Consumers tread warily in the online market

Date: 22/04/1999

By Renée Cordes

ARMED with only a mouse and a credit card number, it is now possible to buy everything from groceries to houses over the Internet.

But it is not as easy, as EU regulators are discovering, to strike the right balance between protecting consumers while giving the fledgling industry an incentive to grow.

The European Commission is trying to do just that with its proposals for new EU-wide rules to govern electronic commerce. The aim, say officials, is to provide legal clarity which will encourage both consumer trust and investment in online services.

Industry and consumer groups agree on the need for regulation, but are divided on how far it should go.

By far the most contentious issue is the Commission's proposal to require service providers to abide by regulations in the country where they are based, rather than in the country where they are offering the service. This is commonly known as the 'country of origin' principle.

European consumer organisation BEUC fears that under the draft proposal, service providers would be able to bypass stringent national regulations in many cases.

" What we fear is that in some member states where there are higher standards, they will be undermined," said BEUC's Ursula Pachl. "We see this maybe as an inappropriate measure in the global environment."

But industry experts argue that the country of origin principle is fair given that, under EU law, consumers can only seek legal redress against a company in the country where it is based.

" Any derogation from this principle will complicate life for e-commerce actors, who will need to ensure that their services conform with the 15 different legal regimes," said the European Telecommunications Network Operators' Association.

Internet service providers are also calling on MEPs to support a ban on junk e-mails, which they say merely annoy customers, clog up networks and are paid for by the providers.

EuroIspa, the industry's EU lobby group, wants the practice, known as 'spamming', to be banned in the directive and claims it has already won the support of a number of key MEPs in its campaign.

Article forms part of a survey 'Converging technologies', p13-20.