No deal in sight on e-commerce rulebook to drag on

Date: 09/09/1999

By Peter Chapman

NEGOTIATIONS on the EU's electronic commerce rule book will drag on into the new millennium as the complex legal debate over key provisions continues, according to diplomats.

The Finnish presidency is keen to reach agreement on the issue in time for a meeting of single market ministers in December, and will hold talks with national experts next week.

Helsinki has already produced one text in response to the European Commission's original proposals which contained what one UK diplomat described as "cosmetic changes". But diplomats say the Finns are waiting for the outcome of a series of November hearings on separate Commission plans to update two international treaties linked to e-commerce before wrapping up a deal.

The hearings concern Commission plans to amend the EU's rule book to add changes already agreed to the Brussels conventions governing consumers' ability to seek legal redress in contractual disputes in their own courts and proposals to amend the Rome convention which governs the law in such cases.

Critics say the updated Brussels Convention targets e-commerce transactions and could lead to the single-market principles in the draft directive being watered down.

The proposed legislation, like other EU single market rules, would allow firms to sell goods and services across the Union over the Internet as long as they complied with regulations in the country where they were based. This is known as the country of origin principle. But many industry groups fear the changes to the Brussels and Rome conventions would force firms to meet rules in the countries where their customers are based.

"The Finns want an agreement at the December Council, but there is no chance that the directive will be ready by then," said one EU source, pointing to the complexity of the debate over the country-of-origin issue.

In the meantime, say experts, governments will offer little response to the Commission's latest proposals on e-commerce, which were updated last week to take account of the European Parliament's views on the issue.

The Commission bowed to MEPs' demands for special rules to stop companies sending reams of commercial e-mail known as 'spam' to Internet users. But it refused to water down its proposals to protect Internet service providers who act as intermediaries in the technological process from liability for abuses of copyright and other rules.

Doubts over the e-commerce timetable come as British academics warn that the EU is failing to keep pace with the fast-moving information super-highway. Warwick University researchers say Europe is too slow to enforce laws in member states and that the Internet straddles across too many aspects of European law to provide a clear and concise set of legislation.