Since 9 January 2016, a European Online Dispute Resolution (“ODR”) Platform has been put in place by the European Commission. The Platform is intended to be used by online shops and consumers for settling their disputes. The ODR Platform aims to provide a simpler, faster, more efficient and cheaper solution for the settlement of cross-border consumer disputes in the European Union.

Some time ago, the European Parliament and the Council adopted the Regulation No 524/2013 on online dispute resolution for consumer disputes. The ODR Regulation is of significant importance in the development of an online alternative dispute resolution between consumers and traders in the European Union. While electronic commerce is the fastest growing market in the world and offers customers the opportunity to purchase any products and services via the Internet, only a limited number of online consumer transactions occurs across national borders. According to the European policy makers, the major reason for the slow uptake of cross-border e-commerce is the lack of an efficient way to settle cross-border disputes. Given the relatively high financial threshold to initiate court proceedings, alternative methods of dispute resolution (“ADR”) such as arbitration, mediation, etc. may thus be better suited to resolve such disputes.

As the policy makers are of the opinion that national ADR schemes are fragmented and incomplete, a first step was to better organise and structure these via the called Directive on consumer ADR (Directive 2013/11/EU). In addition to this, and specifically in relation to online ADR (which is called “ODR”), the ODR Regulation has been adopted, amongst others introducing a called ODR Platform developed and operated by the European Commission.

To have a clear understanding of the new rules, the ADR Directive and the ODR Regulation should be read together. For this discussion however, we only focus on the ODR Platform and what it means for you as an online trader.

The ODR Platform

Since 9 January 2016 the ODR Platform is operational. It will be accessible to both consumers and traders on 15 February 2016 via the following link:

Some quick facts:

  • The ODR Platform is an interactive and multilingual platform specifically designed for assisting consumers who have a complaint about goods or services they have bought online.
  • Consumers or traders, when agreeing to ODR, must complete an electronic complaint form, made available on the ODR Platform.
  • The parties then decide which ADR entity shall be competent to settle their contractual dispute. The ADR entities are bodies that comply with the binding quality requirements established by the ADR Directive and which are included in the national lists of ADR bodies.
  • The selected ADR entity shall handle the case entirely online and reaches an outcome within 90 days. The legal value of the decision of the ADR entity will depend on the form of ADR chosen (mediation, arbitration, conciliation, etc). As a trader engaging in online sales or service contracts with consumers and established within the European Union you will have to inform consumers about the existence of the ODR Platform as well as the possibility of using the ODR Platform for resolving your disputes.
  • More specifically, keep the following requirements in mind:
  • What do I need to do as an online trader?
  • You must provide on your website(s) an electronic link to the ODR Platform and your own e-mail address. That link must be easily accessible for consumers.
  • If you make commercial offers to consumers via e-mail, similar information should be included in the e-mail.
  • The information shall also be provided in the general terms and conditions applicable to online sales and service contracts.
  • Upcoming eCommerce legislative initiatives

While this is a very significant development that requires immediate compliance, other eCommerce legislative initiatives are in the making. The European Commission has recently published two proposals for Directives on purchases of digital content and tangible goods, which aim at harmonising contract rules across the EU. The Directives will regulate several aspects, including supplier’s liability for defects, burden of proof, right to end a contract, and notification duty. The proposals are now to be discussed among the European Parliament and the Council of the EU, giving companies an opportunity to contribute to the decision-making process by voicing their opinions and concerns on the issues that could have an impact on their business.