§ The Earl of Northesk
asked Her Majesty's Government:
What is their response to the current European Commission proposals with respect to customer protection on the Internet, particularly in the light of recent criticism from the Alliance for Electronic Business. [HL4598]
§ The Minister for Science, Department of Trade and Industry (Lord Sainsbury of Turville)
The Commission's revised proposal for a Community Regulation on jurisdiction in civil and commercial matters includes in Article 15 consumer provisions which in certain circumstances would allow consumers to sue in their home courts when in dispute with traders in other member states. In particular, consumers would be entitled to do so where the trader, "pursues commercial or professional activities in the Member State of the consumer's domicile or … directs such activities to that Member State".
The Government's approach is to seek to avoid placing significant extra burdens on business, while taking into account the need to build consumer confidence in e-commerce. In the light of this we welcome the Commission's proposal to delete Recital 13 of its original proposal, which defined "directs such activities" in such a way that all transactions involving Internet websites would automatically have been covered by Article 15. Member states have provisionally agreed that this recital should be deleted.
The Government agree with the Alliance for Electronic Business (AEB) that it would be desirable to have a new definition of "directs such activities". One possibility would be to provide that Article 15 would only apply where websites are intentionally targeted at particular member states. The fact that a website is accessible in different countries, or uses languages or currencies which are in common use in several countries, should not by itself indicate that a trader's activities are directed to those countries.
The Government also agree with the AEB that it would be desirable for the Presidency to allow more time for member states to discuss the implications of Article 15 for e-commerce, and for the five-year review period for the regulation to be shortened. We have proposed that the Commission be required to review the impact of Article 15, particularly on smaller firms, at the same time as the review of the Directive on Electronic Commerce, which is to be completed by July 2003.
The Government believe that in many future cases the best way to resolve contractual disputes will be through low cost, user friendly alternative dispute resolution (ADR) schemes such as arbitration and ombudsmen. We support proposals from other member states that the regulation should be accompanied by a joint statement from the Council and the Commission drawing attention to the importance of developing cross-border ADR in the single market.