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International e-commerce needs regulation. But not every law makes sense.
International e-commerce needs regulation. But not every law makes sense. Asendia in talk with E-Commerce expert Patrick Kessler, President of the Swiss Mail Order Association (VSV).
"Regulation is playing a growing role in international e-commerce," said Patrick Kessler. And there are a host of rules to follow, too. The main ones:
There is a big difference between the B2C and B2B markets, too. "In B2C e-commerce, for example, you have to follow the laws that apply at the consumer's place of residence," explained Kessler. "In the B2B sector, you can specify the governing law by contract."
“There is a big difference between the B2C and B2B markets when it comes to law and ordering for e-commerce.”
Unfortunately, EU directives (Consumer Rights Directive, etc.) have not standardised legislation. "Ideally, the countries would adopt the EU's directives into law without changing them at all," said Kessler. "Since each country can pass stricter laws than the directives, however, they often add even more regulations. In other words, international e-commerce businesses still have to comply with 27 different laws across the EU." Germany, for example, has strict rules on return costs: until next year, e-commerce providers still have to pay for return costs for merchandise worth more than EUR 40. In Spain, data protection laws are particularly tough. "The fines for violations are very high."
Some regulations obviously make sense. "Others, such as the 'button law', are more about consumer paternalism than protection," said Kessler. "This law, which requires retailers to explicitly identify which button you click to make a purchase, was actually passed to stop subscription scams. Now, it also applies to normal e-commerce." This makes no sense, he explained. If you go to a bricks-and-mortar store, the salesperson won't ask you if you really want to buy a particular product. "These regulations make life harder for retailers and consumers, but don't prevent abuse. After all, online scammers don't stick to the law."
Facing regulatory overload, many companies have had enough and have turned to a proven tool: goodwill. "If you are selling normal products, it can be much easier and cheaper to rely on goodwill, depending on your product range." This is no excuse for not obeying the laws, but some companies, especially small and medium-sized businesses, struggle to keep up with all the changes happening in a fast-moving legal environment. "And that's something that legislators and politicians seem to forget."
National associations are a good place to start. They generally have deep expertise in e-commerce. A certification with a Trusted Shops seal is also a good idea. It often helps inspire customer trust and provides legal certainty. If your case is complicated, though, the best choice is to consult an attorney.
About Patrick Kessler
Patrick Kessler has been the President of the Swiss Mail Order Association (VSV) for five years. This industry organization represents around 150 corporate members that represent around 60 per cent of all the e-commerce and conventional mail order business in Switzerland.