Information Governance

New EU Information Requirements Regarding Online Dispute Resolution for Online Retailers

Companies established in the European Union that offer goods or services online to consumers have to update their web and mobile site documentation to address new requirements pertaining to alternative dispute resolution. The new rules are fairly complex as they stem from an EU Regulation (which applies directly and immediately to companies in all EU Member States) and an EU Directive (which was supposed to have been implemented by July 9, 2015, but has not yet been implemented in all EU Member States and will likely be implemented with local differences).

Who Is Subject To The New Requirements?

Retailers that are established in the EU and sell goods or services online to consumer residents in the EU ("EU Online Retailers") will be subject to the new requirements. Operators of consumer online marketplaces established within the EU ("EU Online Marketplaces") will be subject to some of the new requirements.

Companies that sell to businesses or professionals only are not affected. Also, companies that are not established in the EU and sell remotely to consumers in the EU are not directly subject to the new EU rules. However, companies outside the EU may be considered "established" in the EU under national laws or court interpretations if their affiliates in the EU (e.g., subsidiaries acting as sales and marketing service providers) are closely involved in the business operations of the non-EU entity.

Information Obligations Resulting From The ODR Regulation  

On January 9, 2016 the EU Regulation No. 524/2013 on online dispute resolution for consumer disputes ("ODR Regulation") entered into force imposing new information requirements on EU Online Retailers and EU Online Marketplaces. EU Online Retailers and EU Online Marketplaces are required to provide on their websites an easily accessible link to the ODR platform (http://ec.europa.eu/consumers/odr/) provided by the European Commission. EU Online Retailers must also provide their email address. A logic place for such information would be the imprint/about us section. The information obligation is mandatory even if the EU Online Retailer/ EU Online Marketplace is neither committed nor obligated to use an alternative dispute resolution entity ("ADR entity").

To the extent EU Online Retailers are committed or obligated to use an ADR entity to resolve disputes with consumers they must also (i) in any offer email (if offers are made by email) provide the link to the ODR platform, and (ii) inform consumers about the existence of the ODR platform and the possibility of using the ODR platform for resolving their disputes. The information must also be provided, where applicable, in the general terms and conditions for online sales and service contracts. Therefore, EU Online Retailers that are required under national law, or that have voluntarily committed, to use an ADR entity, must also amend their general terms and conditions accordingly.

The ODR Regulation provides that the Member States shall determine effective, proportionate and dissuasive penalties for non-compliance with the ODR Regulation

Information Obligations Resulting From National Implementations Of The ADR Directive

The ODR Regulation must be considered in connection with the EU Directive 2013/11/EU on alternative dispute resolution for consumer disputes ("ADR Directive"). The ADR Directive also contains information requirements for retailers to be complied with on websites and in general terms and conditions (as applicable). These include obligations to inform consumers about the ADR entity by which the retailer is covered and whether the retailer commits or is obligated to use an ADR entity to resolve disputes with consumers. Since a Directive must be implemented into national law the details of such information requirements (and further information requirements, if applicable) are imposed or will soon be imposed by national laws implementing the ADR Directive and will likely vary between EU Member States.

Contributors: Michaela Weigl, Lothar Determann & Holger Lutz