Electronic Commerce and Consumer Protection in Europe

Article excerpt

I. CONSUMER PROTECTION AND THE LAW OF CONFLICTS IN EUROPE

In the face of continual globalization of markets, a brief look at European consumer protection law reveals a key provision anchored in Article 5(2) of the European Treaty of Rome relating to the law of obligations and contractual relations. This Article 5(2), and an identical provision found in Article 29 of the German Law of Conflicts both read, the "mandatory provisions of the law of the state" in which the consumer has his customary abode are to be observed in all consumer contracts, "if conclusion of the contract was preceded by an express offer or advertising in that state and if the consumer undertook in that state the legal acts required for conclusion of the contract." As a result, these requirements will need to be met in each consumer transaction on the Internet within the context of electronic commerce. Thus, when the consumer makes a declaration of acceptance or places an order via the Internet in his or her home country, Article 5(2) of the Treaty of Rome and likewise, in Germany, Article 29 of the Law of Conflicts, must come into effect.

In Germany, for example, the consumer would be protected by the benefits of the Law on Standard Business Conditions, the Law Regarding Revocation of Door-to-Door and Similar Dealings, the Law on Consumer Credits and, as in some instances as they apply to package tours, Section 651a of the German Civil Code. From this perspective, electronic commerce does not appear to present any particular risks for European consumers nor is there an apparent necessity for legislative measures to improve European consumer protection. (1) However, the European Commission, through Directorate General of the Commission (DG) XXIV, relating to consumer protection, and DG XV, pertaining to the internal market, takes a different view.

II. NEW SOURCES OF EUROPEAN LAW RELATING TO E-COMMERCE

In coordination with the European Parliament, the European Commission has recently devoted considerable efforts to structuring an adequate framework for electronic commerce transactions in the European internal market. (2) As a part of that effort, the Commission has presented numerous Directives, which must be adapted by the European Member States into national law and Proposals for Directives relating to electronic business transactions to the general public. Directives of importance include the Directive on Distance Contracts (3) (Directive 97/7/EC of 20 May 1997), relating to consumer agreements concluded through the use of distance communication technology; the Data Protection Directive (Directive 95/46/EC of 24 October 1995) on the protection of natural persons during processing of personal data and relating to free data transfer (4) and the Database Directive (Directive 96/9/EC of 11 March 1996), relating to copyright and sui generis protection for databases. (5) The latter Directive is of particular significance for multimedia content on the Internet, e.g., the traditional World Wide Web as well as other assorted on-demand services. (6)

Of the draft Proposals presented for public and parliamentary discussion, particular mention should be made of the revised Proposal for a Directive on the Harmonization of Certain Aspects of Copyright and Related Rights in the Information Society of 21 May 1999. (7) This Proposal would not only implement the World Intellectual Property Organization (WIPO) Copyright Treaty and the WIPO Performances and Phonograms Treaty of 20 December 1996 into European law, (8) but would also have the objective of rendering all copyrighted digital content on the Internet fit for commercial trade. Within this context, the Directive on a Community Framework for Electronic Signatures should not be forgotten. (9)

The Community Framework Directive aims to overcome the halfhearted approach taken in such laws as the German Digital Signature Act, part of the Law on Information and Communication Services (Multimedia Law) of 22 July 1997, (10) which, subject to certain restrictions, equates digital signatures with a handwritten signature within the meaning of Section 126(1) of the German Civil Code. …