The new year 2016 welcomes all online retailers based in the EU with a change in the law. From January 9, 2016, EU Regulation No. 524/2013 on online dispute resolution for consumer disputes will come into force. This entails new information obligations for store operators who conclude online sales contracts or online service contracts with consumers (B2C). In this article, we would like to inform you about the background and innovations as well as the specific measures that you should implement in your online stores by the weekend.
Background to the new legal regulations
The EU Commission stated and explained the following in justification of its legislative initiative in 2013:
In 2010, one in five consumers in the EU encountered problems when purchasing goods or services within the internal market; the resulting financial loss is estimated at 0.4% of total European GDP. Very few of the consumers affected tried and succeeded in enforcing their claims. Good and transparent alternative dispute resolution procedures are estimated to save EU consumers EUR 22.5 billion per year, equivalent to 0.19% of EU GDP.
Accordingly, a new system will now be introduced across Europe in 2016 that offers options and procedures for settling disputes arising from consumer transactions out of court. Participation in this new dispute resolution procedure is voluntary for all parties involved and is therefore not mandatory for online retailers (but the obligation to provide information is, see below).
The EU Commission assumes that the new regulations will not only strengthen consumer rights, but also create opportunities for online retailers to improve their customer service and positively differentiate themselves from the competition by participating in the new consumer dispute resolution scheme.
However, in view of the not inconsiderable costs associated with dispute resolution, which are usually borne by the trader, it is doubtful to what extent such voluntary dispute resolution offers actual advantages for the trader.
This is coming: Dispute resolution platform and dispute resolution bodies
Specifically, the amendment to the law adopted by the EU and prescribed by legal acts to the member states provides for the creation of two key instruments:
1. the provision of an online dispute resolution (ODR) platform by the EU.
This ODR platform is intended to be an interactive website and serve as a central point of contact for consumers and traders who wish to settle disputes arising from online legal transactions out of court. Multilingual online forms can be used to submit complaints, which will be forwarded to the competent bodies for alternative dispute resolution (see point 2). Irrespective of their participation in alternative dispute resolution, online traders must place an easily accessible link to the ODR platform on their website (see below: What to do now …).
2. the creation of independent dispute resolution bodies for alternative dispute resolution (ADR) by the Member States.
These ADR bodies must be professionally competent, impartial, independent and transparent in accordance with the Directive and with regard to the dispute resolution procedure. Compliance with these requirements must be verified by public authorities.
Further details and requirements for dispute resolution procedures in Germany are regulated in the Consumer Dispute Resolution Act (VSBG), which was passed by the German Bundestag on December 3, 2015. However, following the expected approval of the Bundesrat in the coming weeks and subsequent publication in the Federal Law Gazette, this law will not become legally binding with regard to any information obligations until March 2017 at the earliest. Please read the last section in this article (see below: This should be added later …).
Resulting information obligations for store operators
Both the EU Regulation and the new Consumer Dispute Resolution Act impose a number of information obligations on online retailers. We will now show you which of these obligations you should fulfill immediately and which you may have to deal with later.
What to do now: Link to the OS platform
Regardless of whether you decide to participate in the alternative dispute resolution procedure or not, as a B2C trader you are obliged to provide a link from your website to the new ODR platform when the EU regulation comes into force on January 9, 2016. Bizarre: The new ODR platform does not even exist yet and is not expected to be available until February 15, 2016, as the EU Commission announced here.
Even if it is questionable whether an infringement of competition law can even exist without an existing link, you should make sure and include the following notice in your store in the meantime. As the store operator blog suggests in its article, please use your legal notice or your terms and conditions under “Complaints procedure”:
The European Commission will soon provide a platform for online dispute resolution (OS). We will publish the link here as soon as the platform is available.”
Important: As soon as the link exists, you must adapt this notice immediately in order to prevent the risk of a warning under competition law.
Therefore, please make a note of February 15, 2016 as the expected date for setting the link. Alternatively, our JTL Facebook channel will provide you with a timely reminder to make the necessary adjustments.
This would have to be supplemented later: so-called "general information obligations"
When the aforementioned Consumer Dispute Resolution Act (VSBG) comes into force, further information obligations for online retailers will come into effect. However, depending on the time of publication in the Federal Law Gazette, these obligations will not have to be fulfilled until one year later and therefore not before March 2017.
According to the draft law, entrepreneurs who employed ten or fewer people on December 31 of the previous year are exempt from the obligation to provide information. This means that entrepreneurs must check at the beginning of the calendar year whether they are even obliged to post further information on their website or to provide information together with their Terms and Conditions.
The draft law then distinguishes between general information and information that is only to be provided after a dispute has arisen and accordingly only applies to traders who will participate in the dispute resolution procedure.
Based on the draft law, the “general information obligations” will include informing consumers on your website of the extent to which you are willing or obliged to participate in dispute resolution proceedings before a consumer arbitration board. Only if this is the case will further information obligations apply.
As soon as the final legal text of the VSBG is available and in good time before you have to make any adjustments to your store or terms and conditions, we will of course inform you here in the blog about the necessary procedure. Please also note that our comments in this and future blog posts do not constitute legal advice.
For further information on this topic, we have already referred you to the store operator blog. You can also find a very detailed and differentiated explanation in the article by the IT law firm from Munich.
Good thanks for your attention!
