Saturday, June 21, 2014

ECOMMERCE & NEW EU RULES

From the Wall Street Journal--

Selling to Europeans Online? New Rules Are Now in Effect
 

By Ese Erheriene
Companies doing business online in the EU—including ones based overseas—face a new set of consumer-rights rules.
AFP/Getty Images
Businesses in Europe have welcomed with caution a new set of European Commission rules designed to protect the rights of online shoppers, which came into force on Friday.
The Consumer Rights Directive aims to promote cross-border transparency by enforcing more strictly the ways in which retailers can behave online.
This includes increasing the “right to a change of mind” period for customers to 14 days from seven (now including digital products); banning the use of preticked boxes on websites; and requiring businesses to process returns within 14 days of cancellation.
“We certainly want to first of all boost consumer confidence, because these days only 31% of consumers feel confident when shopping from another member state, because they are not sure of the rights they have,” said Mina Andreeva, a commission spokeswoman.
The commission also hopes the new rules will boost cross-border trade, Ms. Andreeva said. “Today only 25% of traders sell cross-border, because the majority find it too costly to comply with the different rules,” she said. Under the new directive, transaction fees across European Union borders for businesses are expected to drop, and there are new exemptions for small-to-midsize businesses and craftsmen providing services under a certain value.
All businesses that target EU customers are subject to the directive, whether the business is based in the EU or not. For example, a U.S. retailer selling goods on its Dutch-language website would be considered to be targeting Dutch customers and would be subject to the rules.
The British Retail Consortium said it had worked with the commission, the European Parliament and the U.K. Department for Work, Innovation and Skills on the directive. “The BRC is confident that this new directive will not result in a more bureaucratic system, but will rather produce a clearer environment in which business and consumers can interact,” a consortium spokesman said.
However, while generally positive about the initiative, many businesses are concerned about the extra costs of modifying their websites to comply with the new rules.
According to the commission’s own impact assessment, existing businesses can expect to spend €2,153 ($2,921) on average to implement the changes, while new businesses will have to pay €5,526. However, the commission said that is a fraction of the previous cost of dealing with 27 EU states individually, which it estimated was €70,526. The estimate doesn’t include Croatia, which wasn’t yet an EU member state when the proposal originated.
“I think initially a lot of retailers haven’t been happy on the basis that they’ve got changes to make and in the short-term it’s going to actually cost them some money,” said Phillip Smith, U.K. director of Trusted Shops GmbH, which offers accreditation to EU online retailers. “But when we explained that long-term this is great for [them] they’re actually in favor of it because it gives them a new opportunity.”