New EU proposals could cripple smaller online retailers, the Forum of Private Business (FPB) claims.
Under Article 22a of the forthcoming EU Consumer Rights Directive, web-based independent traders could be obliged to sell their products to almost every country in Europe, while Article 17 of the Directive will force businesses to pay the postage for goods worth more than £35.
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The combination of these two articles could have a detrimental impact on smaller companies selling over the internet, says the FPB.
Forum chief executive Phil Orford said: "Forcing businesses to serve consumers in all member states and then introducing a rule which requires them to pay the shipping costs on refunded goods, to markets which they did not want to ship to in the first place, is highly unfair.
"We are calling on the EU to see sense and make sure these particular parts of the Directive are dropped."
Hayley Chalmers, who recently set up online retail business Short Couture, said the proposals could put many small online traders like herself out of business.
"Thousands of businesses exist only because of the existence of the internet. If we make it too onerous and expensive for them to trade, we'll kill these businesses," she said.
The Business Software Alliance (BSA) has also criticised the Consumer Rights Directive attempts to apply protections intended for tangible goods to software and other digital services that do not work.
"For digital services like software, safeguards are needed that protect consumers given the unique ways in which digital services are acquired, delivered and used. The Consumer Rights Directive is not the appropriate instrument to address protection for digital services."
The Directive is currently being considered by the EU Parliament Internal Market and Consumer Protection Committee. It could come into effect as early as January 2013.