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[FYI] LAB on Electronic Commerce - Commission Proposal for a Dir


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European Commission
Legal Advisory Board 

                                      Minutes of the meeting of the
                                      Legal Advisory Board 
                                             held in Brussels on 25
                                             November 1998 


3. Electronic Commerce - Commission Proposal for a Directive 

Mrs Froehlinger gave a very interesting an in depth presentation on
the draft Directive on Electronic Commerce issued recently. Her
intervention consisted of two parts: a general introduction and a
specific part, dealing with the 5 areas contained in the draft. 

a. General remarks 

Mrs Froehlinger stated that Electronic Commerce offers the Community a
unique opportunity for economic growth, to improve European industry's
competitiveness and to stimulate investment in innovation and the
creation of new jobs. However, these will not be optimised unless the
many legal obstacles, which remain to the on-line provision of
services are eliminated. Therefore, the proposal intends to remove
such obstacles thereby allowing free circulation of Electronic
Commerce in Europe. She stressed that the proposal meets the
principles of subsidiarity and proportionality by covering only those
issues where a Community initiative is indispensable. Mrs Froehlinger
added that, at present, there is uncertainty in a number of areas
about how existing legislation can be applied to the on-line provision
of services. There is divergent national legislation already in place
or currently being discussed. Furthermore, diverging jurisprudence is
emerging. The proposal, therefore, seeks to remove the obstacles that
result from such conditions, for service providers established in
Europe, by tackling a number of key issues that together form a
coherent framework to bring about the free circulation of on-line
services. In other areas, Mrs Froehlinger said, one will have to live
with divergence and rely on other instruments, such as mutual

b. Specific areas 

Going into more detail, Mrs Froehlinger touched upon five areas,
specifically dealt with in the draft. 

   Establishment of Information Society service providers 

The proposal aims to remove the current legal uncertainty surrounding
this issue, by providing a definition of the place of establishment.
Mrs Froehlinger stressed that this is a key element for the proper
functioning of the Single Market. In addition, she explained that the
proposal prohibits special authorisation schemes for information
society services and sets out some information requirements that the
provider must fulfil in order to ensure transparency of its

   Commercial communications 

Subsequently, Mrs Froehlinger touched upon commercial communications.
The proposal defines what constitutes a commercial communication and
makes it subject to certain transparency requirements to ensure
consumer confidence and fair trading. In order to allow consumers to
react more readily to harmful intrusion, the proposal requires that
commercial communications by e-mail are clearly identifiable. In
addition, for regulated professions (such as lawyers or accountants),
the proposal lays down the general principle that commercial
communications are permitted, provided they respect certain rules of
professional ethics which should be reflected in codes of conduct to
be drawn up by associations representing such professions. 

   On-line conclusion of contracts 

Mrs Froehlinger stressed that the Commission feels that Electronic
Commerce will not fully develop if concluding on-line contracts is
hampered by certain form and other requirements, which are not adapted
to the on-line environment. To this end, Member States shall be held
to adjust their national legislation, in the sense that they are under
an obligation of result that on-line contracts can be concluded
validly. In addition, the proposal removes legal insecurity by
clarifying in certain cases the moment of conclusion of the contract,
whilst fully respecting contractual freedom. 

   Liability of intermediaries 

Furthermore, Mrs Froehlinger provided details on liability of
intermediaries. To facilitate the flow of electronic commerce
activities, there is a need to clarify the responsibility of on-line
service providers for transmitting and storing third party
information. To eliminate the existing legal uncertainty and to bring
coherence to the different approaches that are emerging at Member
State level, the proposal establishes a mere conduit exemption and
limits service provider's liability for other intermediary activities.
Mrs Froehlinger added that a careful balance is sought between the
different interests involved in order to stimulate co-operation
between different parties thereby reducing the risk of illegal
activity on-line. 


Finally, in the area of implementation, Mrs Froehlinger stressed that
the Commission has sought to ensure that existing EC and national
legislation is effectively enforced. By strengthening enforcement
mechanisms, the development of the Internal is stimulated. This is
achieved by encouraging the development of codes of conduct at
Community level, by stimulating administrative co-operation between
Member States and by facilitating the setting up of effective
cross-border alternative dispute resolution systems. For similar
reasons the proposal also requires Member States to provide for fast,
efficient legal redress appropriate to the on-line environment. 

Thanking Mrs Froehlinger for her highly interesting contribution, the
Chairman gave the floor to Mr Roberts from DG XXIV, enabling him to
provide information on the Council Recommendation on Consumer
Dimension of the Information Society. 


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