Ten years ago, the European Commission sought to promote electronic commerce (“e-commerce”) by adopting a directive addressing certain legal aspects of information society services, in particular electronic commerce, in the Internal Market (2000/31/EC) (the “E-Commerce Directive”). Its aim was to encourage consumers and businesses alike to make full use of the opportunities presented by e-commerce, thereby promoting cross-border trade and assisting in the creation of the single market.
A decade later, however, online sales account for a paltry 2% of total European retail trade. The Commission feels that this is not good enough, so has launched a consultation on the operation and implementation of the E-Commerce Directive, as well as seeking general views on why e-commerce has not been more of a success in Europe. With many complaints continuing to be heard about the inability of consumers to purchase goods from other countries over the internet, and the inability of companies to provide effective cross-border services, the implications for the single market and its attendant competition are clear.
The consultation is addressed to individuals, consumer associations, businesses and governments. With regard to individuals, it seeks to understand the drivers behind consumer choices, and to uncover consumer perceptions as to why online retailing is not currently thriving. That theme is developed in the questions aimed at businesses, which look to identify the problems businesses encounter when looking to maximise e-commerce opportunities.
The consultation echoes the messages contained in the Commission’s recent “Retail Market Monitoring Report” (published in July 2010) and its August 2010 communication on “A Digital Agenda for Europe”. Whilst the Retail Report notes that online retailing has not developed to the degree that might have been expected, the Digital Agenda emphasises the perceived importance of e-commerce to the recovery of Europe from the current economic downturn, and as a key part of smart and sustainable future growth of the European economy.
It is clear from the consultation, as well as the Retail Report and the Digital Agenda, that persisting national barriers to cross-border online sales are of significant concern. In particular, the consultation picks up on the impact of intellectual property rights, including copyright, and the goods and works which benefit from those rights, being licenced, sold and managed on a territorial basis.
That this issue is the subject of some scrutiny will come as no surprise to those active in the affected industries. In the music industry, the problems associated with bringing a rights management framework designed for an analogue age into the new online era have resulted in numerous initiatives at a European level, as well as significant competition investigations and the ensuing litigation. An attempt in 2005 to resolve the problems by way of Commission Recommendation has not worked, and a new framework directive on collective rights management is expected at some point in 2010.
Similar issues have arisen in other creative industries. In the audiovisual sector, for instance, a UK High Court case concerning, amongst other things, territorial restrictions on the licencing of the broadcast of football games has been referred to the ECJ to seek a view on whether such restrictions breach competition law.
Whilst some might see the consultation as an attack on all industries for having failed to develop e-commerce, the ultimate villain does appear to be the simple fact that Europe, as a collective entity, still has to deal with barriers to trade created by national laws, etc. Until true harmonisation is achieved, it is hard to see how ecommerce within Europe can reach its full potential. What is apparent now, however, is that there is growing impetus for change, and the pressure is coming from a number of directions and through a variety of initiatives. The hope for Europe, and its consumers and businesses, must be that collectively these initiatives will prove effective and a truly “single” market finally emerges.