Documents considered by the Committee on 6 July 2016 Contents

2Digital Single Market: E-commerce package

Committee’s assessment

Politically important

Committee’s decision

Not cleared from scrutiny; further information requested; drawn to the attention of the Business, Innovation and Skills Committee and Culture, Media and Sport Committee

Document details

Commission Communication: A comprehensive approach to stimulating cross-border e-commerce for Europe’s citizens and businesses

Legal base

Department

Business, Innovation and Skills

Document Numbers

(37817), 9610/16 + ADD 1, COM(16) 320

Summary and Committee’s conclusions

2.1Despite the rapid growth of e-commerce in recent years, the Commission reports that only 16% of EU consumers buy online from another EU country and 9% of EU retail companies sell cross-border.

2.2On 25 May, as part of its Digital Single Market (DSM) Strategy, the Commission published a Communication, accompanied by a package of legislative proposals, aimed at increasing cross-border e-commerce in the EU by enabling consumers and companies to buy and sell products and services online more easily and confidently (the e-commerce package).

2.3The e-commerce package comprises the following ‘three-pronged plan’:

2.4The Communication explains how each of the proposals presented under the e-commerce package interact, and how they relate to other DSM initiatives, including two legislative proposals relating to consumer digital contract rights, and forthcoming proposals on VAT simplification expected later this year.

2.5The accompanying e-commerce legislative proposals are the subject of separate Report chapters.

2.6The Parliamentary Under-Secretary for State at the Department for Business, Innovation and Skills (Baroness Neville-Rolfe) infers that the Government supports the e-commerce package in principle, but notes that it is assessing the detail of each proposal and will update the Committee on the Government’s position in due course.

2.7Since the Government submitted its Explanatory Memorandum, the United Kingdom has voted to leave the European Union.

2.8The Committee notes that the Government broadly welcomes actions to remove barriers to online trade across the EU, in order to boost jobs and growth, and has been at the forefront of negotiations to complete a DSM.

2.9In light of the outcome of the referendum, we ask the Minister to address the following issues in due course:

2.10In light of the wider questions arising from the Government’s future position on DSM initiatives, we retain this Communication under scrutiny, and draw it to the attention of the Business, Innovation and Skills Committee in view of their inquiry on the UK digital economy and to the Culture, Media and Sport Committee.

Full details of the documents

Commission Communication: A comprehensive approach to stimulating cross-border e-commerce for Europe’s citizens and businesses: (37817), 9610/16 + ADD 1, COM (16) 320.

Background

The DSM Strategy

2.11The completion of a DSM is Commission President Juncker’s second highest political priority, aimed at creating jobs and growth in the EU.

2.12The Commission published its strategy for boosting the digital single market in May 2015. It proposed a mix of legislative and non-legislative initiatives to be tabled by the end of 2016, with initiatives centred on three ‘pillars’.

Key DSM proposals

2.13Alongside the e-commerce package, the Commission has also published:

2.14These proposals are the subject of separate Report chapters.

Views of the European Parliament

2.15Commission Vice-President Andrus Ansip, responsible for the DSM, debated the proposals with MEPs during the European Parliament’s mini-plenary session in Brussels.46 The proposals were welcomed by the majority of MEPs. The European Parliament will act as co-legislator with the Council on the package of legislative proposals.

The Commission Communication of 30 May 2016

2.16The Communication sets out three objectives for its e-commerce package:

Geoblocking proposal

2.17The Commission is proposing a Regulation to ensure that consumers seeking to buy products and services in another EU country are not discriminated against in terms of access to prices, sales or other conditions on the basis of their nationality or place of residence or establishment, unless this is objectively justified for reasons such as VAT or public interest provisions. The aim is to ensure that consumers from other Member States will therefore be able to buy under the same conditions as local customers, improving their access to goods and services in the Single Market.

Parcel delivery proposal

2.18The Commission is proposing a Regulation that encourages competition and makes the regulatory oversight of the cross-border parcel delivery services market more effective and consistent. It considers that increasing transparency in the parcel delivery market will help to lower costs for consumers and small businesses, as well as create new opportunities for operators to participate more actively in the cross-border market.

Proposals to increase consumer trust in cross-border e-commerce

2.19The Commission is proposing a revision of the Consumer Protection Cooperation (CPC) Regulation, to give more powers to national authorities to enforce consumer rights and address practices that are detrimental to consumers. It considers that stronger and more coherent enforcement of consumer law across the Single Market will increase legal certainty.

2.20The Commission is also publishing updated guidance on unfair commercial practices. It clarifies the scope and application of the Unfair Commercial Practices Directive (UCPD)47 in commercial online practices, including for online platforms, travel and transport, environmental claims, and financial services and immoveable property. While the guidance is not legally binding, it may influence how UCPD is interpreted and its relationship with other consumer protection law.

Other initiatives

VAT simplification

2.21The Commission also commits to reducing the administrative burden on businesses arising from different VAT regimes and intends to present a proposal on VAT simplification later in the year.

Digital consumer contract rights

2.22The Commission notes that proposals to simplify cross-border contract rules for businesses and consumers, published in December 2015, which intend to harmonise key mandatory consumer rights applicable to the supply of digital content and the online and other distance sale of goods, are a key part of its wider strategy to increase consumer trust in cross-border online transactions.

The Minister’s Explanatory Memorandum dated 15 June 2016

2.23The Minister notes that the Government generally welcomes measures to boost the DSM, considering it “an area where the EU can add value in supporting growth, employment and productivity”. She notes that the Government has urged the Commission to “focus on reducing the burdens of regulation on business, and a continued focus on better regulation and evidence based policy making”.

2.24She also implies that the Government is likely to support proposals to open up e-commerce, following the Prime Minister’s call in January 2015 for the EU to take action to enable consumers to “shop anywhere, at any time, and buy from the widest range of providers. Consumers should not be penalised for using digital services or buying goods outside their home Member State, and they should be given confidence that their rights will be protected”.

2.25The Minister does not provide any analysis of the proposed measures themselves, noting that:

“A more detailed assessment of the individual legislative proposals relating to e-Commerce is currently under consideration and updates will be submitted to Parliament in due course.”

2.26The Minister expects the e-commerce package to be “taken forward by the incumbent Dutch Presidency and continue to be negotiated in the Council under the Slovak Presidency” and that the Commission will present a proposal on VAT simplification in the autumn.

Previous Committee Reports

None.


45 Geo-blocking refers to commercial practices that prevent online customers from accessing and purchasing a product or a service from a website based in another Member State, or which automatically re-route them to a local site. As a result, consumers may face price discrimination (i.e. be charged more for products or services purchased online) on the basis of their IP address, their postal address or the country of issue of their credit card.

46 See EP press release.

47 The UCPD (2005/29/EC) was implemented in the UK by the Consumer Protection from Unfair Trading Regulations 2008 (SI 2008/1277). It prohibits traders in all sectors from engaging in unfair commercial practices, including misleading actions and omissions, to the extent that the average consumer would make a decision they might otherwise not have made. The Directive also prohibits aggressive commercial practices, for example pressure selling, and includes a black list of practices which are banned in all circumstances, irrespective of their effect on consumer decisions.




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11 July 2016