E-commerce regulations which came into force on 21 August introduced a country-of-origin principle which means UK-based online service providers operate under UK law in most cases, irrespective of the country the service is offered in.
This is good news for online retailers and service providers, according to Charlotte Walker-Osborn, IT expert at law firm Eversheds. "The regulations give online service providers a greater certainty to operate in, particularly as they mean consumers will be less likely to take action," she said.
Ironically, consumers were given extra power to take action against foreign online service providers by EU laws passed earlier this year. The Brussels Regulations allow consumers to 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. But the fact that they would probably now need to use foreign lawyers would dissuade most from taking any action, Walker-Osborn said.
The country-of-origin principle was one of a number of changes to the original draft regulations that the UK Government implemented after intense lobbying from industry bodies such as the Internet Service Providers' Association. Other important changes include the regulations which set out that providers will not be liable for "pecuniary remedy or any criminal sanction", or damages, in the case of illegal material over which they have little control.