On January 19, 2016 the Regulation (EU) No 524/2013 on online dispute resolution for consumer disputes entered into force (henceforth "Regulation").[1] The aim of the Regulation is to provide a European online dispute resolution platform (henceforth "ODR Platform") to achieve an independent, impartial, transparent, effective, fast and fair, out-of-court resolution of disputes between consumers and online traders (Art. 1 Regulation). The Regulation supplements the Directive 2013/11/EU on alternative dispute resolution for consumer disputes.[2]

The ODR Platform is set up and maintained by the European Commission. In order to allow consumers to file a complaint, online traders must provide an electronic link to the ODR Platform. The obligation entered into force on January 19, 2016, and the ODR Platform was launched on February 15, 2016. [3]

Regulation on Online Dispute Resolution

The Regulation is directly applicable and valid in the entire Union since it went into force on January 19, 2016. The regulation states that the European Commission develops and operates the ODR Platform (Art. 5 Regulation). The specific functions of the platform as well as the entire process for form filing and processing a complaint to its resolution are also set out in the Regulation (Art. 5 No. 4 and Art. 7-10 Regulation).

Under the heading "Consumer Information" in Article 14 the obligation to provide an electronic link on the website to the ODR platform is set out. The obligations cover:

  • Traders established in the Union engaging in online sales or service contracts, and online market places established in the Union (para 1). They must make the link easily accessible and include their own e-mail addresses.
  • Traders established in the Union engaging in online sales or service contracts, who are committed or obliged to use one or more alternative dispute resolution entities ("ADR entities") according to Art. 4(1) point h Directive 2013/11/EU (para 2). If an offer is made by e-mail, then the link to the ODR Platform must also be included in the e-mail. Where applicable, the information must comply with the general terms and conditions for online sales and service contracts.

For traders (para 1 and para 2), the link must be easily accessible, but there are no precise requirements regarding placement of the link on the website. The term "easily accessible" should be interpreted in uniform manner throughout the EU which means that ultimately the ECJ has to provide some guidance in this respect.

In Germany, online traders were rather reluctant to comply by placing a link to the ODR Platform on their websites. Yet a recent judgement by the district court of Bochum[4] is likely to change that. The district court of Bochum has ruled that an online trader who does not provide a link to the ODR Platform infringes on Unfair Competition Law and is prohibited from further trading online.

The Decision by the District Court of Bochum

In the judgment by the district court of Bochum, an online trader for watches (applicant) requested a preliminary injunction by the court against another online trader of watches (defendant) who did not include a link to the ODR Platform. The preliminary injunction was granted.

The court held that the defendant was obliged to include an easily accessible link as of January 9, 2016 – when the Regulation went into force – even though the ODR Platform was not online at the time (it was launched on February 15, 2016). Since the defendant did not provide such link, they violated Sect 3a of the German Unfair Competition Act in connection with Article 14 para 1 sentence 1 of the Regulation (No) 524/2013.

Outlook

The decision of the district Court of Bochum provides an outlook of how German courts will tackle non-compliance with the Regulation. According to Article 18 Regulation, it is for each Member State to decide on applicable penalties for infringements of the Regulation; yet they must be effective, proportionate and dissuasive. However, as mentioned above, it is unclear where the link must be placed on the website. Ultimately, this is for the ECJ to determine.

The major task for online traders is to include the link to the ODR Platform in an easily accessible way on the website in order to comply with the Regulation. The Regulation is directly applicable in all EU Member States (no transposition into national law is necessary) and therefore directly obliges online traders to follow the rules therein.