Proposed European e-commerce law would stifle business
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| If the E.U law goes through, e-commerce in India and other developing countries will be badly hit |
Paris, 25 July 2001 - Business has appealed to the European Union to give up trying to make the laws of the consumer's country apply in cross-border e-commerce disputes.
The International Chamber of Commerce warned in a statement on jurisdiction and applicable law in electronic commerce that if the EU persisted it would risk stifling business-to-consumer (B2C) transactions over the Internet.
Instead, the International Chamber of Commerce says that the laws of the country of origin of goods or services supplied should form the basis for settling disputes arising out of e-business transactions.
ICC fears that proposed EU legislation would discourage companies, and particularly small and medium-sized enterprises, from embarking on B2C ventures and also place severe limitations on e-business in developing countries.
A statement by ICC e-commerce legal specialists was delivered to the European Commissioner for Justice and Home Affairs, Antonio Vittorino, in the wake of last month's decision by the European Commission to consult with industry and consumer groups on its controversial proposed law governing cross-border Internet commerce in Europe.
ICC e-commerce manager Ayesha Hassan said: "Regulators must abandon the country-of-destination criterion for B2C disputes if they do not want to discourage companies from getting seriously involved in online selling directly to consumers."
Ms Hassan added " While the country of destination principle may be right for specific types of disputes, using it as a blanket rule would be a serious impediment.
Many companies faced with the country-of-destination principle will choose to avoid the minefield of dozens of different and potentially contradictory laws, and cease to sell goods and services online."
The ICC statement said: "Many companies today simply are not willing to subject themselves to the costs of invest
igation and compliance with a myriad of rules in each country, or the risk of sanctions, unenforceable contracts, and adverse publicity in hundreds of countries, states and provinces."
The world business organization said that when e-business disputes arise, consumers should first seek redress through a company's internal customer satisfaction mechanism. If that fails, the remedy was alternative dispute resolution (ADR) and only if the dispute persisted should aggrieved consumers resort to legal action.
Full text of the ICC statement on "Jurisdiction and applicable law in electronic commerce"