E-commerce Act Takes Effect

The implementation of the EU E-commerce Directive (2000/31/EC) has finally been completed in Finland. The Act on the Provision of Information Society Services was adopted by Parliament on June 5 2002 and came into force on July 1 2002.

The new act aims at promoting e-commerce by ensuring the free provision of information society services. It is also designed to reduce the uncertainties relating to electronic contracting and to build up trust towards e-commerce among consumers.

The transposition of the directive will also affect existing legislation: new provisions relating to marketing will be added to the Consumer Protection Act, the Telecommunications Privacy Act and the Unfair Business Practices Act. These provisions require that the commercial purpose of marketing and the identity of the trader be clearly recognizable.

Scope of Application and Form Requirements

The newly adopted act corresponds to the proposed government bill, although some minor adjustments were introduced during the parliamentary review.

The act applies to services offered through networks and also covers the offer of goods by electronic means. Consequently the act covers, for example, the electronic marketing of services or goods. However, the physical provision of services or delivery of goods fall outside its scope.

As the freedom of contract and free evaluation of evidence are well-established principles in Finnish legal theory, the new act does not introduce significant changes to Finnish contract law. Electronic contracts have, as a general rule, already been recognized as valid and binding agreements under the existing legislation. However, the new rules clarify the present legal state by expressly addressing the form requirements for contracts. Therefore, a requirement for a written contract is fulfilled only if a contract's contents may not be unilaterally amended and provided that the contract remains accessible to the parties. However, certain categories of contracts (eg, sales of real estate) will remain subject to specific form requirements and cannot be concluded online.

Principle of Country of Origin

The new act sets out the principle of country of origin in Finnish legislation. Under this principle a service provider located in Finland may offer its services in the European Economic Area (EEA) without being obliged to take into account requirements relating to its activities as set forth in each EEA member state, provided that the service provider follows the rules of its country of establishment. However, there are certain exceptions to this principle.

Identification of Service Providers and Obligation to Provide Information

According to the new act services providers are obliged to provide information on themselves and their activities, as well as on the actual contracting procedure. These obligations are supplementary to other obligations to provide information set out in other legislation.

For the purposes of contacting or monitoring service providers, the new act requires that service providers and their activities be easily identifiable to consumers and authorities. Consequently, a service provider is obliged to keep its name, geographical address, email address and other contact information continuously available to consumers and authorities. In addition, a service provider must give information as to the official register with which it is registered, as well as its business identification number or corresponding registration number. When the provision of services requires permission or registration, contact information for the appropriate supervising authorities should also be made available. In addition, the act contains more specific obligations regarding identification of a service provider.

Further, the new act requires that certain information be provided before an order is placed, including information on the following:

• the language in which the contract will be concluded;
  
  
• the technical measures available to identify and correct errors; and
  
  
• the trade practices applied by the service provider and information as to where these can be obtained.

The provision of this information is mandatory when concluding business-to-consumer contracts.

Notice and Take-down Procedure

A significant addition to the national rules is the introduction of provisions regarding the limitation of liability of intermediary service providers. The directive's provisions concerning mere conduit (Article 12) and caching (Article 13) are transposed into the Finnish legislation as set forth in the directive. However, in relation to hosting services (Article 14), and especially to the conditions and procedures of taking down material hosted on a server, the new provisions go further than the directive.

The new act provides that illegal material or material published or distributed unlawfully can be removed from the server by a court order after providing the service provider and the content provider with the opportunity to be heard in the matter. However, in urgent situations the order may be granted without hearing the parties. Further, when the content of the material is clearly illegal (ie, the material contains illegal pornography or other unlawful material) a service provider must remove the material from the server as soon as it becomes aware of it in order to avoid liability.

As regards copyright-protected material, the newly proposed notice and take-down procedure gives the copyright holder the right to have infringing material removed from the server by giving a notice fulfilling certain criteria to the intermediary service provider.

A copyright holder or a content provider is liable to pay damages for giving false information in the notice or in the reply the content provider may give to the notice. However, this liability does not arise if the copyright holder or the content provider had justifiable reasons for believing that the information given was correct. The relevant principles impose strict requirements for compensation in such cases.

For further information on this topic please contact Rainer Hilli or Kati Tusa at Roschier Holmberg, Attorneys Ltd by telephone (+358 20 506 6000) or by fax (+358 20 506 6100) or by email ([email protected] or [email protected]).