Synopsis: Ict:

52 4. 1. 2 Personal data protection...53 4. 1. 2. 1 Personal data protection in the online environment...

53 2 4. 1. 2. 2 Spam and the eprivacy Directive...55 4. 1. 2. 3 Cookies and the eprivacy Directive...

58 4. 1. 2. 5 Data protection Directive...59 4. 1. 3 Online gambling...60 4. 1. 4 Online pharmacies and other health issues...

63 4. 2. 1 Price comparison websites...63 4. 2. 2 Restrictions on advertising...64 4. 2. 3 Unfair commercial practices...

For instance, only 9%of consumers in 2010 (against 8%in 2009) used ecommerce across borders. 4-E-commerce can help attain regional policy objectives:

the European commission wants to explore the various reasons for the limited take off of retail ecommerce outlined in the retail market monitoring report:

and also the much wider domain of e-commerce transactions in goods and services. 11 Online retailing, online press, search engines, social networks, blogs, media streaming, online gambling and e-health

Estia et Médiamétrie//Netratings pour la FEVAD, Etude de l'impact environnemental de l'achat sur internet et dans le commerce

and sales orders made via websites or systems of electronic data interchange, excluding manually typed e-mails. 5

however, is on issues related to the E-commerce Directive and the obstacles to its implementation that have been identified.

searching for information, communicating via social networks, etc..Electronic commerce continues to grow substantially, even in the current economic crisis.

66%of internet users made purchases online, while 94%did in South korea. 16 This compares with 57%in the EU. 17 However,

Finally, m-commerce (electronic commerce conducted from a mobile phone, tablet etc. in the EU plays a more modest part in the growth of electronic commerce than in the USA and Japan.

According to a KPMG study18, the percentage of consumers who visited an online retailer site from their mobile phone increased from 10%in 2008 to 28%in 2010 against 41%in the Asia-Pacific region.

However, the use of mobile phones for financial services is more widespread: 46%of consumers surveyed said they had used them.

but contrasts with 61%for in Asia-Pacific. 14 Euromonitor International, 2010.15 Eurostat, Information Society Statistics, 2010.16 Forrester research Inc, The Global ecommerce Adoption Cycle,

15.01.2010 (using 2009 data). 17 Eurostat, Data In focus 50/2010: Internet Usage in 2010 Households and Individuals, 14.12.2010, available at:

http://epp. eurostat. ec. europa. eu/portal/page/portal/product details/publication? p product code=KS-QA-10-050 18 KPMG, Consumer and Convergence Survey IV, April 2010, available at:

http://www. kpmg. co. il/evite/3b. pdf 7 Some sectors have already been transformed profoundly by electronic commerce.

From a wider perspective, the internet economy has generated 21%of the GDP growth of the last 5 years22

Internet consumption and expenditure already exceeds the share of GDP of agriculture or energy, and its GDP is bigger than the GDP of Canada

. The"Internet stream "(which is wider than ISS because it includes telecoms) has accounted for 25%of net job creation and growth 19 Forrester consulting, May 2009, Study on"A Single Market for Information Society".

"20 Opinion of the European Economic and Social Committee on the‘Communication from the Commission to the European parliament, the Council, the European Economic and Social Committee and the Committee of the Regions A Digital Agenda for Europe, COM

PDF. 21 IMRG Experian Hitwise Hot Shops List, May 2011.22 Mckinsey Global Institute, Internet matters:

from Madrid to Moscow, the Internet is going native, September 2011, available at: http://www. bcg. com/documents/file84709. pdf 24 How the Internet is transforming the economy, a series of studies by the Boston Consulting Group commissioned by Google, 2010-2011;

Mckinsey & Company, Impact d'Internet sur l'économie française, March 2011, available at: http://www. economie. gouv. fr/files/rapport-mckinsey-company. pdf 8 in France since 2000.25 Overall, the Internet economy creates 2. 6 jobs for every

job destroyed. 26 The value of the e-commerce market per se is between € 100 and 150 billion

which is similar in the EU and the US. 27 This sector is expected to generate further growth especially as SMES come increasingly to explore the potential of"digital conversion".

covering various aspects such as data protection and consumer affairs. 2. 2. 1 The E-commerce Directive The ECD is designed to help remove obstacles to cross-border online services in the Internal Market

questions related to the Data protection Directive and gambling activities28. 2. 2. 1. 1 The Internal Market clause and establishment requirements (Articles 3-4 ECD) The Internal

from Madrid to Moscow, the Internet is going native, September 2011, available at: http://www. bcg. com/documents/file84709. pdf 27 Forrester consulting produced by DIW-econ. 28 See in particular Article 1 (5) and Recital 12 of the ECD. 9 The term

and received at its destination using electronic equipment for the processing (including digital compression) and storage of data,

The service must be conveyed from its point of departure to its point of arrival by means of electronic (processing and storage) equipment and by telecommunications means.

the service must be provided via the transmission of data"at an individual request"."This constitutes the element of interactivity

labelling and liability, classification for the purpose of protecting children37) or conditions for the delivery or the transport of goods sold via the Internet,

39 the Court recognised the screen or in a programme guide are provided not services"at the individual request"of a recipient

"and held that a national prohibition on selling contact lenses via the Internet falls, in principle, within the coordinated field of the ECD.

The country of origin of the web trader can have major consequences, for example, for their right of withdrawal.

If the web trader is established in a non-EEA country, the provisions of the ECD do not apply45

That information does not necessarily have to be a telephone number. That information may be in the form of an electronic enquiry template through which the recipients of the service can contact the service provider via the internet

to whom the service provider replies by electronic mail except in situations where a recipient of the service, who,

"46 The judgment implies that service providers cannot limit themselves to offering an e-mail address accessible for their customers through the website.

Bundesverband der Verbraucherzentralen und Verbraucherverbände Verbraucherzentrale Bundesverband ev v deutsche internet versicherung AG, ECR 2008 I-07841, judgment of 16.10.2008;

the trader's geographical address, telephone number, fax number and e-mail address, where available, to enable the consumer to contact the trader quickly

in 8%of purchases, the phone number and in 12%of purchases, the e-mail address could not be found. 48 Article 5 (2) obliges web traders,

and regulated professions (Articles 6-8 ECD) Article 6 of the ECD emphasises the need for transparency when advertisements are displayed on the Internet.

These popular services allow an internet user to enter the e-mail address of one or more"friends"who then receive a standard message e g. inviting them to visit a particular website.

Whether a message is"commercial "or not leaves room for divergent interpretations as well. 48 ECC-Net, Online Cross-border Mystery Shopping:

Case C-324/09, L'oréal v ebay, judgment of 12 july 2011, par. 95-96, available at:

I of the UCP qualifies as unfair under all circumstances is the"persistent and unwanted solicitations by telephone, fax,

These rules have been complemented by Directive 2002/58/EC concerning the processing of personal data and the protection of privacy in the electronic communications sector, most commonly known as the eprivacy Directive51,

which has become the central instrument against spam in the EU (see Chapter 4. 1. 2. 2). Article 13 of the E-Privacy Directive deals with the use of email (including sms, mms),

PDF 51 Directive 2002/58/EC of the European parliament and of the Council of 12 july 2002 concerning the processing of personal data and the protection of privacy in the electronic communications sector (Directive on privacy and electronic communications), OJ

Technological progress in combination with the increasing use of the Internet by regulated professions may require that these codes be updated. 2. 2. 1. 4 Electronic contracting (Articles 9-11 ECD) Articles 9-11

contracts concluded by electronic means should have the same validity as contracts concluded offline by"traditional"means (equivalence principle).

Article 9 of the ECD has been complemented by the Electronic signatures Directive55 which regulates the legal recognition of e-signatures (see Chapter 4. 4. 3). According to Article 10 of the ECD,

Recitals 34 and 37, ECD. 55 Directive 1999/93/EC of the European parliament and of the Council of 13 december 1999 on a Community framework for electronic signatures, OJ L 013/12, 19.01.2000;

As to compliance with the rules in Article 11,81%of purchasers received a confirmation order both on screen and by e-mail.

In 10%of purchases, a confirmation of the order was received only by e-mail and in 8%only on screen.

It would welcome the opportunity to learn more about the experiences of both internet consumers

in order to make sure that businesses adapt their websites. On the other hand, respondents to the e-commerce consultation expressed concerns that the contracting requirements of the ECD may have been legitimate and useful at the time

Article 9 of the ECD has been complemented by the Electronic signatures Directive65 which regulates the legal recognition of e-signatures

PDF 18 The E-Privacy Directive66 (2002 and 2009) complements and particularises the Data protection Directive67 with regard to the processing of personal data in the electronic communication sector.

More administrative cooperation, improved enforcement and greater clarification in the liability regime of internet intermediaries are required to increase its impact. 65 Directive 1999/93/EC of the European parliament and of the Council of 13 december 1999 on a Community

framework for electronic signatures, OJ L 013/12, 19.01.2000; available at: http://eurlex. europa. eu/Lexuriserv/Lexuriserv. do?

PDF 66 Directive 2002/58/EC of the European parliament and of the Council of 12 july 2002 concerning the processing of personal data and the protection of privacy in the electronic communications sector (Directive on privacy and electronic communications), OJ

Directive 2002/58/EC repealed Directive 97/66/EC of the European parliament and of the Council of 15 december 1997 concerning the processing of personal data and the protection of privacy in the telecommunications sector. 67 OJ L

in particular linked to the liability regime of the ECD (see Chapter 3. 4. 2). In order to better monitor these and other related developments,

but provided for free on the Internet are even more difficult to assess. Eurostat conducts surveys to measure the extent to

which businesses and households use the Internet, applying such indicators as the percentage of users who bought online in a given period of time.

Additional data are necessary to measure the progress of online services in the European economy. Some data are available in private research institutes

but they do not always cover the 27 Member States, and their comparability is guaranteed not.

This lack of information calls for a new framework for measuring the value of the Internet including services provided via the Internet.

together with the E-commerce Expert Group, explore means of improving (public) statistics on electronic commerce and of developing tools to collect more detailed statistics about internet sales volumes. 3. 2 Need

"and from the UK on the"Digital economy Act",available at http://ec. europa. eu/enterprise/tris/pisa/app/search/index. cfm?

or affected by the ECOMMERCE Directive. The national authorities in the CPC Network have investigative

For example, when an authority in Member State A considers that the website of an online trader established in Member State B does not fulfil the transparency requirements of Article 5 of the ECD,

Many cases concern websites which give incomplete information such as failing to indicate all the taxes and costs included in a price.

Other cases concern websites where the trader's identity, location and VAT-numbers were missing,

An updated list is available on the e-commerce website of DG MARKT. 79 National websites contain general 78 Report from the Commission to the European parliament and of the Council on the application of Regulation (EC) No 2006/2004

The use of the Internal Market Information system (IMI) for Article 19 ECD could also be explored. 3. 3 Need for better enforcement of the ECD Under the co-ordination of Commission services,

the CPC-Network enforcement authorities both screen a sample of websites in a given sector for compliance with EU consumer legislation and take appropriate enforcement actions.

(2) develop the exchange of best practices through a common website and (3) develop tools

By way of example, a major video-sharing site reported that more than 24 hours of video are uploaded on its site every minute. 83 Checking all videos that are uploaded from possibly illegal sites would be too heavy a burden to continue providing the service

offering a video-sharing site would probably be too great a commercial risk. Other intermediaries also maintained that the liability exemptions of the E-commerce Directive are essential for their trust in online activities.

"83 Google contribution to the public consultation on the future of electronic commerce in the internal market and the implementation of the Directive on electronic commerce (2000/31/EC), available at:

This could include, for example, sites containing infringements of intellectual property rights (such as trademark or copyright infringements),

but also sites containing child pornography, racist and xenophobic content, defamation, incitements to terrorism or violence in general, illegal gambling offers, illegal pharmaceutical offers, fake banking services (phishing), data protection infringements,

Moreover, the responses to the public consultation on e-commerce indicated that a wide variety of stakeholders face a high degree of regulatory uncertainty about the application of the intermediary liability regime of the ECOMMERCE Directive.

Article 15 prohibits Member States from imposing on intermediaries a general obligation to monitor. National courts have in recent years produced decisions imposing injunctions on intermediaries obliging them to prevent a 84 One of the conditions for an information society service provider to benefit from a liability exemption for illegal

The ECJ ebay vs. L'oréal judgment in case C-324/09 confirms that awareness in the sense of Article 14 can be obtained through a"notice"that is sent to an intermediary and that is sufficiently precise and substantiated.

several new services and activities have emerged that the legislators could not have foreseen, such as video-sharing sites, selling platforms, social networks and peer-2-peer services.

some Member States have provided for specific liability exemptions for information location services (search engine services) and hyperlinking services.

Austria, Hungary, Spain and Portugal have adopted specific liability exemptions for search engines according to which a company can benefit

This has resulted in a degree of regulatory 85 Joined cases C-236/08 to C-238/08, Google vs.

whereas others, in particular selling platforms, video sharing sites, social networks and search engines, favoured the inclusion of those activities within the"safe harbour"regime.

Where specific exemptions from liability for search engine services and hyperlinking services have not been included explicitly in national legislation

in the UK case"TV Links"(R v Rock and Overton), 86 the court without further reasoning ruled that a hyperlinking website was a mere conduit activity that could benefit from the liability exemption

Google Inc.)stated that the Directive was not relevant for the liability of a news search service

Article 14 ECD. 88 The court did not specify why a search engine should be classed as a hosting provider.

Similarly, there is divergent national case law on video-sharing sites: French case law recently confirmed that video-sharing sites can benefit from the liability exemption for hosting activities, for instance in the Magdane vs.

Dailymotion case. 89 The fact that Dailymotion received advertisement revenues was irrelevant in determining whether it was a hosting service provider or not.

however, the Hamburg Court held (in Peterson v Google Inc and others90) that a video sharing site for videos uploaded by third parties cannot benefit 86 Crown Court, Gloucester, 06.02.2010, ref. no.

T20097013, available at: http://merlin. obs. coe. int/iris/2010/4/article26. en. html 87 Brussels Court of First Instance, 15.02.2007, ref. no. 7964;

http://legalis. net/spip. php? page=jurisprudencedecision&id article=3001#.90 Hamburg Regional Court, 03.09.2010, ref. no. 308 O 27/09;

The court ruled that Youtube could not benefit from a liability exemption for hosting providers as, for the following reasons,

o Youtube provides a specific layout of the website and Youtube's logo is shown in rather big letters above the playing video;

o Youtube provides links to related videos; o Youtube displays commercial video clips and not only content that expresses a personal opinion. o Because of the arrangement of the website the average user cannot tell at first sight that the videos were uploaded by the user and not by Youtube;

o The homepage of Youtube suggests that Youtube exercises editorial control as it suggests certain videos;

o Youtube actively connects advertisements to uploaded videos; o Youtube's Terms and Conditions indicate that Youtube can use the content uploaded on its site as its own content.

In Italy the Civil Court of Rome (RTI and others vs. Youtube and others) 91 also considered that a video-sharing site could not benefit from a liability exemption.

The court stated that Youtube was not to be regarded as a hosting provider but as a"digital broadcaster"and was considered consequently fully responsible for the published content.

Youtube would play an active role and would not limit its activities to providing server space for users to independently upload

and organise content. The case law on online selling platforms is fragmented also: The Paris Commercial Court considered that ebay might not benefit from a liability exemption for its hosting activities. 92 The court considered that the sellers on ebay's website (recipients of ebay's services in terms of the E-commerce Directive) act under the authority

or the control of ebay (the provider of an information society service in terms of the E-commerce Directive), in which case, in accordance with Article 14 (2) of the Directive,

the liability exemption for hosting activities does not apply. The court came to this conclusion

because ebay plays an active role in promoting sales with the objective of increasing profits by,

for instance, appointing sales managers, creating online"boutiques "and offering the option of becoming a"power seller".

"In the L'oréal vs. ebay case93 the Paris Civil Court considered that ebay could offer its clients various services on the same site without losing the right to benefit from a liability exemption.

However, only some of ebay's activities are covered by the definition of hosting of Article 14 of the E-commerce Directive

and eligible for the liability exemption (for instance ebay's selection of"daily deals"could not be covered) 91 Appeal Panel Decision of Civil Court of Rome, IP specialist section, 22.02.2010,

and Court of Rome, 15.12.2009, Section IX, RG n. 54218/08, available at: http://www. scribd. com/doc/38060158/Ordinanza-Tribunale-di-Roma-16-dicembre-2009-RTI-vs-Youtube 92 Paris Commercial Court, 30.06.2008;

available at: http://www. legalis. net/spip. php? page=jurisprudencedecision&id article=2354 93 Paris Civil Court, 13.05.2009;

available at: http://www. legalis. net/spip. php? page=jurisprudencedecision&id article=2639 29 In the ebay vs.

Maceo case94, the Paris Civil Court considered that ebay's activities are covered by the definition of hosting.

That ebay receives revenues related to sales carried out on its website was considered irrelevant in this context. In this case, it was considered that ebay was not an editor as it could not be proven that ebay checks the messages that users post on the site.

The fact that ebay has designed the architecture and structure of its site and that it has developed systems for organising

and ranking the content on its site is not sufficient to conclude that it cannot benefit from the hosting liability exemption.

The UK High court in L'oreal vs. ebay95 considered without any further reasoning, that ebay's activities could not be covered by Article 14 of the ECD

because its activities would go far beyond the mere passive storage of information provided by third parties.

EBAY actively organises and participates in the processing and use of this information. The UK High court has decided not yet on the hosting status of ebay as it requested guidance from the European Court of Justice (see the judgement referred to in Chapters 3. 4. 2. 2 and 3. 4. 3. 1). Similarly fragmented

case law exists in relation to blogs discussion fora and social networks. For example: Usenet (a system in which users post messages to a newsgroup) was considered a caching provider by the German Regional Court of Munich96

because information was mirrored and stored on its service for about 30 days. A UK court, however, considered that British telecom operated a hoster in providing Usenet newsgroups (in the case Bunt v Tilley.)

97 The High court of England and Wales (Kaschke v. Gray Hilton) 98 refused to apply the liability exemption for hosting to a blog owner,

even for those parts posted by third parties. The defendant's involvement in the pages exceeded mere storage as he exercised some editorial control on parts of the website.

The Paris Court of First Instance99 refused to recognise a content aggregator displaying on its website links posted by third parties as a hosting provider

because the owner had played an active role in how the links should be classified and presented,

making him a publisher according to the court. The Tribunal de Grande Instance in France (Lafesse vs.

Myspace) 100 held that the social network service Myspace was not offering a hosting activity and therefore 94 Paris Tribunal de Grande Instance (TGI), 26.10.2010;

available at: http://www. legalis. net/spip. php? article3144 95 High court of England and Wales, 22.05.2009,2009 EWHC 1094 (Ch;

available at: http://www. bailii. org/ew/cases/EWHC/Ch/2009/1094. html. 96 Regional Court of Munich, 19.04.2007, ref. no. 7 O 3950/07;

available at: http://medien-internet-undrecht. de/pdf/vt mir dok. 155-2007. pdf. 97 Queen's Bench Division, 10.03.2006,2006 EWHC 407 (QB;

available at: http://www. bailii. org/ew/cases/EWHC/QB/2006/407. html 98 High court of England and Wales, 29.03.2010,2010 EWHC 690 (QB;

available at: http://www. bailii. org/ew/cases/EWHC/QB/2010/690. html 99 Paris Court of First Instance, 08.06.2009, ref. no. 08/11342;

available at: http://www. juriscom. net/documents/tgiparis20090608. pdf 100 TGI Paris, 22.06.2007; available at:

http://www. legalis. net/jurisprudence-decision. php3? id article=1965 30 could not benefit from a liability exemption.

The fact that the site allowed the classification and structuring of certain information provided by users did not imply an editing activity.

Moreover, the hosting provider status was seen to follow from the fact that the site did not offer a possibility to check the information on certain websites referred to in users'posts.

National jurisprudence on file sharing services also diverges. For instance The Italian Court of Cassation102 considered that Piratebay,

a peer-2-peer file sharing service particularly known for sharing pirated works, was not a hosting service provider.

The first case concerned Google's paid referencing service""Adwords",and its liability for infringements of trademarks held by The french luxury group LVMH,

104"Adwords",enables an economic operator to display advertising links to its site accompanied by a commercial message that appears on the right hand side of the screen

http://www. legalis. net/spip. php? page=jurisprudence-decision&id article=2488 102 Court of cassation, Third Criminal Chamber, 29.09.2009, ref. no. 49437;

http://www. ifpi. org/content/library/Pirate-Bay-verdict-English-translation. pdf 104 Joined cases C-236/08 to C-238/08, Google vs.

HTML 31 through Google's search engine. These advertisement links appear whenever a"keyword"that can be reserved by an economic operator corresponds to the word (s) entered as a request in the search engine.

In the national proceedings LVMH (the holder of the"Louis vuitton"trademark) complained about the fact that both competitors

"and that Google had prevented not them from doing so. The french Cour de Cassation asked the ECJ

whether, the referencing service provider (Google) could be held liable for this. The ECJ in this case refers to recital 42 in the preamble of the Directive to conclude that an intermediary service provider"has neither knowledge of nor control over the information

in the sense that its conduct is merely technical, automatic and passive, pointing to a lack of knowledge or control of the data

which it stores"(paragraphs 113 and 114) In analysing the Google"Adwords"service, the ECJ notes that"with the help of software it has developed,

Google processes the data entered by advertisers and the resulting display of the ads is made under conditions which Google controls.

Thus Google determines the order of display according to, inter alia, the remuneration paid by the advertisement"(paragraph 116).

However, the ECJ considers that to examine Google's activity in the light of recital 42,

"the role played by Google in the drafting of the commercial message which accompanies the advertisement link

or in the establishment or selection of keywords is relevant"(paragraph 118, underlining added). The second ruling from the ECJ on the liability exemption regime concerns ebay and L'oréal.

In its ruling of 12 july 2011 In case C-324/09 (see also Chapters 3. 4. 2. 1 and 3. 4. 3. 1) the ECJ had been asked, inter alia,

whether the selling platform ebay could be held liable for trademark infringements committed (and possibly to be committed) through its site.

In order to attract new customers to its website, ebay had bought keywords, including trademarks held by L'oréal,

from paid internet referencing services (such as Google's"Adwords")."In parallel to this, L'oréal had identified several infringements of its trademarks through/by the selling platform ebay.

The question posed to the ECJ was to what extent ebay could benefit from the exemption of liability on account of"hosting".

"The ECJ first confirms that an online selling platform in principle offers an information society service

and therefore is covered by the E-commerce Directive. The ECJ argues that, in order to define whether such a service is also an intermediary service in the sense of Article 14 of the Directive,

one should not only look at the text of the Directive, but also at the intention of the legislator:"(

"Article 14 of the ECD) must, in fact, be interpreted in the light not only of its wording but also of the context in

it is essential that the provider be an intermediary provider within the meaning intended by the legislature in the context of Section 4 of Chapter II of that directive (see Google France and Google, paragraph 112)".

"That is not the case where the service provider, instead of confining itself to providing that service neutrally by a merely technical and automatic processing of the data provided by its customers,

or control over, those data (Google France and Google, paragraphs 114 and 120)"."Paragraph 113"(.

"the mere fact that the operator of an online marketplace stores offers for sale on its server, sets the terms of its service, is remunerated for that service

and provides general information to its customers cannot have the effect of denying it the exemptions from liability provided for by Directive 2000/31 (see, by analogy, Google France and Google, paragraph 116).

or control over, the data relating to those offers for sale. It cannot then rely, in the case of those data,

on the exemption from liability referred to in Article 14 (1) of Directive 2000/31".("Paragraphs 115 and 116) The ECJ suggested that Ebay would potentially in some instances not have such a neutral position:"

"In some cases, ebay also provides assistance intended to optimise or promote certain offers for sale"(paragraph 114). 3. 4. 3 The conditions in Article 12 to 14 ECD Articles 12 to 14 of the ECD contain a number of specific material

conditions to be met in order to benefit from a liability exemption. The responses to the public consultation confirm that the respondents perceive a lack of clarity on the interpretation of these conditions and in particular of the terms"actual knowledge"and"expeditious",both

for instance, has a"general awareness"that its site hosts illegal information. The first interpretation is defended commonly by civil organisations in defence of, in particular the freedom of speech,

or activities on their sites and that this constitutes actual knowledge. ISPS that advertise the possibility of downloading music

In this context, respondents to the public consultation also argued that actual knowledge should be human knowledge and not"computer knowledge".

because the website of the third party was almost identical to the website of the political party,

if internet users confused the two websites. 105 Also, defamation has been considered manifestly illegal in some instances. 106 By contrast,

A host of a website containing hyperlinks leading to to child pornography was attributed knowledge of these illegal hyperlinks

http://www. legalis. net/spip. php? page=breves-article&id article=213 111 TGI Nanterre, 24.05.2000; available at:

idpdf=F-20040203-3 36 Youtube LLC. 117 Some stakeholders, in particular intermediaries, therefore suggested that the Commission should propose a so-called"Good samaritan clause".

L'oréal vs. ebay (see also Chapters 3. 4. 2. 1 and 3. 4. 2. 2) the referring court referred the question of

showdoccase=1&doc. id=JURE100058 567&st=ent 118 See Telecommunications Act of 1996: http://transition. fcc. gov/telecom. html 119 Regional Court of Hamburg, 03.12.2007, ref. no. 324 O 794/07;

available at: http://www. landesrecht. hamburg. de/jportal/portal/page/bshaprod. psml? showdoccase=1&doc. id=JURE0800 02256&st=ent;

=37 whether ebay was aware of facts and circumstances from which the illegal activity was apparent:

or control of the data stored. The operator plays such a role when it provides assistance which entails

whether ebay provides such assistance but it already indicated that"in some cases"(without further specification) ebay does play such an active role.

The ECJ does not elaborate explicitly on how a hosting service provider can obtain"actual knowledge".

Google case. The AG claims to"have some difficulties"with the conclusion of the Court that recital 42 would contain conditions for all intermediary services for benefiting from a liability exemption

however the term"expeditious"in the transposition of the ECOMMERCE Directive. This was done only by certain Member States (Hungary,

For instance, traffic management by internet providers (see Chapter 4. 3. 4 on net neutrality) could, according to some stakeholders, be interpreted as selecting

"and the ebay vs L'oréal case. 40 Apart from the E-commerce Directive, there are other pieces of European legislation relevant for NTD procedures.

sexual exploitation of children and child pornography126 obliges Member States to take the necessary measures to obtain the blocking of access by internet users in their territory

and the removal of internet pages containing or disseminating child pornography. Furthermore, fundamental rights are relevant

available at http://ec. europa. eu/internal market/copyright/docs/ipr strategy/COM 2011 287 EN. pdf. The Communication announces a review of the Enforcement Directive that should in particular find ways to combat infringements of IPR via the internet more effectively"by"tackling the infringements

such as internet service providers while respecting all fundamental rights recognised by the EU Charter of Fundamental Rights, in particular also the rights to private life, protection of personal data, freedom of expression and information and to an effective remedy".

128 In December 2009 several French internet platforms and right holders agreed on a charter for the fight against the sale of counterfeit goods on the Internet. 129 An extension of this charter is currently being discussed. 130 Recently,

In 2009 the Commission brokered an agreement on a code between a large group of social networks with the objective of ensuring the safety of minors online. 131 On 4 may 2011 a representative group of right holders and internet platforms

The Mou sets out a series of joint principles including effective and balanced measures to prevent offers of counterfeit goods from being listed on internet platforms. 132 A similar EU level dialogue on online piracy

http://www. nederlandtegenterrorisme. nl/fileadmin/user upload/Bedrijven/PDF S/Gedragscode notice and Take down tcm91-293746. pdf 129 See Charte de lutte contre la contrefaçon sur Internet:

http://ec. europa. eu/information society/activities/social networking/docs/sn principles. pdf 132 See: http://ec. europa. eu/internal market/iprenforcement/docs/memorandum 04052011 en. pdf 133 The website www. chillingeffects. org, an initiative from several US law faculties and some NGOS

, reports on cases of blocked legal content. 42 minors, despite their limited liability and responsibility under the E-commerce-Directive.

the review of such decisions, the tracking of its source and identification of the web hosting provider and, in particular, the notification to the competent authorities.

The Finnish Act on provision of information society services (transposing the ECOMMERCE Directive) contains a detailed notice

The German Access Impediment Act obliges the Federal office of Criminal Investigation to compile a black list containing child pornography websites, on the basis

of which ISPS have to block access to those websites; The Hungarian Act on certain aspects of e-commerce

The UK Digital economy Act follows a three-tier approach. First, ISPS must notify their subscribers of infringements which have been reported by copyright owners

they can be forced to block access to copyright-infringing websites; The UK Terrorism act provides a specific procedure for terrorism-related information;

or blogs) applies to several categories of illegal content; The Italian law on child pornography through the internet establishes a blocking mechanism for child abuse content;

The french Law on the performance of internal security also puts in place a mechanism for blocking child pornography. 3. 4. 4. 3 Persisting issues According to a majority of stakeholders that responded to the public consultation,

Certain stakeholders also consider it socially undesirable that the takedown of manifestly illegal information (for instance child pornography) is sometimes less fast than the takedown of illegal information where there is a financial gain involved in the takedown (for instance phishing websites.

Some intermediaries specified that certain complainants refuse to use the NTD procedure proposed by a particular site

It has also been suggested that a requirement to offer the possibility of submitting a counternotice could be in breach of data protection rules

A report conducted by Cambridge University136 demonstrates that the average time before takedown of child pornography sites is much longer than the time before takedown of phishing sites. d) Liability for providing wrongful notices

whereas others do not. e) Private operators assessing the legality of information Many respondents to the public consultation on e-commerce expressed concerns that private operators judging the legality of information on the Internet represented"private judges".

or blocking would not be a solution to the existence of illegal information on the Internet.

but in the form of offering attractive, accessible and legal services on the Internet. Moreover, some intermediaries, in particular video-sharing sites, argue that right holders should favour"monetisation"over takedown."

"Monetisation"involves receiving a share of advertisement revenues that can be attributed to content to which they hold the rights. 3. 4. 4. 4 An EU initiative on procedures for notifying

and acting on illegal online content The cross-border nature of the Internet, the existing fragmentation of NTD systems,

Contribute to combating illegality on the Internet. Ensure the transparency, effectiveness, proportionality and fundamental rights compliance of NTD procedures.

Stakeholders to be consulted include Member States, internet intermediaries, right holders, child protection organisations, civil rights organisations and citizens in general.

and includes also"blocking"of websites. 47 procedures; the consequences of submitting wrong notices; the instruments for removing or disabling access to illegal content, etc.

and where the border lies between an obligation to apply duties of care and a general obligation to monitor.

The provision is silent about injunctions. 48 In the L'oréal vs. ebay case138 the European Court of Justice accepts, in principle, the compatibility of effective and proportionate injunctions against providers such as operators of online marketplaces.

however, considers that that under the circumstances of the case at hand a court injunction forcing an internet access provider to introduce filtering software for the prevention of copyright ingringements is incompatible with Article 15 of the Directive construed in the light of the requirements stemming from the protection of the applicable fundamental rights.

in particular those involving the use of peer-to-peer software; which applies indiscriminately to all its customers;

"As regards the above-mentioned question it notes that"it must be held that the injunction imposed on the ISP concerned requiring it to install the contested filtering system would oblige it to actively monitor all the data relating to each of its customers

138 Case C-324/09, L'oréal v ebay, judgment of 12 july 2011, par. 141, available at http://curia. europa. eu/juris/recherche. jsf?

since it would require that ISP to install a complicated, costly, permanent computer system at its own expense"(paragraph 48)."

namely their right to protection of their personal data and their freedom to receive or impart information,

and the freedom to conduct business, the right to protection of personal data and the freedom to receive

A similar case, on the compatibility of such a filtering obligation for a social network, is currently pending before the ECJ. 140 3. 4. 5. 2 National law Article 15 has been transposed in different ways across the EU. Some Member States did not consider it necessary to introduce a prohibition of general monitoring in their legislative framework

or have been asked to impose the use of filtering software to prevent illegal information and activity by means of injunctions on intermediaries.

and the internet service provider Tiscali141 (now Scarlet) a judge on 29 june 2007 ordered Tiscali to use a specific filtering software("Audible Magic")to prevent infringements of copyright 140 Case C-360/10, Belgische Vereniging

The court considered that this software had proven to be considered effective and that the average cost of implementing the measure did not appear excessive.

In a case concerning Rolex, Ricardo and ebay, two online selling platforms, the Bundesgerichtshof142 (the German Federal Supreme court) considered that an injunction against the two intermediaries forcing them to apply filtering software would not be infringing Article 15.

In France, in a ruling of 13 may 2009 in a case concerning ebay and L'oreal

143 the Court refused to oblige ebay to implement filtering software for its"health and beauty section"to prevent infringements of L'oréal's trademark.

The Court considered that filtering software was not necessary as ebay had made the required efforts to prevent trademark infringements,

In the UK, BT and Talktalk, two internet service providers, had contested the validity of the Digital economy Act (DEA,

the main question concerning Article 15 is to what extent injunctions that impose filtering software are compatible with the prohibition of a general monitoring obligation.

http://www. legalis. net/spip. php? page=jurisprudencedecision&id article=2639.144 High court of Justice of England and Wales, Queen's Bench Division, 20.04.2011;

Video hosting sites have, for instance, voluntarily and in cooperation with right holders, developed so-called fingerprinting techniques that identify the unique hash code of a file.

and to identify a user's real location and IP ADDRESS. A variety of stakeholders raised concerns about significant traffic speed reductions as a result of certain filtering techniques.

The fact that there is interoperability between these techniques for different video sharing sites would be a particular burden according to some right holders.

On the other hand, filtering techniques such as deep packet inspection could restrict the right of personal data protection. There are, however, legitimate concerns about the protection of minors and public decency as regards, in particular,

child sex abuse images that circulate on the internet and as discussed above in the area of video

starting with the willingness to engage in ecommerce and following through the process of gathering of information on products and services on offer,

Trustmarks, personal data requirements specific policies for online gambling and pharmacies and liability provisions for businesses all contribute to enhancing trust online. 4. 1. 1 Trustmarks Trustmarks are considered generally a useful instrument for traders to foster consumer confidence.

Typical trustmark systems consist of an accreditation mechanism with an independent supervisor for an online trader to meet the trustmark's requirements (including creditworthiness, security mechanisms, price transparency, provision of information, customer service, data protection

especially for retail websites. 145 See in particular the Commission Communication"A Digital Agenda for Europe",COM (2010) 245 of 19.5.2010, available at:

and benefits of (different models) for setting up an EU online trustmark stakeholder platform. 4. 1. 2 Personal data protection 4. 1. 2. 1 Personal data protection

in the online environment It is acknowledged widely that trust is the currency of the digital economy.

Millions of citizens publish photos, blogs and text about families, friends and colleagues on social networks such as Netlog, Linkedin and Facebook,

The use and exchange of personal data have become essential factors in the online economy. 150 Professional players are aggregating massive amounts of data for professional use,

Mckinsey Global Institute, Big data: The next frontier for innovation, competition and productivity, May 2011; available at:

http://www. mckinsey. com/mgi/publications/big data/index. asp. 151 Behavioural targeting or behavioural advertising is used a technique by online publishers

Information is collected on an individual's web-browsing behavior, such as the pages they have visited or the searches they have made,

a user may often visit sport sites and thus be categorised in the"sports fan"segment.

and the right to the protection of personal data. Data protection rules organise and control the way personal data are processed.

These rules take account of the importance of the freedom of expression and provide for specific regime applicable to the processing of personal data carried out solely for freedom of expression purposes. 153 The ECD does not apply to questions relating to information society services covered by the EU legislation on the protection of personal data (Article 1

(5)( b) ECD). The Data protection Directive154 constitutes the fundamental legal framework for the processing of personal data in the EU. It was adopted to harmonise the legislation of the Member States with the twofold objective of protecting fundamental rights, namely the right to personal data protection,

and ensuring the free flow of personal data between Member States within the context of the Internal Market.

According to the Data protection Directive, personal data must be processed fairly and lawfully, collected for specified, explicit and legitimate purposes (data minimisation principle) and not further processed in a way incompatible with those purposes (principle of finality).

Personal data must be adequate, relevant and not excessive in relation to the purposes for which they are collected (purpose limitation principle).

The Directive furthermore provides for the right of individuals to be given information on the purposes of the processing, how and by

whom their data are processed and the rights to access, rectify and delete personal data. Monitoring of compliance with data protection laws implementing the Directive is entrusted to national public independent authorities endowed with investigative and enforcement powers.

The data protection authorities also hear claims lodged by individuals regarding the processing of their personal data.

A major factor enabling individuals to know about the processing of their personal data and exercise the rights granted by the Data protection Directive is the provision of information (principle of transparency).

155 Service providers that qualify as data controllers have to provide users with clear, easily understandable and affordable privacy notices in line with the requirements of the Data protection Directive.

This rule is, however, not always observed. Since its adoption in 1995, other EU legislation has come into force which complements the Data protection Directive.

The most significant instrument for e-commerce and other online services is Directive 2002/58/EC concerning the processing of personal data and the protection of privacy in the electronic communications sector (Directive on privacy and electronic communications), 156 as amended by Directive

2009/136/EC (Citizen's Rights 152 Charter of Fundamental Rights of the EU OJ C 364/1, 18.12.200;

available at: http://www. europarl. europa. eu/charter/pdf/text en. pdf 153 See: ECJ, Case C-101/01, Bodil Lindqvist, 6. 11.2003,

and Case C-73/07, Tietosuojavaltuutettu v. Satakunnan Markkinapörssi Oy, Satamedia Oy, 16.12.2008; both available at http://curia. europa. eu/juris/recherche. jsf?

language=en. 154 Directive 95/46/EC of the European parliament and of the Council of 24 october 1995 on the protection of individuals with regard to the processing of personal data and on the free movement of such data, OJ

L 281/31, 23.11.1995 (hereafter‘Data protection Directive';'available at: http://eurlex. europa. eu/Lexuriserv/Lexuriserv. do?

uri=CELEX: 31995l0046: en: HTML 155 See: Data protection Directive, Art. 10 and 11.156 Directive on privacy and electronic communications, OJ L 201/37, 31.07.2002 55 Directive), 157 hereafter the eprivacy Directive. 158 The eprivacy

Directive intends inter alia to give citizens control over which information is stored on or retrieved from users'terminal equipment,

including computers, smartphones or other devices connected to the Internet users should be able to know

and control who is using their information, and how the information is being used. Many respondents to the public consultation on e-commerce commented on the data protection

and privacy dimension of online services. The potential importance of personal data for the development of the Digital Single Market has been outlined

but also concerns about the use of data have been raised. The following sections focus on spam as well as cookies,

and recall the upcoming revision of the data protection framework. 4. 1. 2. 2 Spam and the eprivacy Directive Recent studies suggest that unsolicited commercial communication

or spam accounts for more than 90%of global e-mail traffic. 159 Spam is popular because costs for senders are low even with a wide range of unsolicited messages.

Only a limited number of recipients need to respond in order for spam to be commercially viable.

they can infect computers with viruses and the illegal offer of pharmaceuticals affects consumer confidence

Directive 2002/58/EC concerning the processing of personal data and the protection of privacy in the electronic communications sector and Regulation (EC) No 2006/2004 on cooperation between national authorities responsible for the enforcement of consumer protection laws,

PDF 158 Reference can also be made to the Data Retention Directive (Directive 2006/24/EC of 15 march 2006 on the retention of data generated

The Directive harmonises national laws on the retention of data e g. on internet access, telephony and e-mail to ensure the investigation, detection and prosecution of"serious crime".

"See the report from the Commission to the Council and the European parliament on the Data Retention Directive (Directive 2006/24/EC), COM (2011) 225 final, 18.04.2011;

http://www. statewatch. org/news/2011/apr/eu-com-data-retention-report-225-11. pdf 159 See:

PDF 56 Article 13 of the eprivacy Directive complements the provisions of Articles 6 and 7 of the ECOMMERCE Directive.

makes illegal under Article 13 (4) all commercial e-mails advertising websites without disclosing the identity of the sender on

and their customers by taking legal action against spammers. 4. 1. 2. 3 Cookies and the eprivacy Directive Cookies are hidden information exchanged between an internet user and a web server,

They are designed to facilitate a browser-server interaction in order to collect data. Cookies allow the creation of profiles which can be beneficial for both users and online service providers.

almost 80%of online service providers interviewed are collecting data from cookies. 161 Business representatives indicated in the public consultation that today's internet economy

and in particular the transformation of the Internet from web 1. 0 to web 2. 0 have been possible thanks to cookies.

How the data are collected and used raises questions about the compatibility of this practice with the eprivacy Directive.

Accordingly, consent has the same meaning as the data subject's consent defined in Article 2 (h) of that Directive, i e."

and informed indication of the user's wishes, including by ticking a box when visiting an internet website".

Any changes in the purpose for which consent was given that occur afterwards cannot be assumed to be covered by that consent, such as processing of data for incompatible secondary purposes.

and accessing data on a user's terminal equipment are part of processing for the same purpose,

/privacy/workinggroup/wpdocs/2011 en. htm 163 In accordance with Article 10 of Data protection Directive (95/46/EC) information should cover at least the identity of the company,

which the data are collected, to guarantee fair processing in respect of the individual. 164 Article 10 of the Data protection Directive lays down the minimum information that has to be provided to a data subject. 165 Further processing of personal data for historical,

statistical or scientific purposes is not generally to be considered as incompatible with the purposes for which the data have previously been collected,

provided suitable safeguards are in place (see recital 29 and Article 6 (1)( b) of the Data protection Directive).

58 Consent should be given freely, i e. the user must have an actual choice. This also implies that a user,

"Access to specific website content may still be made conditional on the well-informed acceptance of cookies or similar device,

Companies and industry associations increasingly publish their internal guidance for online/behavioural marketing and the processing of data.

and confirm commitments on principles such as informing consumers about control of their data; how they are used (selling to third parties,

in order to ensure compliance with the EU data protection legal requirements and to provide transparency to users,

and data protection setting out minimum privacy standards to be implemented through national legislation and selfregulation. 170 4. 1. 2. 5 Data protection Directive The Commission is preparing a major reform of the data protection rules laid down in the Data protection Directive171 to make the data protection framework more coherent

and provide more legal certainty (adoption foreseen in the first quarter of 2012). The objectives are to set forth a comprehensive and consistent personal data protection legal framework which addresses new challenges such as technological developments in the digital economy and more intense globalisation,

while eliminating unnecessary costs for operators, reducing administrative burdens, and ensuring more coherence in the data protection acquis.

The reform also aims at clarifying and simplifying rules for international transfers of personal data and strengthening and clarifying the powers of data protection authorities to ensure compliance with data protection rules. advertisement,

coupled with a website providing the user with information about how to switch off behaviourally targeted display ads from the company that the user signed up to.

The principles oblige the participating companies to provide clear and unambiguous notice to users that it collects data for the purposes of online behavioural advertising.

They also contain commitments on user education and the creation of complaints mechanisms. 169 See in particular http://europa. eu/rapid/pressreleasesaction. do?

reference=SPEECH/10/452 170 Recommendation CM/Rec (2010) 13 of the Committee of Ministers to member states on the protection of individuals with regard to automatic processing of personal data

in the context of profiling, 23.11.2010, available at: https://wcd. coe. int/wcd/Viewdoc. jsp?

of the Regions, A comprehensive approach on data protection in the European union, COM (2010) 609,04. 11.2010;

http://ec. europa. eu/justice/news/consulting public/0006/com 2010 609 en. pdf 60 Individuals sometimes find it difficult to exercise their rights as laid down in the Data protection Directive.

For example, in practice it is not always easy to request deletion of data, or to get access to personal data.

This is particularly an issue in the digital environment. Several provisions of the Directive have given rise to divergent interpretations

The development of the Internet and the increased supply of online gambling services are posing challenges for the co-existence of differing regulatory models,

and some 172 See the DG's website: http://ec. europa. eu/internal market/services/gambling en. htm 61 Member States prohibit the online sale of"over-the-counter"(OTC) medicines or medical devices.

but an almost total absence of legal internet sales in some eastern European Member States.

This does not always stop them from buying medicines online, with the result that they, often unconsciously, buy from illegal sites, with all the attendant health risks.

The Internet should not replace necessary face-to-face consultations with appropriate medical practitioners but internet services can provide quick and easy access to medicines in particular for chronically ill people, less mobile citizens, the elderly, working people or inhabitants of rural areas.

Second, medicines sold online can also be cheaper. In the case of non-reimbursed OTC medicines it is obvious that patients benefit from such lower prices directly.

the Internet guarantees anonymity to users, allowing people to access advice or medicines that they may

In the absence of developed legal markets, the Internet has, however, become dominated by illegal offers to

Without prejudice to the provisions of the ECOMMERCE Directive, the Directive provides, for example, for additional information requirements and the creation of an obligatory"trust mark"("common logo")for websites legally offering medicinal products on the Internet.

A"reciprocal link"between the common logo and a national register of legally-operating online sellers176 will allow verification of authenticity.

which medicines are sold over the Internet, within the limits of the EU Treaty. Following the the adoption of the Falsified Medicines Directive,

price comparison websites, restrictions on advertising, and unfair commercial practices should be tackled. 4. 2. 1 Price comparison websites As outlined in the Staff Working Document"Bringing e-commerce benefits to consumers"accompanying the Communication on e-commerce,

consumers are missing out from the full benefits of e-commerce, that is lower prices and a wider choice,

In 2010, eight in ten online shoppers used a price comparison website to research their purchases,

yet as was shown in a recent Mystery Shopping study of price comparison websites, only a low proportion of price comparison websites (17%)give customers the option of offers available from other Member States.

In addition, just 14%of tested price comparison websites are available in more than one language179. As a result, consumers often do not find out about cross-border offers.

The performance of the tested price comparison websites was substandard in many aspects when it came to the provision of information.

Only one in two price comparison websites provided the full details of their business address. The situation with online retailers was somewhat better,

with 67%of tested retailers providing a full business address. In 60%of tested price comparison websites, it was not clear

whether retailers had to pay to have listed their products and most price comparison websites did not display the correct final price.

Information provision on added costs was rather poor. Just 19%of price comparison websites showed prices including VAT and other taxes,

and delivery charges. Another worrying finding was that in more than half of trials, the cheapest price was not the first price displayed.

Moreover, 73%of distance sellers were unaware of the exact length of the"cooling-off"179 Data from the mystery shopping exercise taken from Civic Consulting.

or service providers to create their own website in the hope that clients will find their business

and make a direct order online through their website. Second online businesses such as newspapers, video sharing sites,

and commercial blogs offer content and services to consumers for free, earning revenue by selling advertising space on their sites to businesses that intend to reach those customers.

Third, online enterprises such as travel planning sites sell both advertising space and their (own) services directly to consumers.

In all those business models, the use of search engines has become widespread. Customers rely increasingly on search engines to find their preferred product or service.

Search engines charge advertisers on a pay-per-click basis. The trend is towards direct-response type advertising instead of display advertising.

Publishers have focussed on the importance of advertising revenues which account for 50%of newspaper revenues in the printed environment and almost 100%in the digital area.

Restrictions on advertising may therefore have a negative effect on the development of online services. Certain restrictions on advertising,

and apply both in offline and online 180 European commission, Flash Eurobarometer 300: Retailers'attitudes toward cross-border trade and consumer protection.

which a consumer has the legal right to return a product purchased on the internet, by phone or post without paying a penalty.

or apply different conditions for online and offline marketing. National rules restricting the periods of sales for"brick

In this context, Article 24 (1) of the Services Directive requires Member States to remove total bans in so far as such bans concern a particular form of advertising such as advertising over the Internet. 184 It has also been reported that contractual prohibitions (e g. on data portability) complicate multi-platform advertising campaigns.

the application of data and privacy protection rules on cookies and behavioural targeting has sometimes been perceived as excessive by internet companies.

The question has been raised to what extent the commercial communications rules of the Audiovisual Media Services Directive also apply to new services such as the online social networks. 183 See recently for example the Ker-Optika judgment,

The UCP Directive applies to commercial practices both in offline and online situations. The Directive is

thus a crucial instrument for guaranteeing that any commercial information available on websites is fair

the web page www. isitfair. eu contains practical information for consumers on how to check if they have fallen victim to an unfair commercial practice,

joint surveillance actions("sweeps")have been carried out on the basis of UCP provisions (websites selling airlines tickets, online mobile phone services, websites selling consumer electronic goods;

the Commission has developed a legal database which will make it possible to compare decisions and national case law of the Member States.

The database is a comprehensive and user-friendly tool which gathers and gives public access to national laws transposing the Directive, jurisprudence, administrative decisions,

the online information tool for internet users and consumers explaining the digital rights and obligations provided for by EU law in the form of frequently asked questions

Article 20 (2) of the Services Directive There is a growing tendency for businesses to use the Internet to foster the sales of their goods

and services by exploiting the global availability of their websites. However, most online traders still serve a very limited number of Member States.

Online buyers are confronted regularly with refusals of online web shops to deliver if they are not residing in the same Member State,

The most frequent cases concern web shops that either refuse to sell items or services to residents 187 http://ec. europa. eu/information society/eyouguide/navigation/index en. htm 188 European commission

It is not unusual that websites automatically route the consumer to another website which corresponds to their country of residence,

enabling the web shop to maintain different price policies based on national borders. Consumer transactions may also fail at the stage of revealing credit card details due to the address of the owner.

textiles, bikes, DIY goods, music downloads, rental cars, mobile phone contracts etc. Article 20 (2) of the Services Directive189 prohibits discrimination on grounds of nationality or residence in B2c and B2b relationships.

Globally operating internet companies therefore usually choose to have their country specific sites with a TLD of the country in question.

which the Internet should be neutral, open and easily accessible. This principle is not always compatible with the practice of"traffic management"generally used by internet providers.

A recent Commission consultation on net neutrality and the open Internet192, shows a consensus of opinion on the necessity of having a certain degree of traffic management:

on the one hand, techniques like packet differentiation and IP routing guarantee a minimum quality to end-users for services that require a differentiated network speed (such as videoconferencing),

however, also be misused by internet providers to prevent access to information society services, in particular when they are competing with the services of the internet provider (such as telephony or television services).

This can be done either by blocking certain services outright or by making it very unattractive to access them,

The Commission Communication on the open Internet and net neutrality in Europe193 reports several instances of blocking of legal services (in particular of Voice-over-Internet-Protocol services by mobile internet providers),

and the Committee of Regions, The open internet and net neutrality in Europe, COM (2011) 222 final, 19.4.2011;

and the choice consumers deserve. 4. 3. 5 Intellectual property rights The development of the Internet has meant the birth of a trade in goods

cultural and sporting events can be viewed on the Internet without having to go to a theatre or sports venue.

Historically, music was the first digital content available on the Internet. Thanks to further technological development including the growth of broadband networks,

Today, with the availability of adequate computer support for reading text, books have become services

http://ec. europa. eu/internal market/copyright/docs/ipr strategy/COM 2011 287 EN. pdf 73 digitisation and making available of"orphan works".

printers, Mp3 players, CDS and DVDS etc..However, different rules and tariffs apply across Member States.

Key Principles on the Digitisation and Making Available of Out-of-Commerce Works, 20.09.2011, available at:

the Commission will pursue its efforts exploring to what extent the sale of counterfeit goods over the Internet can be reduced through voluntary measures,

involving the stakeholders most concerned by this phenomenon (right holders and internet platforms). In this context, a Memorandum of Understanding was signed by major internet platforms and right holders on 4 may 2011.203 Over the coming twelve months,

these stakeholders will review and measure progress under the auspices of the Commission services. The Commission is also working on a review of the IPR Enforcement Directive 2004/48/EC,

204 inter alia identifying ways to create a framework allowing more effective combating of IPR infringements via the Internet. 7. Journalists are authors

and publishers have over the use of their works on the Internet, in particular in view of the rise of news aggregation services.

whether this be on demand, Internet or satellite. The inadequacy of rules governing the provision of digital cultural goods,

Examples are geographical information, statistics, weather data, public transport data, data from publicly funded research projects,

Another key barrier is the lack of awareness of public organisations of the potential of open data.

there are practical and technical issues holding back the development of a true public data reuse market.

and the non-availability of the information in a machine-readable format make it impossible to reap maximum benefits from the new opportunities that the data offer.

In addition, more support than available now is needed for R&d and innovation on data analysis and visualisation tools. 206 Joined Cases C-403/08 and C-429/08, Football Association Premier League Ltd v

and strengthen its public data strategy by inter alia targeting both the legal framework for reuse and available support tools.

Adapting the framework in favour of data reuse, including legal, soft law and policy measures;

Mobilising financing instruments by prioritising open data in R&d&i and infrastructure programmes; Facilitating coordination and experience-sharing between Member States.

and internet sectors to ensure that market players comply with EU competition law. For instance, in spring 2010 the Commission launched two investigations into business practices by Apple involving the iphone.

Apple had made warranty repair services available only in the country where the iphone was bought, thereby potentially partitioning the Internal Market.

Moreover Apple had restricted the terms and conditions of its licence agreement with independent developers of applications requiring the use of Apple's native programming tools and approved software languages to the detriment of third-party software.

In September 2010 following a change of policy by Apple, the decision was taken to close both investigations. 210 Similarly,

on 20 november 2010 the Commission started investigations into Google following allegations of abuse of market dominance in the areas of online search,

Statement on Apple's iphone policy changes, IP/10/1175,25. 09.2010, available at: http://europa. eu/rapid/pressreleasesaction. do?

Commission probes allegations of antitrust violations by Google, IP/10/1624,30. 1..2010, available at:

on 21 january 2010 the Commission agreed to the planned acquisition of Sun microsystems by Oracle. 213 The acquisition raised the issue of the competitive effect of open source software products.

"For instance, a major application store would require from online press providers that their applications include an option to conclude commercial transactions within the application (instead of providing a link to a website where the commercial transaction is concluded),

by prohibiting anticompetitive restrictions to cross-border internet marketing and sales. 215 However, certain http://europa. eu/rapid/pressreleasesaction. do?

B&w Loudspeakers, 2002) approved selective distribution networks on the condition that the company removed clauses prohibiting authorised distributors from selling over the Internet.

See also the recent judgement of the ECJ in a case on the question whether an absolute refusal of a cosmetic and personal care company to allow its French distributors to sell its products on the Internet is compatible with the (now) Article 101 TFEU and the Block

The same rules apply to offline and online sales. For, in the online world, suppliers can also set up an exclusive distribution network

and require quality standards for the use of an internet site to sell their products.

Since the Internet allows distributors to reach different customers and different territories, certain restrictions on the use of the Internet by distributors are dealt with as hardcore restrictions.

In principle, every distributor must be allowed to use the Internet to sell products. For example, any obligation on distributors to automatically reroute customers located outside their territory,

or to terminate consumers'transactions over the Internet if their credit card data reveal an address that is not within the distributor's territory,

are hardcore restrictions. Similarly any obligation that dissuades distributors from using the Internet, such as a limit to the proportion of overall sales which a distributor can make over the Internet,

or the requirement that a distributor pays a higher purchase price for units sold online than the same considered that such a restriction infringes Article 101 (1) TFEU as it has an anti-competitive object,

and cannot benefit from the Vertical Restraints Block Exemption Regulation. 216 Commission Regulation (EU) No. 330/2010 of 20 april 2010 on the application of Article 101 (3) of the Treaty on the Functioning

of the European union to categories of vertical agreements and concerted practices, OJ L 102/1, 23.04.2010 (the"Block Exemption Regulation";

PDF 79 distributor pays for units sold offline("dual pricing"),is considered also to be a hardcore restriction. 218 In addition,

The EU acquis on B2b contracts is limited to a few areas of contract law, addressed by the Ecommerce and Late Payments Directives.

which impose surcharges higher than the trader's actual costs for the use of a certain payment means (e g. credit cards) and on charges for telephone hotlines higher than the standard telephone rate for calls.

the Directive will not remove all the contractual obstacles for cross-border ecommerce transactions. For example, the fragmentation of national laws on remedies (guarantees) and unfair contract terms will remain unchanged.

One special issue to note is the application of the Directive to digital content (data produced

and supplied in digital form such as computer programmes, applications, games or music). Contracts for the supply of digital content are within the scope of the Directive,

In particular, traders will have to inform (consumer) buyers of digital content not only about its compatibility with hardware and software

Recent Eurobarometer surveys224 and those carried out by the European Business Test Panel (EBTP) 225

and the Enterprise Europe Network226 confirm that businesses with an interest in 223 On 16 november 2011 the Commission hosted a seminar to discuss consumer problems with digital products, such as e-mail, social networks, music, films, e

http://ec. europa. eu/justice/newsroom/consumermarketing/events/digital conf en. htm 224 See Eurobarometer Flash 320,

European contract law in business-to-business transactions, 2011, available at http://ec. europa. eu/public opinion/flash/fl 320 sum en. pdf and Eurobarometer Flash 321,

European Business Test Panel, European Contract Law survey, available at: http://ec. europa. eu/yourvoice/ebtp/consultations/2010/european contract law/report en. pdf 82 selling their products cross-border rank barriers related to differences of contract law

as they have to adapt their website to the legal requirements of every Member State they direct their activity to.

when a website contains activities directed to consumers in other Member States (see Chapter 4. 7. 4). The Common European Sales Law would contribute to the solution for the problems posed by the diversity of cross-border situations.

especially at the expense of SMES, are likely to exist in the online as in the offline sector.

in the way sites can be referenced by search engines or how technologies can be slowed down or blocked.

as outlined in the recent Communication on Internet network neutrality. In the first half of 2012, it will report on its analysis of the implementation of the Framework Directive"telecom"(2002/21/EC) 233

as amended by Directive 2009/140/EC234 to ensure that new rules guarantee an open Internet (see also Chapter 4. 3. 4). 4. 4. 3 E-signatures,

e-identification and e-authentication The legal recognition of electronic signatures and electronic authentication is crucial for facilitating and strengthening confidence in electronic transactions.

The Directive on Electronic signatures (Directive 1999/93/EC235) provides the European framework for esignatures. EU-legislation on the mutual recognition and acceptance of e-identification and authentication across borders is still lacking.

The esignature Directive has been evaluated a number of times since its adoption. The Commission's first implementation report of 15 march 2006236 concluded that

PDF 235 Directive 1999/93/EC of the European parliament and the Council of 13 december 1999 on a Community framework for electronic signatures, OJ L 013/12, 19.01.2000;

HTML 236 Report from the Commission to the European parliament, the Council, Report on the operation of Directive 1999/93/EC on a Community framework for electronic signatures, COM (2006) 120 final, 15.03.2006;

including the Internet and mobile communications. As a first step a public consultation on e-identification

the Commission will propose legislation ensuring the mutual recognition of electronic identification and authentication across the EU and a revision of the Directive on Electronic signatures. 237 Communication from the Commission to the Council,

a lack of payment security and data protection, and finally uncertainties relating to liability in case of unauthorised payments or unsatisfactory deliveries.

according to data from one of the major credit cards players, has 50%more bank cards than the USA but 40%smaller volume of ecommerce.

mobile payments through billing by telecom operators seem to be preferred the solution today. The excessive cost of payments has been noted by many merchants and associations.

but also on payment intermediaries, telecom operators for m-commerce, and payment on delivery. For micro-payments, the issue of cost seems to be a major obstacle to the development of low value information society services such as online newspapers, music, movies, video games,"premium rate service",directories,

and low priced event tickets. Consumers also complain about the high cost of payments. The possibility of charging additional fees for card payments (surcharging

which seems to be very significant for both online and offline payments, and is apparently more relevant for crossborder payments than for domestic payments.

internet and mobile payments"."The Green Paper aims to assess a number of specific factors which seem to be the root causes for many of the problems encountered by consumers and merchants in the field of e-commerce today.

as for instance the majority of card payments today continue to be made offline. The Paper is based on the premise that four drivers could significantly enhance the European payments market

internet and mobile payments and the Green Paper provides the basis for a public consultation as to

Finally, the Paper deals with payment security and data privacy and the possibilities for improvements in this area.

internet and mobile payments. 244 4. 5. 2 Electronic invoicing Invoicing forms another part of the e-commerce process chain

invoices can be paid electronically with a simple click and without the need for manual data input.

Eurostat Data In focus 46/2009: Internet usage in 2009-Households and Individuals, available at: http://epp. eurostat. ec. europa. eu/portal/page/portal/product details/publication?

p product code=KS-QA-09-046 90 Delivery links the two sides of the e-commerce chain.

http://ec. europa. eu/internal market/post/doc/studies/2010-main-developments en. pdf 253 Eurostat Data In focus 46/2009:

Internet usage in 2009-Households and Individuals, available at: http://epp. eurostat. ec. europa. eu/portal/page/portal/product details/publication?

Based on available data one can observe that-with the exception of Greece, where 7%of the population does not have five times per week delivery frequency Member States do not provide for extensive derogations. 260 A basic high level parcel delivery of a specified quality standard at EU level is guaranteed

Features such as increased distribution coverage guaranteed delivery times, improved operational performance, endtoend logistics services or track and trace services are offered increasingly as value-added delivery services.

and RFID significantly contribute to the optimization of the delivery chain processes (e g. sorting; delivery), which can subsequently be reflected in improved services, both in terms of the quality of service as well as pricing.

because the Internet continues to be perceived as a risk area, generating potential disputes which cannot be solved easily partly because of the nature of this virtual exchange zone.

Alternative Dispute Resolution("ADR")272 is considered widely as an efficient, quick and low-cost alternative to classic court procedures both for online and offline disputes.

when UNCITRAL set up a working group on ODR for e-commerce transactions. 278 Most of the existing ADR schemes do not make a distinction between online and offline purchases.

traders and ADR schemes communicate during the whole procedure through a web-based system in order to resolve disputes.

in order to settle disputes arising between their members and consumers (for example, call centres for telecommunications). Certain consumer protection associations have developed tools to assist consumers to quickly

taking place over the Internet. Its partners, which include universities, are specialized in online dispute resolution.

and 82%who have used already ADR would do so again in the future. 285 This evidence is further reinforced by data on the satisfaction levels of businesses that had used ADR;

In some other sectors, such as telecoms, energy, and consumer credit, EU legislation obliges Member States to establish ADR schemes.

there are important gaps in ADR coverage. This means that the existing set of ADR schemes offering to resolve business-to-consumer disputes related to e-commerce transactions is scattered still and incomplete within the European union.

http://ec. europa. eu/consumers/redress cons/docs/cons redress eu qual study report en. pdf 284 The Gallup Organization for DG Communication, Flash Eurobarometer 300, Retailers'attitudes towards cross

http://ec. europa. eu/public opinion/flash/fl 300 en. pdf 285 European Business Test Panel (EBTP) survey, Alternative Dispute Resolution, 2010-11

Internet purchases continue to be the main source of consumer crossborder complaints making up 56%of all complaints addressed to the ECC-Net in 2010 (44,232 complaints.

or the websites of 41%of the courts visited. Consumers found it difficult to fill in the forms on their own

when internet actors are resident in two different Member States or even outside the EU. Determining the competent court

I with respect to services offered on the Internet. In the cases of Hotel Alpenhof and Peter Pammer302, the basic question at issue was whether the fact that the website of a business

on the basis of which a consumer entered into a contract, can be viewed on the Internet is sufficient to justify the conclusion that an activity is being directed"within the meaning of Article 15 (1)( c) of the Brussels I Regulation.

In the Hotel Alpenhof case, the consumer, a German resident, reserved a number of rooms, for a period of a week, in Hotel Alpenhof, in Austria.

The reservation was made by email, the address being provided on the hotel's website which the consumer had viewed.

The consumer found fault with the hotel's services and left without paying his bill.

He booked a voyage with the German company Reederei Karl Schlüter through a German travel agency specialising in the internet sale of voyages by freighter.

The European Court of Justice ruled that mere use of a website by a trader

or when it pays a search engine operator for an internet referencing service in order to facilitate access to its site by consumers domiciled in those various Member States.

Nevertheless, other less obvious items of evidence, if combined with one another, are also capable of demonstrating the existence of an activity"directed to"the Member State of the consumer's domicile.

the inclusion of telephone numbers with an international code; use of a top-level domain name other than that of the Member State in

Likewise, if the website permits consumers to use a language or a currency other than that generally used in the trader's Member State,

On the other hand, the mere mentioning on a website of the trader's email address or geographical address,

or of its telephone number without an international code, does not constitute evidence of this kind

whether it is apparent from the traders'websites and overall activity that they were envisaging doing business with Austrian consumers (Case C-585/08)

available empirical evidence shows that the digital economy has positive effects on the environment. For example, compared to a traditional CD purchase in a"brick and mortar"shop

or not. 311 Research in the field of online and offline movie rental came to the same conclusions

despite the fact that in the online movie rental business the DVDS were delivered still. 312 E-commerce and other modern technologies can also help to communicate to consumers the environmental performance of the products they buy more clearly,

Report to Microsoft Corporation and Intel Corporation, 2009, p. i, available at: http://download. intel. com/pressroom/pdf/cdsvsdownloadsrelease. pdf 312 Marcelo Velásquez, A comparative study of the environmental impact of the online and offline movie rental business

, 2009, available at: http://dalspace. library. dal. ca: 8080/bitstream/handle/10222/12737/MEC%20thesis%20marcelo%20v ELASQUEZ. pdf?

especially as regards crossborder distance sales. 4. 8. 4 International dimension316 E-commerce and the Internet have an inherently global dimension,

l'achat sur internet et dans le commerce traditionnel, June 2009; available at: http://www. fevad. com/uploads/files/Prez/fevad estia 110609. pdf 314 Weber et al.

such as the classification of e-commerce services or the development dimension of ecommerce. The Commission has also been involved in the discussions within the Internet Governance Forum (IGF) on issues such as the sustainability and security of the Internet.

Despite the usefulness of several multilateral dialogues on e-commerce, the Commission believes that e-commerce could benefit from intensifying multilateral dialogues. 318 For example:

European Neighbourhood Policy. 109 Commission services will further intensify the bilateral and multilateral discussions on ecommerce and other online services through global cooperation in particular in the context of the WTO/GATS, OECD and the Internet Governance

SG (2003) A/05684) http://www. et. gr/index. php? option=com wrapper&view=wrapper&itemid=104& lang=en Spain Transposition deadline:

(MNE (2006) 51147) http://www. likumi. lv/doc. php? id=109879&from=off 2. Pateretaju tiesibu aizsardzibas likums Legal act:

(MNE (2003) 50062) http://www. likumi. lv/doc. php? id=23309 3. Par reglamentetajam profesijam un profesionalas kvalifikacijas atzi anu Legal act:

(MNE (2004) 50177) http://www. likumi. lv/doc. php? id=26021 4. Latvijas Republikas Civillikums Legal act:

(MNE (2003) 50827) http://www. vvc. gov. lv/export/sites/default/LV/publikacijas/civillikums. pdf 5. Informacijas sabiedribas pakalpojumu likums Legal act:

(MNE (2004) 53163) http://www. likumi. lv/doc. php? id=96619 6. Grozijumi Pateretaju tiesibu aizsardzibas likuma Legal act:

(MNE (2004) 51138) http://www. likumi. lv/doc. php? id=221390 127 Lithuania: Transposition deadline:

(MNE (2006) 58519) http://www. legi-internet. ro/legislatie-itc/comert-electronic/legea-comertuluielectronic/legea-nr-121-din-4-mai

(MNE (2006) 58517) http://www. legi-internet. ro/index. php? id=22 132 3. Lege privind unele masuri pentru asigurarea tranparentei în exercitarea demnitatilor publice, a functiilor publice si în mediul

(MNE (2006) 58518) http://legislatie. resurse-pentru-democratie. org/161 2003. php Slovenia Transposition deadline: 01/05/2004 1. Zakon o spremembah in dopolnitvah Zakona o varstvu potro nikov (ZVPOT-C) Legal act:

Access Impediment Act (repealed) ACT CVIII of 2001 on certain aspects of ecommerce services Law on information society services Terrorism act 2006/Digital economy Act 2010 Articles

domain names, internet protocol addresses and destination addresses of the website-subject-matter of injury and description of facts substantiating infringement-data necessary for identification of infringement-name, address or head office,

telephone number and electronic mail address of rights holder Information on: -noticeprovider-protected work-IPR holder-nature infringement-location infringing material-declaration that content is related terrorism-order to secure that content is not available to the public

including file name-copyright statement-date and time-IP ADDRESS, port number, website, protocol, or Unique infringement The ISP must be notified of the decision of the Section

-the law of 12 may 2010 contains in its Article 61 a basis for filtering of illegal gambling sites;

-the decree of 20 june 2009 lays down the basis for a public website for reporting cybercrime (notably child abuse content, financial crime and racist content

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