Electronic Commerce Directive approved by European parliament and adopted
Background:
The Directive on "certain legal aspects of Information Society services, in particular electronic commerce, in the Internal Market" is intended , to establish harmonised rules to ensure that EU businesses and citizens can supply and receive Information Society services throughout the EU , irrespective of frontiers. Amongst the areas it deals with are when contracts will be regarded as concluded on-line, on-line dispute settlement and unsolicited commercial email or "spam." Before this Directive, the Distance Selling Directive (covered elsewhere in this section) had already had something to say on this topic, with particular regard to the question of consent. It effectively obliged EU member states to introduce statutory controls on the practice, on either an opt-in or opt-out basis. Now this Directive goes further, as in this next section we focus on the aspects of the Directive most relevant to marketers.
What will change:
Article 7 obliges those EU member states who permit spam (some like Austria do not allow it at all) to ensure that every e-mail sent "shall be identifiable clearly and unambiguously [as an advertising message] as soon as it is received by the recipient." Most commentators interpret this to follow the lead of a number of US state laws by making it mandatory to include "Advertising message" or something similar in the subject box.
Aricle 7 provides also that spammers be legally obliged to consult regularly and respect opt-out registers.
At the core of much of the remainder of the Directive, which applies only to service providers established in the EU, are two terms. First there are "Information Society Services" ("ISS"). These cover b.to.b. and b.to c. services provided free of charge and services allowing for on-line transactions such as interactive teleshopping of goods and services and on-line shopping malls. Other examples of services covered would be on-line newspapers and on-line professional services such as legal, medical, accounting or estate agency services as well as on-line entertainment services such as video on demand. The second core term is "commercial communications" whose definition begins "any form of communication designed to promote, directly or indirectly, the goods, services or image of a company.."
What is not crystal clear is whether an advertisement or other promotional communication on a passive website is part of an ISS, but for present purposes we will assume that this is the case.
Article 6 applies to all commercial communications that are part of or constitute an ISS. It provides that all on-line promotional competitions or games and promotional offers, such as discounts, premiums and gifts (where permitted in the member State where the service provider is established) must be clearly identified as such and the conditions which are to be met to qualify for them must be easily accessible and presented clearly and unambiguously.
Article 5 provides that where an ISS refers to prices these must be indicated clearly and unambiguously and in particular must indicate whether they are inclusive of tax and delivery costs.
The much trumpeted "country of origin" article 3 obliges Member States ("MS") to ensure that ISS provided by entities established within their borders comply with national laws. The corollary of this is that if an ISS is being provided in MS 1 by an entity established in MS 2, MS 1 must not use its own laws to restrict MS 2’s freedom to do this. So far so good, but the trumpet voluntary is somewhat muted by subsequent provisions. These allow MS 1 to apply its laws to restrict the MS 2 ISS provider’s activities in MS 1 if this is for reasons such as the protection of minors or consumers and various other specified reasons and the law involved is proportionate to the achievement of these objectives.
The Commission seeks to temper this coach and horses with an obligation on MS to notify the commission of such measures and to act on the Commission’s decision that any such measure is not permissible. In practice, however, one imagines that the "consumer protection" card will often be played by MS seeking to apply local protectionist regulations to pan European marketing activities. This might occur in respect of on-line prize promotions for example, so as to seriously undermine what was regarded as a fundamental achievement of this piece of EU law.
Timetable:
The Directive must be implemented in MS by the end of 2001.
What happens next:
The DTI will no doubt publish a consultation paper on the implementing regulations at some point over the next twelve months.
