EU Threatens Online Retailers

Small businesses that sell over the internet could be crippled by increased costs or leave themselves open to significant legal risk, if an amendment to European Union (EU) legislation known as Rome I goes unchallenged.

In short, under the proposed regulation aimed at harmonising contractual agreements, companies selling to consumers in other EU member states would have to comply with consumer law in the purchaser’s home country. 

All very well, if you’re a multinational with an international legal department.  Quite a different matter, if you’re a sole trader, eBay entrepreneur or small business trading online and now find you must understand and comply with consumer legislation in 27 different member states. 

Of course, you could just cross your fingers and hope you don’t have a legal issue with a customer in another European country.  But you then risk the financial implications of being successfully sued in a country with whose legislation you’ve not complied.

The Federation of Small Businesses (FSB) and Heather Gorringe have both highlighted the threat recently.  It’s astonishing to me that this hasn’t been picked up more widely.

In following up, I spoke to Riccardo Mosca, official EU Commission spokesperson at the Justice, Liberty & Security directorate which drafted the amendment.  He said:

Yes, I think there is a problem here.  A number of small business organisations have already raised issues.

Here’s a copy of a Q&A from the Commission which, although it is a little opaque, does indeed confirm there is an issue for any firm trading within the EU.

The regulation, however, is now out of the hands of the Commission and with the European Parliament and Council of Ministers.  It’s therefore vital that the issue is raised with MEPs.  Email or write to your local MEP now and, if you need more details or advice, contact the FSB.

Alex is the founder and editor of SmallBizPod, the UK's first podcast dedicated to small business, start-ups and entrepreneurship. Alex writes about topical small business issues, entrepreneurs and anything else that catches his eye here on the small business blog. http://www.smallbizpod.co.uk