Finns push for deal on e-commerce rule book

Date: 07/10/1999

By Peter Chapman

E UROPEAN firms anxious to jump on the electronic commerce bandwagon, and those already enjoying the ride, are waiting anxiously for the outcome of discussions on two key draft EU laws.

The European Commission's proposals for rules on copyright in the information society are aimed at filling in the gaps in Union law created by the digital revolution, while planned rules on e-commerce seek to ensure businesses venturing online do not get tangled up in red tape.

These proposals are widely regarded as two of the most complex pieces of legislation ever drafted by the Commission. Despite this, the Finnish presidency insists it has high hopes of getting member states to reach broad agreement on them in time for a meeting of internal market ministers in December.

However, other EU diplomats say governments are unlikely to strike a deal before the end of this year, predicting a particularly tough time for the e-commerce directive. "The Finns want an agreement at the December meeting, but there is no chance that it will be ready by then," said one.

The Finns are nevertheless seen as well placed to steer the debate on these highly technical issues, given that the country is one of the Union's Internet pioneers and its mobile phone giant Nokia makes more electronic toys than even its neighbour in Lapland, Santa Claus.

The EU's draft copyright directive produced one of the most glamorous lobbying campaigns in Union history as MEPs prepared for a first-reading vote on the proposals in February.

They were out in force again in May as the European Commission worked on a revised text taking on board some of the amendments demanded by the Parliament, while ignoring others.

Pop stars like Jean-Michel Jarre and the Corrs pleaded with MEPs and Commission officials to give the industry the right to authorise use of their works on the electronic superhighway. Other less glamorous, but no less worthy, interest groups argued for special exemptions to allow libraries, the disabled and other often-ignored groups to make copies for free. At the same time, telecoms operators pleaded with the policy-makers not to make them liable for temporary copies' made automatically, they claim, as data travels across the Internet. The telecoms firms pleas failed to sway MEPs, but they scored a key victory later when the Commission rejected the Parliament's move to bring them into the line of fire.

The lobbying roadshow will only swing into action again when the Finns intensify the pressure on member states to reach agreement ahead of the December meeting.

But while the copyright issue has 'disappeared' into behind-the-scenes meetings between national experts, a public row has erupted over the related e-commerce directive. This proposal aims to entrench single market principles in the regulatory framework for e-commerce. It also aims to limit online service providers' liability for illegal content which may travel over their networks, provided they take down offending material once they are aware of its existence.

Like other EU single market rules, the proposal would allow firms to sell goods and services across the Union over the Internet as long as they comply with the rules and regulations in the country where they are based. This is known as the country of origin principle.

But industry critics fear two entirely separate pieces of international legislation could scupper this approach.

Moves are afoot to add changes to the Brussels Convention, which sets out consumers' rights when seeking legal redress in cross-border contractual disputes in their own courts and now covers online deals, to the EU's rulebook. Proposals are also on the table to amend the Rome convention which governs the applicable law in such cases.

Critics fear that ultimately, these changes would force firms to comply with the rules in force in the countries where their online customers are based. Foreign traders could also be obliged to abide by legislation such as Germany's unfair competition rules, which place huge regulatory burdens on firms.

The European Commission's proposals for rules on copyright in the information society are aimed at filling in the gaps in Union law created by the digital revolution, while planned rules on e-commerce seek to ensure businesses venturing online do not get tangled up in red tape. Part of a survey 'Challenges for industry', p13-20.