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E-commerce

By Buju, Stanciu & Asociații

The challenges of an e-commerce business

Over the past two years, the pandemic has accentuated a trend already present on the global market, namely the emergence of a multitude of online businesses and the strong growth of existing e-commerce businesses. The ability to sell online provides access to an international market and, implicitly, to a very large number of customers. However, starting or running an e-commerce business is not without its challenges. From the information that must be displayed on an online platform, to the processing of personal data, or the collection of VAT, online trade is subject to rigorous regulation both at national and at European level. In 2020, under the coordination of the European Commission, consumer protection authorities carried out, by way of a sweep, checks on 500 online shops in the territory of the member states, selling clothes, furniture, or electronic equipment[1]. Following these checks, it emerged that two thirds of the audited companies were not complying with the legislation in force and were not respecting consumer rights. The most common issues identified during the review consisted of: failure to inform consumers of the conditions for returning a product and the time period within which it may be returned, failure to provide information on delivery costs, failure to provide information on how potential disputes are to be resolved, breaches of the rules on the processing of personal data, and breaches of the rules on blocking certain consumers' access to webpages on the basis of their location (geo-blocking). Moreover, with the adoption of Directive (EU) 2019/2161, informally known as the "Omnibus" Directive, penalties for breaches of consumer rights can reach 4% of turnover, or even up to EUR 2 million where turnover is not known. It should be noted that the Directive entered into force on 7 January 2020, and member states are required to transpose its provisions into national legislation by 28 November 2021. After that date, the Directive will become automatically applicable under national law, starting 28 May 2022. It should be mentioned that the Directive regulates a number of aspects of digital trade in respect of which, until now, there was a legislative vacuum. One matter of interest is the extension of the notion of "price" to cover personal data provided by consumers in exchange for various online services. A well-known example in this respect is consumers' use of social media platforms. In order to benefit from these services, consumers agree that their personal data will be sold to third parties, in most cases for advertising purposes. Including the provision of personal data within the notion of price paid for these services brings a number of benefits to consumers, offering greater protection and increased control over the data sold. The Directive also imposes on traders the obligation to provide the following information, in a manner that is clear, transparent and unambiguous:

(a) general information, made available in a specific section of the online interface, directly and easily accessible from the page where the offers are presented, on the main parameters determining the ranking of the offers presented to the consumer as a result of the search carried out;

(b) whether the third party offering the goods, services or digital content is or is not a trader, based on that third party's declaration to the online marketplace provider;

(c) where the third party offering the goods, services or digital content is not a trader, the fact that consumer rights stemming from Union consumer protection law do not apply to the contract concluded;

(d) where applicable, how the obligations related to the contract are shared between the third party offering the goods, services or digital content and the online marketplace provider, without prejudice to the responsibility of the online marketplace provider or of the third-party trader in relation to the contract under any other rules of Union or national law.

In the context of the European Union's new legislative package on online trade, as well as the annual checks carried out by national authorities and by the European Commission, preventive advisory services that constantly monitor a business's compliance with national and European e-commerce legislation become essential. Drawing on extensive expertise in the legislation specific to e-commerce, Buju & Partners offers comprehensive advisory services to traders operating on the online market, including, but not limited to, verifying compliance with legislation specific to the protection of personal data, drafting the terms and conditions for accessing a website, verifying compliance with consumer protection legislation, and keeping clients constantly informed of relevant changes to e-commerce legislation. Together with our clients, we have identified innovative solutions tailored to each type of business and have prevented potential issues that would have led to the imposition of penalties. At the same time, through the articles published weekly on our page, we aim to provide relevant content that addresses the main questions or uncertainties regarding e-commerce legislation.

[1] For more information, see: https://ec.europa.eu/commission/presscorner/detail/en/IP_20_156