MyFondia VirtualLawyer
March 16, 2018

E-Commerce Trader in the EU: Are You Compliant with the EU’s Online Dispute Resolution (ODR) Rules?

On January 9, 2016 the Regulation (EU) No 524/2013 (herein after “Regulation”) on online dispute resolution for consumer disputes entered into force. A few weeks later, on February 15, 2016 the EU’s own online dispute resolution “ODR” platform was launched, offering a simple, efficient, fast and low-cost out-of-court solution to disputes concerning online sales and service contracts concluded between consumers resident and traders established in the EU. According to the Regulation all e-commerce traders selling goods or services in the EU to EU customers, have the obligation to add information regarding ODR to their site or application, along with a link to the EU’s ODR platform.

Most importantly, the Regulation sets the obligation for e-commerce traders to:

  1. Provide on their websites an electronic link to the ODR platform, which shall be easily accessible for consumers;
  2. Provide their email address in order for consumers to have a first point of contact with them;
  3. Inform consumers of the existence of the ODR platform and the possibility of using it for dispute resolution, but only in case of traders that are committed or obliged to use one or more alternative dispute resolution entities to resolve disputes with consumers. Moreover, such information, where applicable, shall also be provided in the general terms and conditions applicable to online sales and service contracts.

The violation of these obligations entails penalties, the amounts of which are determined by each Member State. Nevertheless, currently the vast majority of EU traders are in breach of EU consumer ODR law. A recent study conducted by the European Commission showed that, the on-going rumours on mass non-compliance within Member States are true, as approximately 72% of EU traders are non-compliant through absence of any link to an ODR platform. Moreover, governments of the Member States have shown gross lack of effort in creating awareness of the rules on ODR and the existence of the EU’s ODR platform.

The report shows that mystery shoppers were asked to find a link as if they already had a complaint. The report claims that by placing the link within Terms and Conditions or complaint handling pages, the 'easily accessible' requirement is met, as that is where a consumer might navigate if he or she have a complaint. The objective of the legislation was to encourage cross-border consumer e-commerce within the Single Market by building confidence before a purchase is made and any kind of complaint risen, by showing that an approved ODR service is available. How many consumers really read the terms and conditions before making a purchase online, if they do not have a specific reason to do so? Does this promote the use of ODR and the EU’s ODR platform?

The cold fact is that, a very few consumers buying from an EU trader are aware of the EU’s ODR platform. The numbers a not likely to radically rise if firstly, traders do not start complying with the Regulation and secondly, displaying the link directly on their home page. The use of ODR will undoubtedly enable businesses to enhance dispute resolution for all customers, including consumers, and by so, enhance business as well. ODR has huge potential to transform all aspects of dispute resolution, and hopefully more and more people will see that technology is the key to the future of dispute resolution.

The Commission’s study can be found from here.