Implementation of the
E-Commerce Directive
Mario Sõrm
Belgrade
26.10.2010
.ee
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1.34 million inhabitants
Gross monthly wage 779 EUR
Internet usage 76% (ages 16-74)
Broadband penetration 62%
Households with Internet access 350700
92.4% of income tax declarations completed online (2009)
Internet shoppers 172000, 17%
More than 1 million ID cards issued
About 1000 Estonian online-shops
Broadband penetration in EU 27
90
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70
60
50
40
30
20
10
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E-commerce in EU 27
70
60
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40
30
20
10
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What’s holding e-commerce back in
the single market?
For consumers:
For e-commerce traders:
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preferences
confidence
access to the Internet
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Regarding cross border sales:
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language and cultural barriers
cross-border delivery, returns, payments
unwillingness to disclose credit card details
lack of knowledge of foreign traders
problems with cross-border enforcement
and redress
lack of information and advice on crossborder shopping
uneven level of consumer protection in the
EU
higher risk of fraud and non-payment
different fiscal regulations, mainly VAT
fragmentation of consumer protection
legislation throughout the EU
higher cost of resolving complaints and
conflicts cross-border
higher cost for cross-border delivery
higher cost of after-sales service
language differences
E-Commerce Directive framework
Internal market clause
Info requirements
Liability provisions
Blocking of services
Commercial coms
Mere conduit
Court actions
Regulated professions
Caching
No prior authorization
Info for contracts
Hosting
Electronic contracts
Cooperation
No monitoring
Codes of conduct
Dispute settlement
Implementation of the directive in
Estonia
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Harmonised in 14.04.2004
Information Society Services Act
Law of Obligations Act & General Principles of the Civil Code Act harmonised articles 9-11
(contracts concluded by electronic means) of the directive
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Supervisory authorities:
Technical Surveillance Authority (article 5 of the ECD – general information requirements)
Consumer Protection Authority (as analogous general information requirements are also
included in the Consumer Protection Act and the Trading Act)
Consumer Protection Authority (article 6 of the ECD – commercial communications, general
rules of the Advertising Act apply)
Data Protection Authority (as the question of article 7 - unsolicited commercial
communications has been addressed by directive 2002/58)
Police and local governments – trading without a registration
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Problem areas
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Low consumer confidence in e-commerce
Disregarding information requirements
No information displayed about consumers right of withdrawal and possibilities for
submitting complaints
Requiring consumers to make a full payment in advance
Trading without a registration in the Register of Economic Activities
Limited possibilities to effectively shut down rogue traders’ online shops
During 2009, 133 complaints and 348 queries concerning e-commerce were submitted to
the Consumer Protection Authority
Generally, traders are not aware of their legal obligations and shoppers about their legal
rights
Majority of the problems in Estonia and the EU single market have little to do with the
application of the E-Commerce Directive, but more to do with areas not covered by the
directive
Solutions
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Low consumer confidence
trustmarking initiatives from the business community in
cooperation with Consumer Protection Authority
Disregarding information requirements
more rigorous enforcement / educating
entrepreneurs
No information displayed about consumers right of withdrawal and possibilities for
submitting complaints
more rigorous enforcement / educating entrepreneurs
Requiring consumers to make a full payment in advance
change in the legislation, full
advance payment legal
Trading without a registration in the Register of Economic Activities
more
rigorous
enforcement
Limited possibilities to effectively shut down rogue traders’ online shops
still thinking 
Non-compliance with the directive
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Non-compliance with the information requirements (articles 5, 6, 10) of the ECD is quite
frequent, but quite straightforward and simple – the information is either there or not
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ElectronicGoodsSweep
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First phase sweep in May 2009:
55% out of 369 checked websites showed irregularities
25% of checked sites misled the buyers about the total price of goods
18% of checked sites had missing or incomplete details of the trader
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Follow up:
16% showed irregularities
6% still misled the buyers about the total price of goods
5 % still had missing or incomplete details of the trader
Liability of intermediary service
providers
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Safe harbour provisions of the E-Commerce Directive (articles 12-15) have generated a lot of
complex legal issues in the Member States
These provisions offer safe harbour from criminal liability, pecuniary liability and damages for
conduit providers (art 12), caching providers (art 13), hosting providers (art 14)
Limitations on liability do not affect the possibility of injunctions by courts or administrative
authorities
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1) injunctions by courts and administrative authorities to prevent infringements v no general
obligation to monitor (art 15)
2) How does direct or indirect gain by a service provider from infringing activities of the user
influence the possibility of obtaining safe harbour?
Injunctions & general monitoring
obligation
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Liability provisions do not affect the possibility for a court or administrative authority of
requiring the service provider to terminate or prevent an infringement
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…such injunctions can in particular consist of orders by courts or administrative authorities
requiring the termination or prevention of any infringement, including the removal of illegal
information or the disabling of access to it. (preamble p 45)
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Member States shall not impose a general obligation on providers, when providing the
services covered by Articles 12, 13 and 14, to monitor the information which they transmit or
store, not a general obligation to actively seek facts or circumstances indicating illegal activity.
(article 15)
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Member States are prevented from imposing a monitoring obligation on service providers
only with respect to obligations of a general nature; this does not concern monitoring
obligations in a specific case and, in particular, does not affect orders by national authorities
in accordance with national legislation (preamble p 47)
SABAM v Scarlet & SABAM v Netlog
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Case C-70/10 SABAM v Scarlet Extended & Case C-360/10 SABAM v Netlog
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Is an injunction which obliges an intermediary service provider to use automatic filtering
methods to prevent copyright infringements in abstracto, without any compensation and
time limit, compatible with article 15 of the E-Commerce Directive?
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Is automatic filtering a monitoring obligation?
If it is, does it mean that filtering is prohibited by article 15 of the ECD?
If not, does it mean that such cases should be mostly decided on proportionality?
What are “monitoring obligations in a specific case”?
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Stokke v Marktplaats 3.05.2006, Zwolle District Court:
Prior filtering of advertisements for detecting illegality is not reasonable. Using a notice-andtake down procedure is sufficient
Safe harbour for hosting services
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Hosting service consists of storage of information provided by a recipient
Conditions for obtaining safe harbour
Does not have actual knowledge of illegality
Upon obtaining actual knowledge disables access or removes the information
Injunctions
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No general obligation to monitor
The exemptions from liability cover only cases where the activity of the service provider is of
a mere technical, automatic and passive nature, which implies that the service provider has
neither knowledge of nor control over the information which is transmitted or stored.
(preamble p 42)
The element of gain
No longer a mere technical, automatic and
passive service
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Lucky Comics v Tiscali 7.06.2006, 14.01.2010, Cour de
Cassation:
Tiscali is liable for hosting unauthorised copies of comics,
because offers advertising space on said hosted web pages
Jean-Yves Lambert v Myspace 22.06.2007, Tribunal de
Grande Instance de Paris:
Myspace is both a hosting provider and a publisher and is
liable for copyright infringement, due to the fact that they sell
advertising to every video posted on the site
Christian Carion & Nord-Ouest Productions v Dailymotion
13.07.2007, Tribunal de Grande Instance de Paris:
Dailymotion is a hosting provider, but still liable for copyright
infringement, as their business model was based on recipients
uploading copyrighted works
Louis Vuitton Malletier v eBay 30.06.2008, Tribunal de
Commerce de Paris:
eBay is liable for selling counterfeit goods and safe harbour
provisions don’t apply because eBay gains financially from
inducing the behaviour of it’s users
V.Leedo v Delfi.ee 10.06.2009, Supreme Court of Estonia
Delfi induces readers to comment on news articles it
publishes. The number of visitors depends on the number of
user comments, which influences the advertising revenues of
the website. Therefore, Delfi is financially interested in the
number of user comments, hence hosting liability provisions
to not apply
Safe harbour still obtainable, even if payment
is involved
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Joined Cases C-236/08 to C-238/08 Google Adwords,
European Court of Justice 23.03.2010:
It must be pointed out that the mere facts that the
referencing service is subject to payment, that Google sets the
payment terms or that it provides general information to its
clients cannot have the effect of depriving Google of the
exemptions from liability provided for in Directive 2000/31
…Thus, Google determines the order of display according
to, inter alia, the remuneration paid by the advertisers.
Advocate General Poiares Maduro was on a different
opinion:
Google’s display of ads stems from its relationship with the
advertisers. As a consequence, AdWords is no longer a neutral
information vehicle: Google has a direct interest in internet
users clicking on the ads’ links (as opposed to the natural
results presented by the search engine). Accordingly, the
liability exemption for hosts provided for in Article 14 of
Directive 2000/31 should not apply to the content featured in
AdWords
Mario Sõrm
Ministry of Economic Affairs and
Communications of Estonia
mario.sorm@mkm.ee