Obliged to sell across Europe?
The Forum of Private Business has pointed out the new EU Consumer Rights Directive which comes into force on May 25th could have disastrous implications for small e-commerce companies.
They say that traders will be obliged to sell to every country in Europe under article 22a. This is highly undesirable for small businesses that may simply not be ready to deal with customers and their demands right across Europe. I won’t go into all the reasons why not, but currency and shipping are two main ones. The article also says that small companies may only be licensed to sell a product in one particular country which could cause a problem with suppliers if they start selling all over Europe.
However, EU law makes it illegal for suppliers to restrict selling by a distributor to one country only. It seems like unnecessary meddling by the bureaucrats but the new directive is at least consistent with past laws to encourage the working of the EU internal market.
The question is, how will they enforce this? Are they going to pursue some test cases? Imagine someone in Germany say, finding a site in England, all in English, and having to buy in Pounds. They would find no details about shipping to Germany, and if they did buy, would have to pay the currency conversion costs themselves. It’s unlikely, unless the product could not be bought in Germany, that they would buy.
It may be more likely in the smaller countries of the EU that they could not find the product locally and would try to place an order. So what would small e-commerce businesses do in this case?
To avoid a legal challenge they would have to ship the occassional order and/or try to find subtle ways of discouraging customers from other countries from buying through their web site. A strange situation indeed.
If ratified the EU Consumer Rights Directive certainly will have a dramatic effect on SMEs.
One point of contention with the Forum of Private Business’ views is that perusal of the terms of Article 22a are: Right to delivery of goods to or supply of services in another Member State In the case of a distance contract, the consumer shall be entitled to require the trader to deliver the goods or supply the service in another Member State. The trader shall meet the consumer’s request if this is technically feasible and if the consumer agrees to bear all the related costs. The trader shall in any event state those costs in advance.
The important point to note here is “technically feasible”, so in instances where the trader has rights only in one Member State and a consumer attempts to force the trader to sell to them in another Member State then the trader can refuse as this is not “technically feasible”.
Also of importance is Article 17: Obligations of the consumer in case of withdrawal
The consumer shall only be charged for the direct cost of returning the goods. He shall not be charged for that cost if the trader has agreed in the contract to bear it or the price of the goods to be returned is more than €40.
Obviously this means that all traders should ensure that their terms make clear that the consumer must bear the cost of returns but it will also be a major headache to those shipping goods in excess of E40.
In terms of test cases etc Germany is notoriously strict on consumer law. Mainly this is because competitors bring cases against each other i.e. trader A sees that trader B isn’t complying with the law so in order to disrupt their competitor A brings proceedings against B. In the UK things are different and it is the consumer or government bodies that would bring actions, hence it is a lot less likely.
It certainly is something to keep an eye out for.