Year’s journey from Brussels to Rome ends in cul-de-sac

Date: 19/07/01

FOR e-commerce firms in 2000, there was no contest in the 'dumbest law of the year' competition. The runaway winner was a draft law known as the Brussels Regulation, which they warned would scupper their fledgling industry - in Europe at least.

Jostling for pole-position this year will be another arcane draft law known as 'Rome II'. The similarities between the two rules are startling.

Whereas the controversial Brussels Regulation dictates which courts should have jurisdiction in cross-border legal disputes, Rome II would set out which country's laws take precedence in such cases.

Critics rounded on the Brussels Regulation, drafted in private by Justice Commissioner António Vitorino's officials and debated behind closed doors by justice ministers, many of whom would appear to still favour carrier pigeons rather than e-mail for urgent communications.

The new rules, opponents argued, would leave anyone with a website vulnerable to lawsuits in any one of the EU's 15 member states. This would put off all but the most determined small businesses from

venturing online and would leave the web as an option only for the big multinationals with the financial clout to go to employ teams of lawyers.

After one of the fiercest lobbyist campaigns in recent Union history, member states fudged and said website owners can only be brought to justice abroad if they are touting for business in a particular country.

But legal experts say the protection the deal offers is far from watertight. Twelve months on and Rome II is being tarred with the same brush as the Brussels Regulation.

The measure sets out which laws take precedence in cross-border disputes which do not involve a contract - for example in a car crash between two EU citizens in a third country.

But critics fear it would also oblige firms to comply with foreign rules and regulations even if they operate perfectly legally at home. Publishing companies with online editions are particularly concerned about falling foul of possible defamation and unfair competition rules as a result. The end result could be more legal battles in foreign courts for firms who dare to use the sales opportunities offered by the Internet.

Worse, critics say Vitorino has failed to learn the lessons of the Brussels Regulation fiasco, in which industry and MEPs were denied a formal say in proceedings - and were only invited to a last-minute hearing.

This follows his decision to go straight to a draft regulation instead of launching a Green Paper on the issue. Vitorino's aides say nothing is yet etched in stone - and that the Commissioner will listen to comments from interested parties regardless of a Green Paper..

Critics will hope this extends to Single Market Commissioner Frits Bolkestein. Diplomats say he has told Vitorino he won't support the rules unless e-commerce is ring-fenced from the proposals.

Article forms part of a survey on e-commerce.