COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT pursuant to the second subparagraph of Article 251 (2) of the EC-Treaty concerning the Council common position on the proposal for a Directive on certain legal aspects of Information Society services, in particular electronic commerce, in the Internal Market (Directive on Electronic Commerce)

1998/0325 (COD)

COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT pursuant to the second subparagraph of Article 251 (2) of the EC-Treaty concerning the

Council common position on the proposal for a Directive on certain legal aspects of Information Society services, in particular electronic commerce, in the Internal Market (Directive on Electronic Commerce)

1. Background

The Commission adopted its proposal for a Directive on 18 November 1998 [1].

[1] COM(1998)586 final of 18.11.1998, OJ C 30, 5.2.1999, p. 4.

The proposal was transmitted to the European Parliament, the Council and the Economic and Social Committee on 23 December 1998.

The Economic and Social Committee adopted its opinion on 29 April 1999 [2].

[2] OJ C 169, 16.6.1999.

On 6 May 1999, the European Parliament adopted, on first reading and in accordance with the co-decision procedure (Article 251), a legislative resolution approving, subject to amendments contained in this resolution, the Commission's proposal and calling on the Commission to alter its proposal accordingly.

On 17 August 1999, pursuant to Article 251 of the EC Treaty, the Commission adopted an amended proposal incorporating, in letter or in spirit, a majority of the amendments voted by European Parliament on first reading,

On 28 February 2000 the Council, acting pursuant to Article 251 (2) of the EC Treaty, adopted a common position on the proposal for a Directive.

This communication sets out the Commission's opinion on the Council common position, pursuant to Article 251 (2) of the EC Treaty.

2. Purpose of the Directive

The proposed Directive aims at ensuring that Information Society services can benefit from the Internal Market principles of free movement of services and freedom of establishment and that the service providers can provide their services throughout the European Union without legal frontiers. Information Society services are defined as those provided normally against remuneration, at a distance, by electronic means and at the individual request of the recipient of the service. The proposed Directive will establish specific harmonised rules where they are necessary to ensure that businesses and citizens can supply and receive Information Society services throughout the European Union, irrespective of frontiers. These rules include a definition of where operators are established, transparency and information requirements for operators and for commercial communications, the treatment of electronic contracts, liability of intermediary service providers, out-of-Court dispute settlement, court actions and the role of and co-operation between national authorities. In other areas the Directive will build on existing Community instruments which provide for harmonisation in specific sectors or of specific questions, especially in the area of consumer protection. Furthermore, with the exception of some specific areas, for which there are explicit derogations, the Directive provides that normally Information Society services are subject to the national laws of the Member State where the provider is established and that other Member States where these services can be received shall not restrict the freedom to provide Information Society services.

3. Comments on the Council common position

3.1 Summary of the Commission's position

The Commission is satisfied that the common position has incorporated the amendments of the European Parliament which have been accepted by the Commission and have been incorporated in the Commission's amended proposal.

Moreover, the Commission is satisfied that the Council common position maintains the overall balance of the proposal and fully preserves its Internal Market approach, which has been unequivocally supported by the European Parliament at the first reading. In particular the Council, in line with the European Parliament's approach, decided against adding significant new general derogations to the Internal Market principles.

Most of the changes introduced by the Council in comparison with the Commission's amended proposal, are of a clarifying nature and either do not - or at least not significantly - change the substance of the amended proposal and its overall balance, which takes account of all the various interests involved.

The most significant changes concern the complete deletion of comitology in all relevant areas and the treatment of electronic contracts where the clarification of the moment of contract formation has been deleted. In order to facilitate a rapid adoption of the Directive, which is a matter of urgency, the Commission has accepted these changes to its amended proposal.

3.2. Analysis of the Council common position

3.2.1 The European Parliament's amendments.

On first reading, European Parliament adopted 60 amendments to the Commission's original proposal.

In its amended proposal, the Commission accepted and incorporated, either verbatim or as regards their spirit, a majority of these, i.e. 37 amendments out of 60 (N° 1, 2, 3, 4, 5, 6, 7, 9, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 22, 24, 25, 29, 32, 33, 34, 37, 38, 40, 42, 73, 43, 55, 56, 57, 62, 65 and 67).

3.2.2. The European Parliament's amendments accepted by the Commission and incorporated into the common position.

The Council has incorporated all but three of the amendments accepted by the Commission, in whole or in part, at least as regards their spirit.

Amendments 1, 2, 4, 6, 7, 18, 20, 24, partially 37, 40, 43, 55, 56, 57, and 62 have been incorporated verbatim.

Amendments 3, 5, 9, 11, 12, 14, 15, 16, 17, 19, 22, 25, 29, 32, 33, 34, partially 38, 67 and 73 have been adopted in spirit with the following modifications compared to the original wording:

In amendment 3, the word "all" before "legal aspects" has been replaced by "certain".

In amendment 5 the words "whereas such co-ordination should also contribute to the establishment of..." have been added before "a common and strong negotiating position in international fora".

In reply to amendment 9, former recital 7 has been reworded as requested by the Parliament. The part according to which "the Directive is without prejudice to rules on private International law" has been deleted. Instead, new recital 23 explains that the Directive neither aims to establish additional rules on private International law relating to conflicts of law, nor does it deal with the jurisdiction of Courts. In addition it has been clarified that provisions of the applicable law designated by rules of private International law must not restrict the freedom to provide Information Society Services as established in the Directive.

Amendment 11 has been incorporated in the common position but has also partially been reworded to take into account the existence of a prohibition on unsolicited commercial communication by e-mail in certain Member States.

Amendment 12 has been incorporated in the common position. The indicative list of Community Directives which apply to Information Society Services has been further extended.

Amendment 14 has been incorporated in the common position. However the word "stopping" has been replaced by "halting" and the final part concerning new technical surveillance instruments has been detailed.

In reply to amendment 15, recital 50 explains the purpose of a similar time scale for the present Directive and the proposed Directive on Copyright and related rights in the Information Society.

Amendment 16 has been partially incorporated in the common position, however modified by replacing "laying down the legal conditions to enable complaints to be lodged across borders and by electronic means" by "request Member States to ensure that appropriate court actions are available, and " whereas Member States should examine the need to provide access to judicial procedures by appropriate electronic means".

Amendment 17 has been incorporated in the common position. However the words "open networks such as" have been added before "the Internet".

In amendment 19, which is incorporated in the common position, the words "must co-operate" have been replaced by "need to consult each other".

In amendment 22, which is reflected in the common position, references to "developing countries" and "other trading partners" have been added.

Amendment 25 has been incorporated in the common position. However, the text has been shortened by deleting explicit references to the relevant Treaty provisions.

Amendment 29 has been incorporated in the common position, however it has been partly reworded.

In reply to amendment 29, the definition of Information Society services in Article 2a has been replaced by a reference to the definition established in Article 1 paragraph 2 of Directive 98/34/EC as amended by Directive 98/48/EC of 20 July 1998.

The definition of "consumer", proposed in amendment 32, and incorporated in the common position has been modified in order to be coherent with the definition in the most recent proposals in this area.

Amendment 33 has been incorporated into the common position but reworded by clarifying that the relevant obligations apply in addition to all "other information requirements established by Community law".

Amendment 34 has been incorporated into the common position but slightly reworded by adding the words "in addition to other information requirements established by Community law".

In reply to amendment 38, a new paragraph 2 has been added in Article 7, which provides for an obligation for service providers to consult and respect available opt-out registers for commercial communications.

Amendment 67 has been incorporated in the common position but slightly reworded. Additional items have been added which necessitate particular attention in the context of a future review of the Directive.

Article 11(2) has been modified to reflect a part of amendment 73, requesting service providers to make available effective and accessible technical means to identify and correct input errors prior to the placing of the order.

The table annexed to this communication, shows in detail where and how the amendments of the European Parliament have been incorporated in the text of the Council common position.

3.2.3 The European Parliament's amendments accepted by the Commission but rejected by the Council

Amendment 13 relating to Recital 15 calling on Member States to abstain from prohibiting or restricting the use of cryptographic tools was not accepted by the Council, since it was felt that this amendment went beyond the Directive's scope of application.

Amendment 42, aiming at reducing the number of steps of contract formation was not incorporated since the Council common position does not deal any more with the issue of contract formation (see comments on Article 11).

Amendment 65 concerning the review clause and aiming at introducing an obligation to produce statistical results, was not accepted since it was felt that statistical results may not be available for all the different items concerned.

3.2.4 The European Parliament's amendments not incorporated by the Commission in its amended proposal but incorporated in the common position.

The Council has incorporated in its common position two of European Parliament's amendments adopted in first reading but not incorporated in the Commission's amended proposal.

This concerns firstly amendment 23 which extends the scope of recital 63 (former recital 22) to measures which Member States might adopt to achieve certain objectives, in particular linguistic diversity and the protection of national and regional specificities and cultural heritage. Although the Commission did not incorporate this amendment in its amended proposal, due to its unclear wording, the Council has incorporated this amendment with a new wording in the common position.

This concerns secondly amendment 64 which adds the violation of human dignity in Article 3(4) a) i) (formerly Article 22(3)) as one of the reasons for Member States which may allow a restriction of the freedom to provide Information Society services, provided all the other conditions in Article 3(5) are met. The Council accepted this amendment although it was not incorporated in the Commission's amended proposal.

3.2.5 Modifications introduced by the Council which do not relate to amendments of the European Parliament.

Furthermore the Council has introduced other modifications to the Commission's amended proposal which do not relate to the European parliament's amendments and which are explained below.

Change of the Title. The title of the proposed Directive has been changed into "Directive of the European Parliament and of the Council on certain legal aspects of Information Society services, in particular electronic commerce, in the Internal Market" ("Directive on electronic commerce")".

Changes to recitals:

New recital 8 has been introduced which explains that the Directive does not aim at harmonising the field of criminal law as such.

Amended recital 13 explains that the Directive does neither aim to establish rules on fiscal obligations, nor to pre-empt the elaboration of Community instruments concerning fiscal aspects of electronic commerce.

New recital 14 explains that the Community Directives relating to the protection of personal data are fully applicable to Information Society services and that the present Directive shall be applied in full compliance with those Directives, in particular as regards commercial communications.

New recital 16 explains the meaning of "gambling activities" which are excluded from the scope of application of the Directive.

Amended recital 17 explains the scope of the definition of Information Society services within the meaning of Directive 98/48/EC.

New recital 21 explains the scope of the co-ordinated field as defined in Article 2 (h).

New recital 25 recalls that national courts dealing with disputes under national private law can take measures to derogate from the freedom to provide information society services in conformity with the provisions of the Directive.

New recital 26 stresses that investigative and other measures under national criminal law taken in conformity with the conditions established in this Directive, do not require prior notification to the Commission.

New recital 27 explains the link between this Directive and existing Directives and ongoing and future work in the area of financial services.

New recital 28 explains that postal services covered by Directive 97/67/EC and consisting of the physical delivery of printed e-mail messages are not covered by Article 4.

New recital 31 underlines that Member States which allow the sending of unsolicited commercial communications by e-mail without the prior consent of the recipient, need to ensure that the service providers consult regularly and respect available opt-out registers.

New recital 33 recalls that the Directive complements Community and national law relating to the regulated professions.

The possibility for Member States to maintain general or specific legal requirements for electronic contracts and in particular concerning secure electronic signatures is highlighted in new recital 35.

New recital 36 explains the restrictions on the use of electronic contracts which may be maintained by Member States.

New recital 37 explains that Member States' obligations to remove obstacles for the use of electronic contracts concern only legal requirements and not requirements of a practical nature.

New recital 38 recalls that the removal of obstacles for the use of electronic contracts has to be effectuated in conformity with the legal requirements enshrined in Community law.

New recital 39 explains the obligation of service providers to provide information relating to electronic contracts and the placement of an order by way of electronic means.

The conditions to be met in order to benefit from the exemptions from liability for intermediary service providers are explained in new recital 42.

New recital 43 further explains the conditions for the exemptions for "mere conduit" and "caching" whereas new recital 44 underlines that a service provider who deliberately collaborates with a recipient of his service in order to undertake illegal activities, cannot benefit from these exemptions.

The possibility of injunctions against service providers in respect of infringing activities is further explained in new recital 45.

New Recital 46 underlines that the removal or disabling of access to information by hosting service providers has to be undertaken in the observance of the principle of freedom of expression.

New recital 47 recalls that Member States are only prevented from imposing on service providers monitoring obligations of a general nature, which does, however, not concern monitoring obligations in a specific case.

New recital 48 recalls that Member States may impose on service providers who host third party information, duties of care in order to detect and prevent certain types of illegal activities.

New recital 49 stresses the voluntary nature of codes of conduct.

A reference to Directive 98/27/EC relating to actions for injunction aimed at the protection of the collective interests of consumers is made in new recital 53.

New recital 54 explains the sanctions to be provided for by Member States in respect of breaches of the obligations established in the Directive.

New recital 55 explains the relationship of the Directive and the law applicable to contractual obligations relating to consumer contracts.

New recital 57 recalls the jurisprudence of the Court of Justice concerning the circumvention of national laws by service providers.

Finally, former recitals 24 and 25 of the Commission's original proposal which contained references to Council Regulation 2299/89 of 24 July 1989 on a code of conduct for computerised reservation systems and Council Regulation 2027/97 on air carrier liability in the event of accidents and the Warsaw Convention of 12 October 1929, were deleted.

Changes to Articles

Article 1: Objective and scope

The Council added in Article 1 paragraph 3 "and national legislation implementing them, insofar as this does not restrict the freedom to provide Information Society services" after the words "as established by Community acts" in order to clarify that the freedom to provide Information Society services, cannot be restricted by national measures implementing Community Directives in other fields.

The Council further introduced a new paragraph 4 clarifying that the Directive neither establishes additional rules on Private International Law nor deals with the jurisdiction of courts.

In order to improve the readibility former Article 22 paragraph 1 "Exclusions and derogations" (from the scope of application), have been incorporated in Article 1.

New paragraph 5 (a) to (c), reproduces the areas listed in former Article 22 paragraph 1, however adding a new area in paragraph 5(c) concerning questions relating to agreements or practices governed by cartel law.

New paragraph 5(d) reproduces activities of Information Society services listed in former Annex I with the following modifications which aim at clarifying their scope:

- the activities of notaries or equivalent professions to the extent that they involve a direct and specific connection with the exercise of public authority;

- the representation of a client and defence of his interest before the Courts;

- gambling activities which involve wagering a stake with monetary value in games of chance, including lotteries and betting transactions.

The possibility for the Commission to amend the list of activities provided in the former article 22(1) c) has been deleted.

Finally a new paragraph 6 has been added clarifying that the Directive does not affect measures taken at Community or national level in the respect of Community law, in order to promote cultural and linguistic diversity and to ensure the defence of pluralism.

Article 2: Definitions

c) Regarding the definition of "established service provider": the words "for an indeterminate duration" have been replaced by "for an indefinite period".

New g) a new definition has been introduced defining the term "regulated profession" by reference to the definitions established in the relevant existing community Directives.

h) the definition of "co-ordinated field" has been explained by a more detailed description and the indication of examples of issues covered or not covered by this definition.

Article 3: Internal Market

Former paragraph 3, explaining the application of Article 3 (1) to Articles 9, 10 and 11, has been deleted.

Paragraph 2 of former Article 22, specifying that Article 3 paragraphs 1 and 2 do not apply to the fields referred to in former Annex II has been incorporated in Article 3 as new paragraph 3.

Paragraph 3 of former Article 22 has likewise been incorporated in Article 3 as new paragraphs 4 to 6 with the following modifications clarifying the scope of the derogations concerned :

New paragraph 4:

- (a) the measures shall be:

(i) necessary for one of the following reasons:

- public policy, in particular the prevention, investigation, detection and prosecution of criminal offences, including the protection of minors and the fight against any incitement to hatred on grounds of race, sex, religion or nationality, and violations of human dignity concerning individual persons

- the protection of public health,

- public security, including the safeguarding of national security and defence,

- the protection of consumers, including investors

...

- (b) prior to taking the measures in question and without prejudice to court proceedings, including preliminary proceedings and acts carried out in the framework of a criminal investigation, the Member State has:

- asked the Member States referred to in paragraph 1 to take measures and the latter did not take measures or they were inadequate ;

- notified the Commission and the Member State referred to in paragraph 1 of its intention to take such measures.

New paragraph 5 is slightly reworded in comparison to former paragraph 3(c) of Article 22 without, however, changing the substance.

New paragraph 6 contains a modification in comparison to paragraph 3(d) of former Article 22 in that it now provide for a mandatory requirement for the Commission to decide on the compatibility of notified measures with Community law.

Article 4: Principle excluding prior authorisation

Paragraph 1 has been slightly reworded and simplified, without, however, changing its substance.

Article 5: General information to be provided

In paragraph 1, it has been clarified that the specific information requirements established in this Article apply in addition to other information requirements established by Community law.

b) the term "address" has been replaced by "geographic address".

d) the words "or similar public register" have been added after "trade register" and "or equivalent means of identification" after "registration number".

e) has been reworded and simplified without, however, changing the substance.

f) the second indent has been split and the reference to the Member States in which the services are regularly provided has been deleted.

g) the reference to the VAT number has been completed by indicating the relevant Community Directive.

Paragraph 2 has been reworded in order to clarify the requirements concerning price indications.

Article 6: Information to be provided

In the introductory paragraph, it has been clarified that the specific information requirements established in this Article apply in addition to other requirements established by Community law. Furthermore, it has been clarified that Article 6 concerns only those commercial communications which are part of an Information Society service.

c) the words "where authorised" and "unequivocally" have been replaced by "where permitted" and "unambiguously" respectively.

d) idem.

Article 7: Unsolicited commercial communication

In paragraph 1, it has again been clarified that the requirement in Article 7 applies in addition to requirements established in other Community directives. Furthermore, it has been clarified that this requirement concerns only those Member States who permit the sending of unsolicited commercial communications.

Article 8: Regulated professions

In paragraph 1 it has been clarified that this requirement for Member States concerns only those commercial communications which are part of or constitute an Information Society service.

In paragraph 2 a reference to the autonomy of professional bodies and associations has been inserted.

In paragraph 3, the possibility for the Commission to lay down requirements in conformity with the comitology procedure in former Article 23 has been deleted. In addition, it has been clarified that in drawing up any new community initiatives in this field, the Commission shall act in close co-operation with the relevant professional associations and bodies.

New paragraph 4 clarifies that the Directive applies in addition to Community Directives concerning access to and the exercise of activities of regulated professions.

Article 9: Treatment of contracts

In paragraph 1, the words "prevent the effective use" have been replaced by "do not create obstacles". Furthermore, " electronically" has been replaced by "by electronic means".

In paragraph 2, "following contracts" has been replaced by "all or certain contracts falling into one of the following categories".

New a) has been introduced in order to add a new category of contracts that create or transfer rights in real estate, except for rental rights.

Former a) has been merged with former b) and reworded to clarify the category of contracts requiring the involvement of courts, public authorities and professions exercising public authority.

New c) has been introduced to add a further category of contracts concerning suretyship granted and collateral securities furnished by persons acting for purposes outside their trade, business or profession.

Former c) and d) have been merged into new d).

Paragraph 3 has been reworded without, however, changing its substance in order to clarify Member States' obligation to notify the above categories to the Commission. A new obligation for Member States has been introduced to establish regular reports on the application of paragraph 2 and the reasons for which they maintain a derogation from paragraph 1 for the category established in paragraph 2(b).

Article 10: Information to be provided

Paragraph 1 has been reworded. It has been clarified that these specific information requirements apply in addition to other information requirements established by Community law.

In a), the previous wording "different stages" has been replaced by "different technical steps".

In b), it has been clarified that this information requirement concerns the question whether the contract will be filed by the service provider.

In c) the terms "expedients" and "handling errors" have been replaced by "technical means" and "input errors". It has been clarified that the relevant information needs to be given prior to the placing of the order.

New d) has been added to introduce a new information requirement concerning the languages offered for the conclusion of the contract.

Former paragraph 2 has been deleted and replaced by the slightly reworded provisions of former paragraph 3.

New paragraph 3 provides that contract terms and general conditions must be made available to the recipient in a way that allows him to store and reproduce them.

New paragraph 4 clarifies that Article 10 (1) and (2) are not applicable to contracts concluded exclusively by exchange of electronic mail or by equivalent individual communications.

Article 11: Placement of the order

This Article does not determine anymore the moment at which the contract is concluded but deals only with the order, the acknowledgement of receipt and means of correcting input errors. The title has been changed accordingly. Paragraph 1, first indent, stipulates that the service provider has to acknowledge the receipt of the recipient's order without undue delay and by electronic means;

Paragraph 1 second indent reproduces former paragraph 1b) and clarifies that the order and the acknowledgement of receipt are deemed to be given when the parties to which they are addressed are able to access them.

Paragraph 3 clarifies that paragraph 1 first indent and paragraph 2 are not applicable to contracts concluded exclusively by exchange of electronic mail or by equivalent individual communications.

Article 12: Mere conduit

In paragraph 1 the reference to the possibility of a prohibitory injunction has been deleted. Instead the possibility of injunctions has been highlighted in new paragraph 3.

Article 13: Caching

Idem.

In addition in c) and d) the words "consistent with industrial standards" have been replaced by "widely recognised and used by industry" and in d) the words "lawful use" have been introduced before "of technology".

In e), "bar", "barred" and "barring" have been replaced by "disable", "disabled" and "disablement" respectively and "competent authority" has been replaced by "a court or an administrative authority".

Article 14: Hosting

In paragraph 1 the reference to the possibility of a prohibitory injunction has been deleted. Instead the possibility of injunctions has been highlighted in new paragraph 3.

Article 15: No general obligation to monitor

The word "general" has been inserted in the title of the Article.

New paragraph 2 clarifies that the Directive does not affect Member States' possibility to establish obligations for Information Society providers to co-operate with the competent authorities.

Article 16: Codes of conduct

In paragraph 1 (b) the word "voluntary" has been added before "transmission". The reference to the possibility for the Commission to examine the compatibility of the draft codes of conduct with Community law has been deleted.

The last part of Article 16 paragraph 2 has been reworded. A reference to the need to consult associations representing the visually impaired and disabled has been inserted.

Article 17: Out-of-court dispute settlement

In paragraph 2 the reference to specific procedural principles has been deleted and replaced by the requirement of adequate procedural guarantees for the parties concerned.

Article 18: Court actions

Paragraph 1 has been slightly redrafted and clarified.

In paragraph 2 the mere reference to Directive 98/27/EC has been replaced by an explicit modification of the Annex of the latter Directive in which a reference to the present Directive will be added.

Article 19: Cooperation

The paragraphs 1 and 2 have been slightly reworded without however changing the substance of the provisions.

In paragraph 3, the words "in conformity with national law" have been incorporated before "provide the assistance...".

In paragraph 4, the words "within their administration" have been deleted and the words "at least" have been added before "by electronic means".

In a) it has been clarified that the relevant information covers also the complaint and redress mechanisms available in the event of disputes, including practical aspects involved in the use of such mechanisms. b) has been reworded and former c) has been incorporated into it.

In paragraph 5, the words "shall ensure" have been replaced by "shall encourage". Furthermore an obligation for the Commission to communicate the notified decisions to other Member States has been added.

Paragraphs 6 and 7 concerning the possibility for the Commission to lay down rules for the co-operation between Member States under the comitology procedure provided in former Article 23 and the possibility to convene the committee to examine difficulties concerning the application of Article 3 have been deleted.

Former Article 20: Electronic media

Article 20 which provided for the Commission to take measures in accordance with the appropriate comitology procedure to ensure the proper functioning of electronic media between Member States, has been deleted.

Article 20: Sanctions

The latter part of this Article requesting Member States to notify to the Commission the measures taken to enforce the Directive, has been deleted.

Former Article 22: Exclusions and derogations

The former Article 22 has been deleted. Its content has been incorporated partly into Article 1 paragraph 5 (former Article 22 paragraph 1), partly in Article 3 paragraph 3 (former Article 22 paragraph 2) and partly in Article 3 paragraphs 4-6 (former Article 22 paragraph 3).

Former Article 23: Committee

Former Article 23 has been deleted.

Article 21 (ex-24): Re-examination

Paragraph 1 has been slightly reworded. The requirement that the report of the Commission shall in particular take into account crime prevention, the protection of minors, consumer protection and the proper functioning of the Internal Market has been added.

Paragraph 2 has also been reworded. Apart from incorporating a number of items listed in Amendment 67 of the European Parliament, it has been highlighted that the possibility of applying the Internal Market principles to unsolicited commercial communications requires specific analysis.

Article 22 (ex-25): Transposition

The former title "Implementation" has been changed into "Transposition" and the period of transposition has been extended from 12 to 18 months.

Annexes :

The former Annex I has been included in Article 1.

Annex II consequently has become the Annex.

Fifth indent concerning the freedom of the parties to choose the law applicable to their contract has been added in order to clarify that contractual freedom is not affected by Article 3.

Seventh indent concerning the formal validity of contracts creating or transferring rights in real estate has been added.

In eight indent, it has been clarified that this derogation concerns only the permissibility of unsolicited commercial communications.

4. Conclusions.

The Commission welcomes the adoption of the Council common position on the Proposed Directive of the European Parliament and of the Council on certain legal aspects of Information Society services, in particular electronic commerce, in the Internal Market ("Directive on Electronic Commerce") which should allow a rapid adoption and implementation of the proposal and the establishment of a fully workable Internal Market for Information Society services.

ANNEX 1

Analysis of European Parliament's amendments

>TABLE POSITION>

ANNEX 2

Joint Commission and Council declaration on commercial communications

"The Council and the Commission recognise the importance of and the need for further initiatives with respect to rules regarding businesses' market behaviour in order to ensure an adequate level of consumer protection within the Internal Market. Further initiatives or rules regarding market behaviour will contribute to a more predictable legal framework and avoid risks of unfair competition between business established in different Member States.

The Council and the Commission recognise that consumer confidence in Information Society Services is a prerequisite for the positive development of e-commerce. The Commission will propose within one year after the adoption of this Directive adequate further initiatives concerning businesses' market behaviour within the framework of its Internal Market policy on commercial communications".

Commission Declaration concerning the Council Declaration on consumer protection

"The Commission recalls its declaration to the minutes of the Consumer Council of 3 November 1998 relating to the Council Resolution on the Consumer Dimension of the Information Society. In this declaration the Commission underlined that the application of the law of the consumer's country of residence to consumer-contracts should be without prejudice to Community law, which includes the present Directive. Furthermore, the Commission reserved its position concerning future legislative proposals."

Commission declaration on cyber crime

"The Commission recognises the importance of the fight against cyber crime and the need to continue to develop a coherent approach throughout the different Community policies concerned. In addition to forthcoming Commission initiatives in this field, the Commission will give the fight against cyber crime particular attention within the context of the regular reports on the application of this Directive and the need for its adaptation to legal and technological developments."