce: "between 6% and 7,5% of a total of 400.000 to 500.000 EU-based webshops that have online revenue of more than 50.000 euros carry a trustmark."

These trustmarks are especially valuable for SMEs "as these are often not a well-known brand of their own".

The study mapped the curren EU trustmark situation: "Our inventory of trustmarks is based on desk research, survey research, and interviews. Among a selection of 75 trustmarks, (54 from within the EU and 21 outside of the EU, mainly in the US and Asia), 46 trustmarks were found to be active (29 from within the EU). This summary will focus only on the EU-based trustmarks. The majority of these (25) operates in only one country, while 4 EU trustmarks operate across borders: SafeBuy (UK), Tv Sd (DE), Trusted Shops (DE) and ISIS (UK). The latter two are now merged and have by far the largest coverage of webshops within Europe. There are no EU-based trustmarks that have a more or less global coverage, such as the US-based technically oriented trustmarks that perform SSL-certification."

It also studied different types of trustmarks: "Trustmarks stakeholders indicate that government bodies are the most trustworthy warrantors in the field, followed by foundations or non-profit organizations. Surprisingly, opinions on trustmarks provided by industry organisations or trade organisations are almost evenly spread when it comes to assessing level of trust and trustmarks provided by private companies are either neutral or provide a low level of trust. The European Commission should take account of this general opinion, probably not so much to engage directly in the provision of trustmark services, but more to leverage the trust-building role of neutral (public) bodies."

The study then comes up with four alternative policy options for the European Union:

"1) Business as usual: doing nothing (on the part of the EC) might not stimulate cross-border eCommerce in the way the EC would prefer. There needs to be a growth path to stimulate development. Doing nothing may lead to or continue the current fragmentation of the EU eCommerce market, leaving the initiative to industry and losing control of market failures which would determine a patchy development of trust services in Europe.

"2) Self-regulation/self-organisation with some non-binding instruments such as standards: the stakeholder group participating in the focus group considers a self-constructed federation of trustmarks the most feasible and useful option, as long as it remains voluntary, not mandatory. In this option, the two main players would be the EC and an Industry Forum. The operational rules would indicate the level of responsibility of each of the player. Here the role of EU institutions would be to merely facilitate the cooperation and talks between stakeholder representatives and the industry. The EC would take a small coordination role but no major organisation role.

"3) An European trustmarks accreditation scheme. The scheme would be based on a hierarchical ISO approach, and a European institution/ agency would take up the challenge of accreditation. The development of a European trustmark accreditation scheme could start with the self-regulatory approach (policy option 2) and then further investigate whether the elaborated standard could be part of the European accreditation scheme. Also in this option, one of the main factors could be an Industry Forum where industry would organise itself under the guidance of the EU. The investment to achieve an EU accreditation scheme would be significantly higher and require a stronger role of the Commission in steering the contributions of the industry and the stakeholders.

"4) An EU-level trustmark: a European trustmark as a fully-fledged EU trustmark is proposed. European policy makers would set up a European trustmark, comparable to the EU Ecolabel scheme, to be granted to traders. Such a trustmark would compete with existing trustmarks. The award would be following an audit based on a set of requirements and a code of conduct. Stakeholders would participate in setting up the trustmark. This theoretical option would require a major operational investment and go beyond the borders of policy making. Running a EU trustmark would mean creating a complex, multi-layered trust services body capable of operating in the whole of Europe. "

European e-Commerce forecast

Wednesday, 17th April 2013

In a recent presentation (March 2013)Janine Nthlichs, Editor-in-Chief came up with interesting figures on European online consumers as % of the online population:

  • France 2011: 63%, 2016: 76%
  • Germany: 2011: 69%, 2016 81%
  • Italy: 2011: 36%, 2016: 47%
  • The Netherlands: 2011: 75%, 2016: 85%
  • Spain: 2011: 41%, 2016: 58%
  • Sweden: 2011: 72%, 2016: 86%
  • UK:2011: 75%, 2016: 85%
According to her presentation the European e-Commerce market equals 305 bn euro in 2012 (up 20% since 2011). The European e-Commerce market has overtaken the US e-Commerce market (280 bn euro in 2012).

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