EU law moves the national goalposts for online firms

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EU law moves the national goalposts for online firms

Daniel Thomas
Online retailers must draft their terms of business carefully to avoid being sued by foreign consumers under new European Union legislation, lawyers have warned

The Brussels Regulation, which became law on 1 March, allows consumers within the EU (except Denmark) to insist that disputes with retailers are heard in their own country, rather than where the retailer is based.

Consumers can bring proceedings in their own country when companies are considered to have pursued commercial or professional activities in that country or by any means "directed" activities at that country.

Charlotte Walker-Osborne, IT expert at law firm Eversheds, said firms operating in any field of e-commerce, whether Web, digital TV or mobile phone based, could be caught out. "It could affect companies that are sending out lots of marketing information for example," she said. "However, the situation remains unclear because it fails to clarify the difference between 'directing' and 'encouraging'."

The majority of companies tend to be reactive rather than proactive with EU e-commerce legislation, partly because there is so much of it, Walker-Osborne said. Companies should take steps now to avoid potential problems with this new legislation, she advised.

"While it is difficult to estimate how much impact the regulation will have on UK firms that are active in the EU, this is clearly a good time to review terms and conditions of trade," Walker-Osborne said.

Online retailers will also be affected by EU regulation, currently in the draft stage, that will give consumers greater protection when they buy faulty goods.

Under the new rules, in the first month of trading it will be assumed that faulty goods were supplied with the fault unless proven otherwise by the retailers - a reversal of the usual burden of proof.

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