Vitorino must act to stop ‘Internet nightmare’

Date: 01/08/01

By Peter Chapman

BUSINESSES are calling on Justice Commissioner António Vitorino to tear-up planned rules they claim would make trading on the Internet a legal nightmare.

The International Chamber of Commerce - whose members include corporate giants from Coca-Cola to Nestlé - is concerned that Vitorino's proposals would mean that the laws of the consumer's country would apply in cross-border e-commerce disputes.

ICC e-commerce manager Ayesha Hassan said this would undermine the EU's single market approach, which allows firms to operate in any member state provided they abide by regulations in their 'country of origin'.

Small and medium-sized companies would risk being driven off the Internet for fear of expensive lawsuits far beyond their own borders. "Regulators must abandon the country-of-destination criterion for business to consumer disputes if they do not want to discourage companies from getting seriously involved in online selling directly to consumers," she said. "While the country-of-destination principle may be right for specific types of disputes, using it as a blanket rule would be a serious impediment."

She said that when e-business disputes arise, consumers should first seek redress from the company. If that fails, she added, the remedy should be alternative dispute resolution (ADR) through independent arbitrators or the company's trade association. Legal action should be the final resort, she added.

Vitorino's aides claim the justice commissioner has yet to finalise his proposal on the subject, dubbed 'Rome II' because it updates an existing international law treaty with the same name.

However, they admit they have been put under pressure to reconsider the country of origin issue. The ICC's involvement - before the plans are officially unveiled this autumn - is a sign of growing tensions over the plan.

Industry is keen to avoid a repeat of a similar scenario two years ago when Vitorino caught companies on the hop with proposals to allow customers to sue foreign firms in local courts.

This time his critics flagged their opposition as soon as leaked drafts of Rome II emerged earlier this year. Among those opposing the plan are publishers, who fear they could be sued in foreign courts for articles published in newspapers and on websites that passed legal requirements in their home country.

Dietmar Wolff, director of the European Newspaper Publishers' Association, said the proposals would cause "major problems".

MEPs have criticised Vitorino for failing to live up to a promise to consult more widely on Rome II than he did for the earlier proposal, known as the Brussels Regulation. Although the Portuguese commissioner has promised to listen to views on the issue, MEPs are denied a formal say.

And plans for a green paper on the issue have been scrapped because Vitorino claims it would take too long and cost too much money.

Businesses are calling on Justice Commissioner António Vitorino to tear up planned rules they claim would make trading on the Internet a legal nightmare. The International Chamber of Commerce is concerned that Vitorino's proposals would mean that the laws of the consumer's country would apply in cross-border e-commerce disputes.