Many online retailers believe that when selling goods in an EU country, they can simply apply the legislation of their own country, even if they are aware that, in principle, the law of the supply country applies. In simple terms, they believe that this somehow also includes Switzerland. However, it is not as simple as that. While Brussels has simplified the rules for online trading within the EU by providing a host of guidelines, special national provisions which must be complied with still exist for France, Belgium and Great Britain, for example. And then there’s the legal situation in Switzerland, which is not an EU country and has its own specific legislation.
In this post, we will start by explaining the legal situation in EU supply countries (Belgium, France and Great Britain), followed by the legal situation in Switzerland. For an online retailer, the most important aspects to consider are the provisions governing the conclusion of contracts, general terms and conditions, pricing law, warranty regulations and mandatory use of the national languages. The right to withdraw has been fully harmonized in EU countries and, therefore, does not need to be explained. The exception to this is, of course, Switzerland, where EU law does not apply.
France intervenes heavily in defining the contractual freedom of retailers, especially in terms of consumer protection.
In France, a product description in a retailer's online shop must be viewed as a binding contractual offer. To give a practice example, a retailer is bound to honor even inaccurate price information. The mandatory information that online retailers must display in their online shops is harmonized throughout the EU. However, France goes a step further by requiring online retailers to inform consumers of the provisions of warranty law in their general terms and conditions. They may be fined should they fail to do so.
The provisions of pricing law are relatively strict. Hence, mandatory detailed rules apply to price discounts on sale items. The competition authorities may punish infringements with heavy fines.
France’s consumer warranty law provisions are similar to the EU standard. However, from 2016, the burden of proof rule relating to the existence of a defect on reception of goods, which places the responsibility on online retailers, is due to be amended. Until now, EU directives considered that the defect already existed at the time the goods were received, if the defect arose within 6 months and was reported to the online retailer. From 2016, this period will be extended to 2 years.
This represents a significant problem for online retailers: when a defect is reported, they must prove within 6 months that the problem occurred after the customer received the goods, if they wish to defend themselves against consumer claims. This may prove very difficult, or even impossible, in certain cases. Added to that is France’s two-tier warranty law which stipulates that consumers are able to lodge claims on hidden defects. However, the buyer must always provide proof of a hidden defect. With the new law, the two-year warranty period only commences when the defect is discovered and not when the goods are delivered.
Finally, in France, the French language is mandatory to the creation of an online shop and infringements may be punished by fines. Furthermore, consumers may invoke the fact that they did not understand information e.g. relating to the right to cancel, if it is not written in French, which grants a one-year right to cancel.
Belgium is (at least from a French point of view) the little sister of France. Many Belgian rules concerning online trading are similar to those in France.
However, in Belgium, unlike in France, product descriptions in online shops are not seen as binding contractual offers for online retailers. Belgian law is relatively strict regarding the validity of online retailers' general terms and conditions. Online retailers must ensure that Belgian customers are only able to complete the ordering process once they have declared that they have read and accepted the general terms and conditions. Otherwise, the general terms and conditions do not apply to the purchase of goods.
The language issue is particularly important in Belgium. Belgium has three official languages, so online retailers should provide an "opt-in" clause for application of the general terms and conditions in French, Dutch and German. Retailers' mandatory information, which they must display on their websites, must be presented in a specific format in Belgium. Where there is no right to cancel, online retailers must insert the following statement in bold on their websites (in the three official languages): "The buyer does not have the right to withdraw from the sale/purchase". If this information is not visible, buyers will be treated as if they have a right to withdraw.
The rules governing pricing law, particularly for sale items, are similar to those in France. In terms of price labeling, Belgian law specifically stipulates that shipping/delivery costs must be included in the price. The provisions of warranty law are similar to those in France. And of course using the official language is mandatory in Belgium, which becomes particularly complex given that there are three official languages (French, Dutch, German).
Great Britain is the antithesis of France, so to speak. British law has significantly less influence over the contractual freedom of online retailers. A retailer-friendly approach is adopted regarding the conclusion of contracts and the validity of general terms and conditions.
However, the situation is different when it comes to pricing law and warranty law.
Online retailers can offer price discounts, but only if they refer to a comparison price (the online retailer's previous price, another retailer's price, the recommended retail or manufacturer's price). Special discounts for sale items and introductory prices should not apply for longer than a month.
The provisions of warranty law are similar to the EU standard. However, in British law, there is no difference between used and new goods. Consumer warranty claims are subject to a limitation period of 6 years (5 years in Scotland) following the receipt of goods.
Switzerland is not an EU country and has its own contract law, which is more retailer-friendly. Specific characteristics apply to mandatory information, the right to cancel, pricing law, product liability law and import legislation.
Switzerland does not require any comprehensive pre-contractual information regarding the web presence of online retailers as is the case in Germany. However, in many respects, Switzerland has adopted EU standards, meaning that it is advisable to apply the usual EU standard information requirements when supplying goods to Switzerland. There is no right to cancel as there is in the EU.
Swiss price labeling law is very strict and complicated. In principle, the final price, including taxes and customs duties, must be shown. However, because of complicated Swiss customs law, this is barely possible without professional help.
In Switzerland, advertising with price discounts is subject to strict rules. Online retailers must display a comparison price, which they have previously applied or refer to a comparison price, which competitors have charged. In the case of a comparison price based on their own previous price, a 2-month discount period applies.
As far as product liability is concerned, online retailers can import goods which comply with EU guidelines from the EU into Switzerland. However, there are numerous exceptions, meaning that online retailers should seek professional advice. This applies specifically to product groups, which are subject to a Swiss import ban (including, for example, foodstuffs, precious metals and animal products). In this case too, professional advice is essential.
About the author:
Max-Lion Keller is a lawyer and partner in the law firm IT-Recht in Munich, which specializes in the field of e-commerce law. IT-Recht already protects several thousand online shop operators with its dissuasion secured legal texts, meaning that it is the market leading law firm in terms of continuous support for online retailers.
In addition, as part of its cost-effective general terms & conditions maintenance service, IT-Recht provides dissuasion secured legal texts for numerous domestic and foreign online platforms: http://www.it-recht-kanzlei.de/Service/rechtstexte_fuer_onlineshops.php
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