Analytics, EU – Baltic States, Modern EU

International Internet Magazine. Baltic States news & analytics Tuesday, 25.06.2019, 23:19

Digital agenda and e-trade: perspectives for business in the Baltic States

Eugene Eteris, European Studies Faculty, RSU, BC International Editor, Copenhagen, 12.02.2019.Print version
European digital single market has opened additional opportunities for corporate activity in the Baltic States. Recently, the two EU legislative institutions, i.e. the European Parliament and the Council of Ministers reached an agreement on the online sales of goods and supply of digital content and services.

One of the biggest benefits of the European digital single market is using PCs and being connected to the net to buy various goods in any EU country without additional costs. For businesses, it means being able to offer products, services and digital content everywhere in the EU and having access to millions of potential customers. 


For the last decade, the European Commission was active in streamlining the EU e-commerce’s rule-book in order to break down online barriers that prevent people from enjoying full access to all goods and services being offered in the EU member states. These efforts were aimed at combating unjustified cross-border barriers; facilitating cheaper cross-border parcel deliveries, protection of online customer rights and promoting cross border access to online content.


On 9 December 2015 the Commission adopted two proposals: one on the supply of digital content (e.g. streaming music) and one on the online sale of goods (e.g. buying clothes online). The scope of the latter proposal was extended to offline sales in 2017. The two proposals aimed to tackle important obstacles to cross-border e-commerce in the EU: legal fragmentation in the area of consumer contract law, which made it difficult for SMEs to do business cross-border and low consumer trust when buying online from another member state. As the latest Consumer Conditions Scoreboard (2017) has shown, those concerns are still present. 


See the Scoreboard at: https://ec.europa.eu/info/sites/info/files/consumer-conditions-scoreboard-2017-edition_en.pdf.  

 

E-trade and commerce is one of the cornerstones of the European digital single market strategy; the EU institutions have taken several steps to make it easier and safer for European consumers to shop online throughout the EU.


On EU digital market see: https://ec.europa.eu/digital-single-market/en

The European Digital Single Market Strategy requires the European Commission to make proposals regarding the online sales of goods and supply of digital content and services; one of the latest had been in December 2015.


To explore the full potential of e-commerce, the EU institutions made the following suggestions:- to revise payment services directive and new rules on cross-border parcel delivery services  that are already in force; - making new rules to stop unjustified geo-blocking  which is now in force from 3 December 2018; - to revise consumer protection rules that will enter into force in 2020; and – elaborate new VAT rules for online sales of goods and services that will enter into force in 2021.


See more in: https://ec.europa.eu/digital-single-market/en/new-eu-rules-e-commerce

 


Cross-border parcel delivery

It is evident that prices for cross-border parcel delivery are on average 3 to 5 times higher than domestic delivery prices for all products. Over 60% of companies that wish to sell online identify high delivery costs as a main problem.


In order to facilitate the development of cross border e-commerce, the Commission in 2012 launched a Green Paper consultation on the cross-border delivery of parcels. The consultation was focused on cross-border issues and e-commerce needs.


More in the issue in: https://ec.europa.eu/growth/sectors/postal-services/parcel-delivery_en

New rules on online cross-border parcel delivery services have been in place since May 2018, aimed at guaranteeing price transparency and competition. This will make it easier to find the cheapest way of sending a parcel from one Member State to another.


On 25 May 2016 the Commission adopted a proposal for a regulation on cross-border parcel delivery services, as part of a package of measures to allow consumers and companies to buy and sell products and services online more easily and confidently across the EU.


The proposal at:

https://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELEX:52016PC0285&from=EN


Consumers and small businesses complain that problems with parcel delivery, in particular high delivery charges for cross-border services, prevent them from selling or buying more across the EU. The aim of the proposal is to increase price transparency and regulatory oversight of cross-border parcel delivery services so that individual consumers and small e- retailers can benefit from more affordable deliveries and convenient return options, even to and from peripheral regions.


The Regulation will give national postal regulators the data they need to monitor cross-border markets and check the affordability of prices. It will also encourage competition by requiring transparent and non-discriminatory third-party access to certain cross-border parcel delivery services and infrastructure. The Commission will publish the public list prices of universal service providers to increase peer competition and tariff transparency.


See also: Factsheet on how you can make the most out of e-Commerce in the EU as a consumer in: https://ec.europa.eu/digital-single-market/en/news/e-commerce-eu-how-you-can-make-most-out-it-consumer/ There is a web-page’s Latvian version. 


Regulation on geo-blocking

Consumers and businesses – especially SMEs – show an increasing interest in shopping and selling across the EU. Online sales of products are growing by 22% per year. However, frequently traders refused to sell to customers from another EU Member State or to offer equally advantageous prices in comparison with local clients.


The Regulation (EU) 2018/302 ("Geo-blocking Regulation") which entered into force on 3 December 2018, provides consumers and businesses within the EU's internal market with more opportunities.


See: https://ec.europa.eu/digital-single-market/en/geo-blocking-digital-single-market 


In particular, it addresses the problem of some customers not being able to buy goods and services from traders located in a different EU state, even at the same conditions as locals, only because of their nationality, place of residence or place of establishment. In 2015, a Commission survey found that only 37% of websites actually allowed cross-border customers to reach the final step before completing the purchase by entering payment details. 

 

European Commission’s proposal from May 2016 on a regulation for combating an unjustified geo-blocking online entered into force in December 2018. Thus, the Europeans will feel free from their website’s blocking or re-routing them just because they, or their credit card, have been registered in a “different country”. Since the end of 2018, EU citizens, wherever they are in the EU, are being able to access goods and services online.


Geo-blocking refers to practices used for commercial reasons, when online sellers either deny consumers access to a website based on their location, or re-route them to a local store with different prices.


More on the 2018 regulation see press release:

http://europa.eu/rapid/press-release_STATEMENT-18-6626_en.htm

 

The geo-blocking regulation is part of a wider set of measures aimed at boosting e-commerce in the Single Market, such as the revised Consumer Protection Cooperation Regulation, the new rules on cross border parcel delivery services, the new rules for digital contracts, and the new VAT rules for electronic commerce.   


More on the issue in: Factsheet on how you can make the most out of e-commerce in the EU as a consumer, as well as in the Short guide on the geo-blocking rules for online sellers.

 

The new rules will enable consumers to have a wider choice of products at competitive prices and consequently better deals. At the same time businesses will see their customer base expand across borders and enjoy lower transaction and administrative costs. The Regulation is also part of a wider EU effort to boost e-commerce in the EU, which includes measures to better protect consumers online, ensure more affordable cross-border parcel delivery and simplify VAT rules to make it easier to buy and sell goods online.    


The Baltic States and Latvian authorities shall ensure an effective implementation of these rules and do all that is in their power so that effective enforcement of the geo-blocking regulation. Besides, the EU states shall agree on harmonised rules for the sale of digital goods and services and online purchases; these elements are crucial for creating a well-functioning and competitive European digital single market.


In conjunction with the regulation to end unjustified geo-blocking that entered into force in December 2018, the new agreement on digital contract rules is the latest achievement of the European digital single market strategy, delivering concrete benefits to citizens and businesses. 

 

The European Commission’s authorities, including Andrus Ansip, Vice-President for the Digital Single Market, and Věra Jourová, Commissioner for Justice, Consumers and Gender Equality welcomed the agreement. They underlined that the regulation would allow European consumers to have the EU-wide, clear, up to date and harmonised rules on the supply of digital content and on sales of goods. Besides, consumers across the EU will be better protected: e.g. when digital content such as music or software is defective, a consumer will be able to be compensated. They will also have more time to prove that an item purchased was defective at the time of purchase. And when a product is defective, the same compensation possibilities, such as getting a discount or refund, will apply throughout the EU. As for businesses, they will benefit from more legal certainty and fair competition.  


In this way, the EU institutions have found solutions that meet the challenges faced by consumers and sellers in a highly digitalised and borderless environment. The regulation will boost consumers and corporate confidence as an increased supply of both digital content and goods across Europe will bring more choice at competitive prices to consumers.

However, the EU institutions need the same level of commitment on other EU priority files: the proposed modernised copyright rules to make them fit for the digital world and the proposed Regulation on Privacy and Electronic Communications.

 


Next steps

EU states are in charge of the enforcement of the regulation and need to put in place the necessary structures to ensure a smooth start to its application. In particular, the EU states must designate bodies entrusted with its enforcement and bodies which will provide practical assistance to consumers.


In addition, the Baltic States have to set out effective, proportionate and dissuasive measures applicable to infringements of the Regulation. The Commission will conduct a first review of the Geo-blocking Regulation by March 2020. This assessment will cover the possible extension of the non-discrimination principle in accessing goods and services to non-audiovisual electronically supplied services whose main feature is copyright protected content, such as e-books, music, games and software. The Commission will also carefully analyse whether in other sectors, such as services in the field of transport and audio-visual services, any remaining unjustified restrictions based on nationality, place of residence or place of establishment should be eliminated.  


The EU’s digital market strategy is to ensure better access for consumers and businesses to online goods and services across Europe. E-commerce is growing, but its full potential still remains untapped both for businesses and consumers in Europe.


The new agreement on digital contract rules is an additional and essential initiative that makes the Digital Single Market a reality for all, together with the end of roaming charges, the new rules on data protection and the possibility for citizens to travel with their online content.

 

More information in the following web-sites:

 - European Digital Single Market: Announcement by President Juncker - video;

 - Webpage on the Digital Single Market (#DigitalSingleMarket);

 - A Digital Single Market for Europe: Commission sets out 16 initiatives to make it happen (6 May 2015),


General references at: http://europa.eu/rapid/press-release_STATEMENT-19-742_en.htm?locale=en; LV’s version at:

http://europa.eu/rapid/press-release_STATEMENT-19-742_lv.htm






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