Earlier this week the European Commission announced a 3-prong initiative to grow total online sales within the union by reducing existing barriers and pushing for cross border fluidity. The action comes one year after the commission first announced one of its key priorities, the creation of a "Single Digital Market" within the European Union.
Three key issues the European Commission's proposal addresses are:
- Cross Border Delivery of Goods
- Consumer Protection/Unfair Commercial Practices
I've written several times over the past years on the topic of online purchasing from retailers located in a different member state. The point of those articles was to make English-speaking expats and other internationals aware that they could shop online in English even when they lived in a member country where online shops are only offered in the local language when they don't speak it. Such is the case here in the Netherlands where the vast majority of retailer websites are available only in Dutch. There have been developments in online retailing here in Holland since my arrival back in 2009, but the language issue hasn't changed much. The process with using a local language website to make a purchase can be cumbersome even if you use a translator in your browser. This can especially be a problem during checkout when most webshops switch from http protocol to https. Browser translators often don't work well when trying to translate a secure page. This stage can be the most critical since since it involves payment for goods. Having to go through it in a language you don't speak can become stressful. This was a key reason why I wanted to make other expats aware there is an alternative, which was buying from a retailer in another member state which has an English-language website and offers delivery to the Netherlands.
The problem was the majority of retailers didn't offer cross-border delivery, which was and is rather surprising considering free flow of goods is a key advantage of being an EU member. More retailers offering this would result in the consumer having access to more choices which might also include better pricing than having to order form a retailer within their own country. Because this is currently not the case, consumers in one location may be suffering location discrimination. The goal of the EC is to remove such consumer discrimination within the Union.
Explanation of what the new European Commission E-commerce Proposal calls for…
As mentioned above, the EC proposal to accelerate total online sales across the Union targets three current barriers…
- Geo-Blocking is when a consumer living in one member state tries to access a business' website in a different country and gets redirected back to the website for the country the person is living in. The consumer may have wanted to compare prices across member states in order to secure the best price. By being diverted back to the website for the country they are in, it basically discriminates against that consumer if a lower price is being offered by the same business in another member state. The proposal calls for a ban on geo-location diversion.
- Cross Border Delivery of Goods is often given as the reason why a retailer doesn't want to offer delivery to other countries within the Union. In their research, the European Commission determined the actual additional shipping cost is far less than retailers are being charged by shipping companies and parcel forwarders. The EC proposal aims to increase regulatory oversight of parcel delivery service providers including greater price transparency of through the publication of domestic vs. cross-border shipping rates.
- Greater Consumer Protection and enforcement of regulations against Unfair Commercial Practices is the third major initiative within the EC proposal. The EC determined during its research that while specific laws are already in place to protect consumers, there are not enough resources in place or authority given to enforce these protections when it comes to cross-border commerce. The proposed revisions to the current regulations will provide enforcement agencies in the EU member states with the authority and infrastructure to work across borders more quickly and efficiently to address unlawful online practices.
For more information about the European Commission's recently announced proposed initiatives to aid in the further development of a single digital market within the European Union, click here.