COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL AND THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE Digital contracts for Europe - Unleashing the potential of e-commerce
Date: 2015-12-09
Institutions: Directorate-General for Justice and Consumers, European Commission
Subjects: Internet, consumer information, contract, digital technology, electronic commerce, impact of information technology, information society, single market

EN 

   EN 

   EUROPEAN COMMISSION  Brussels, 9.12.2015  COM(2015) 633 final   COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL AND THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE Digital contracts for Europe - Unleashing the potential of e-commerce      
 
 
1. CONTEXT 

The European e-commerce market has grown rapidly in recent years within the overall retail 
sector. It is a main driver for overall EU growth. However, it still has a significant untapped 
potential. Instead of taking full advantage of the opportunities of e-commerce, businesses and 
consumers are too often constrained to their own domestic markets.  

Key figures 

E-commerce as a main driver for growth: The value of retail e-commerce in the EU grew by 
13.4% in 2014 compared with 2013 and reached a total of €370 billion.1 Enterprises' turnover 
from  retail  e-commerce  as  a  share  of  total  retail  turnover  has  risen  by  85%  from  2009  to 
20142, showing that retail trade is growing much faster online than offline. 

Growth  potential  of  e-commerce  still  untapped:  The  share  of  e-commerce  in  the  total  retail 
sector  remains  significantly  lower  in  Europe  than  in  the  USA:  In  2014,  the  share  of  e-
commerce  in  total  retail  was  7.2%  in  the  EU  compared  to  11.6%  in  the  USA.3  In  the  same 
year,  only  12%  of  EU  retailers  sold  online  to  consumers  in  other  EU  countries,  while  three 
times  as  many  (37%)4  did  so  domestically.  Only  15%  of  consumers  purchased  online  from 
another EU country, while roughly three times as many (44%) did so domestically.5  

Against  this  background,  the  European  Commission  adopted  the  Digital  Single  Market 
Strategy6 setting the creation of a Digital Single Market as one of its key priorities to generate 
additional growth in Europe. The Digital Single Market Strategy tackles all major obstacles to 
the development of cross-border e-commerce in the EU. Dealing with those obstacles together 
and improving the situation for businesses and consumers will bring the expected boost to the 
Digital Single Market and the overall EU economy.  

The gap between demand and supply can be narrowed. EU businesses will be able to increase 
their  competitiveness  by  selling  more  easily  to  more  than  just  their  national  or  a  couple  of 
neighbouring  national  markets.  Increased  supply  will  also  strengthen  competition.  This  will 
bring  consumers  a  wider  choice  of  products  at  more  competitive  prices.  Giving  consumers 
uniform rights with a high level of consumer protection will increase their confidence to buy 
abroad. 

1 

European B2C E-commerce Report 2015. Ecommerce Europe. Excluding Bulgaria, Cyprus, Croatia, Lithuania, Luxembourg, Malta, Slovenia and Slovakia for which 

data  are  not  available.  http://www.ecommerce-europe.eu/  p.29    -  All  figures  contained  in  this  Communication  are  also  available  in  the  Commission  Staff  Working 

Document containing the Impact Assessment accompanying the Proposals for a Directive of the European Parliament and of the Council on certain aspects concerning 

contracts for the supply of digital content and a Directive of the European Parliament and of the Council on certain aspects concerning contracts for the online and other 

distance sales of goods, SWD (2015) 275. 

2   Eurostat, E-commerce by enterprises: summary of EU aggregates (NACE Rev. 2 activity) 

3 

4  

5 

6 

http://www.retailresearch.org/onlineretailing.php 

Flash Eurobarometer 396 (2014) “Retailers’ attitudes towards cross-border trade and consumer protection” (2015), p.27 

Eurostat survey on ICT usage in households and by individuals (2014), isoc_ec_ibuy 

Commission Communication 'A Digital Single Market Strategy for Europe'  COM (2015) 192 final, available at: http://ec.europa.eu/priorities/digital-single-market/ 

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2. A FIRST AND IMPORTANT STEP TOWARDS UNLEASHING THE POTENTIAL OF E-COMMERCE 

One  of  the  three  main  objectives  of  the  Digital  Single  Market  Strategy  is  to  ensure  "better 
access  for  consumers  and  businesses  to  online  goods  and  services  across  Europe".  The 
Strategy identified differences in contract law between Member States among the barriers to 
cross-border e-commerce.  

To deliver the right conditions to enable cross-border e-commerce to flourish, consequently, 
the  Digital  Single  Market  Strategy  announced  legislative  proposals  for  simple  and  effective 
cross-border  contract  rules  for  consumers  and  businesses  by  harmonising  contract  rules  for 
the supply of digital content and the online sales of goods.  

As announced by the Commission in its 2015 Work Programme, the Commission is adopting 
today (i) a proposal for a Directive on certain aspects concerning contracts for the supply of 
digital content, and (ii) a proposal for a Directive on certain aspects concerning contracts for 
the online7 and other distance sales of goods.8Together with the Proposal for a Regulation on 
cross-border portability of online content services, these proposals are the first new legislative 
initiatives adopted under the Digital Single Market Strategy.  

Concretely,  the  two  Directives  will  fully  harmonise  in  a  targeted  way  the  key  mandatory 
rights  and  obligations  of  the  parties  to  a  contract  for  the  supply  of  digital  content  and  the 
online sales of goods.9 They will contribute to faster growth of the Digital Single Market by:  

  Reducing  costs  resulting  from  differences  in  contract  law:  The  key  consumer 
contract law rules which currently differ amongst Member States create obstacles for 
cross-border trade of digital content and goods. The current proposals will make sure 
that  these  rules  will  be  the  same  in  all  Member  States.  EU-wide  rules  will  prevent 
emerging legal fragmentation in the area of digital content10 and remove it as regards 
goods11.  Furthermore,  businesses  will  no  longer  have  to  adapt  their  contracts  to 
different rules when selling cross-border and thereby avoid additional costs.  

  Creating  legal  certainty  for  businesses:  Unlike  today  where  they  face  a  complex 
legal framework, businesses will be able to supply digital content or sell goods online 

7      For the purpose of this Communication, any reference to ''online sales'' shall be understood as "online and other distance sales". Conversely, any reference to "offline 

sales" shall be understood as "face-to-face sales".

8       The key aspects of both the supply of digital content and online sales of goods are based on the Consumer Sales of Goods Directive and are therefore as coherent as 

possible.  However,  the  Commission  decided  to  adopt  two  legislative  instruments,  given  that  the  specificity  of  digital  content  requires  several  rules  to  be  regulated 

differently  than  the  ones  for  goods.  Moreover  the  fast  technological  and  commercial  development  of  digital  content  will  require  a  review  of  the  application  of  this 

Directive.  Therefore,  the  implementation  and  application  of  the  digital  content  provisions  and  their  review  will  be  facilitated  by  their  incorporation  in  a  single  legal 

instrument, namely the Directive on the supply of digital content.  

9    For example, conformity with the contract, hierarchy of remedies and their exercise, consumer's right to terminate the contract. 

10      Individual  Member  States  have  recently  enacted  (UK,  NL)  or  started  to  work  (IE)  on  specific  mandatory  rules  on  contracts  for  the  supply  of  digital  content.  These 

emerging national legislations differ both in terms of scope and substance.  

11    There are only minimum harmonisation rules on the notion of conformity with the contract and on remedies for non-conforming goods (under the Consumer Sales and 

Guarantees  Directive).  Since  these  are  minimum  standards,  Member  States  have  the  possibility  to  go  further  and  add  requirements  in  favour  of  consumers.  Many 

Member States have used this possibility on different points and to a different extent.  

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to consumers throughout the EU based on the same set of consumer contract law rules 
provided  by  the  proposed  Directives.  This  will  increase  legal  certainty  and  create  a 
business friendly legal environment, which will be especially beneficial for SMEs. 

  Helping  consumers  to  gain  from  online  cross-border  shopping  in  the  EU: 
Uncertainty about their key contractual rights is a major reason for consumers' lack of 
confidence to shop online cross-border. Consumers will have a fully harmonised clear 
set  of  rights  throughout  the  EU  and  will  therefore  be  more  confident  in  accessing 
digital content or buying goods cross-border. The overall level of consumer protection 
in  the  EU  will  also  rise  significantly.  For  the  online  sale  of  goods,  this  applies  in 
particular,  in  cases  of  defects,  to  the  extension  of  the  period  for  the  reversal  of  the 
burden  of  proof  to  two  years,  aligning  it  with  the  two  year  legal  guarantee  period. 
Except in two Member States where the level will remain the same, this will increase 
consumer  protection  for all  European  consumers.  It  will  empower  consumers  to  buy 
online cross-border and also make it easier for them to exercise their rights.12 

  Reducing  the  detriment  suffered  by  consumers  with  respect  to  defective  digital 
content: Unlike today, where there are no EU-wide specific contractual rules on the 
supply  of  digital  content,  consumers  will  have  clear  and  digital-specific  rights  when 
facing problems with digital content. This will enable them to seek remedies and thus 
reduce  the  detriment  they  currently  suffer  when  they  acquire  faulty  digital  content. 
Given the pace of this technologically and commercially fast moving market, the EU 
rules  are  technologically  neutral  and  future-proof;  they  will  therefore  create  a  level 
playing field for all relevant types of digital content. 

  Overall, balancing the interests between consumers and businesses: By picking up 
market  trends  and  balancing  well  the  different  interests,  the  two  Directives  will 
provide  a  good  deal  for  both  consumers  and  businesses,  creating  the  conditions  for 
overall economic gains. 

Improving everyday life… 

The Directives will concretely improve the everyday life of both businesses and consumers in 
Europe. Today, businesses have to spend time and money to find out about foreign consumer 
contract laws when selling cross-border and to adapt contracts accordingly. For example, the 
time during which a trader can be liable for defects of a PC varies today from two years to the 
entire  lifespan  of  the  PC,  depending  on  the  Member  State.  Tomorrow,  the  national  laws  on 
such contractual remedies will all be the same within the EU: time and money saved can be 
used to develop new products or to sell at a more competitive price.  

12   This  extended  reversal  of  the  burden  of  proof  could  also  contribute  to  higher  quality  and  more  durable  products,  in  line  with  the  European  Commission's  Circular 

Economy Package adopted on the 2nd of December 2015. 

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Consumers  will  be  able  to  shop  online  and  access  digital  content  in  other  EU  countries  as 
easily and confidently as they do in their own country. Consumers proactively buying goods 
from a trader in another Member State will tomorrow be protected to the same extent as under 
their national law. Moreover, today a consumer who cannot watch online the movie paid for 
because  of  poor  video  quality  often  may  only  receive  as  compensation  a  mere  discount  to 
watch future movies, with possibly the same poor quality. Tomorrow, the consumer will have 
the rights to have the problem fixed, to have the price reduced or to terminate the contract and 
be fully reimbursed.  

… and bringing macro-economic benefits 

If the barriers related to contract law were lifted, around 122,000 more businesses would sell 
online across borders. Cross-border EU trade could increase by around €1 billion. Increased 
online retail competition will lead to retail prices going down in all Member States, averaging 
-0.25% at EU level, which will directly increase household consumption in the EU by about 
 18  billion. On  top  of  that,  wider  choice  of  products  and  services  will  translate  into  higher 
consumer  welfare.  Between  7.8  and  13  million  additional  consumers  would  start  buying 
online  cross-border.  The  average  amount  spent  annually  by  each  cross-border  buyer  would 
also increase by €40. Overall real EU GDP is expected to gain about €4 billion per year.13 

These proposals address only contract law terms in a business to consumer interaction. It is 
recognised  that  SMEs,  as  weaker  parties  with  less  bargaining  power,  also  face  contract  law 
related  difficulties  especially  when  using  digital  content.  However,  taking  into  account  in 
particular  the  positions  expressed  by  stakeholders  and  Member  States,  the  Commission  has 
decided  to  look  into  this  issue  in  the  context  of  other  initiatives  announced  in  the  Digital 
Single Market Strategy. 

In order to reap the full benefits offered by the Digital Single Market, this package with both 
proposals is needed to unleash the full potential of e-commerce. The Commission needs to act 
simultaneously on both goods and digital content. These Directives will be complemented by 
the  other  measures  foreseen  in  the  Digital  Single  Market  Strategy  such  as  those  related  to 
VAT-related  burdens,  developing  high-quality  cross-border  parcel  delivery  services  or  a 
modern  copyright  framework.  Further  consumer  related  initiatives  such  as  the  ones 
announced in the Digital Single Market Strategy on abolishing geo-blocking and the review of 
the Consumer Protection Co-operation Regulation14, as well as the entry into operation of the 
Online  Dispute  Resolution  platform15,  will  further  enhance  cross-border  commerce  and 

13    "The  macro-economic  impact  of  e-commerce  in  the  EU  Digital  Single  Market”,  Cardona  M.,  N.  Duch-Brown,  J.  Francois,  B.  Martens,  F.  Yang  (2015),    Digital 

Economy Working Paper, IPTS-JRC 

14   Regulation (EC) No 2006/2004 of 27 October 2004 on cooperation between national authorities responsible for the enforcement of consumer protection laws. 

15   Regulation  (EU)  No  524/2013  of  21  May  2013  on  online  dispute  resolution  for  consumer  disputes  and  amending  Regulation  (EC)  No  2006/2004  and  Directive 

2009/22/EC. 

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remedy other important problems for business and consumers, such as the need for effective 
cross-border redress and enforcement.   

3. LEARNING FROM PAST EXPERIENCE - A FOCUSED, TARGETED APPROACH 

Learning from past experience and having listened to stakeholders, the Commission proposals 
offer an ambitious but realistic way forward to remove contract law related barriers and thus 
help to unleash the e-commerce potential in the EU.  

These proposals entail the most appropriate level of intervention. 

Firstly,  the  proposals  address  real-life  problems  as  identified  by  stakeholders  and  Member 
States. The Commission has sought the collection of a wide and balanced range of views on 
this issue. By conducting extensive consultations, both public and targeted, the Commission 
ensured a wide participation throughout the preparation process of the proposals and therefore 
offered  numerous  opportunities  to  all  relevant  parties  (businesses,  consumers,  national 
authorities, lawyers and academics) to express their opinions.  

Secondly, the proposals specifically take into account the lessons learnt from previous efforts 
to  approximate  contract  laws.  As  a  result,  the  Commission  focusses  on  a  targeted  full 
harmonisation of mandatory consumer rights which remedy concrete key obstacles to cross-
border trade and address the urgency of acting on the online sphere as also recognised by the 
European Parliament.16 Moreover, Directives, instead of Regulations, are more appropriate as 
they leave Member States the freedom to adapt the implementation to their national law. This 
problem-focused, targeted approach was an important result of the stakeholder consultations.  

Finally, on substance, the proposals offer a new dynamic as they strike an appropriate balance 
between  a  high  level  of  consumer  protection  at  EU  level  and  significantly  increased 
opportunities  for  businesses  through  full  harmonisation.  The  approach  chosen  maintains 
substantive  solutions  that  have  proven  their  value  in  practice  (e.g.  duration  of  the  legal 
guarantee  period,  hierarchy  of  remedies)  while  at  the  same  time  putting  forward,  where 
necessary,  new  solutions  supported  by  recent  data  and  trends  in  the  Member  States  (e.g. 
extension of the duration of the reversal of the burden of proof).17 The proposals will bring an 
increased level and effectiveness of consumer protection18 as well as legal certainty and less 

16    In its legislative resolution of 26 February  2014 on the proposal for a regulation of the European Parliament and of the Council on a Common European Sales Law 

(COM(2011)0635– C7-0329/2011 – 2011/0284(COD)) the European Parliament decided to restrict the scope of CESL to online and other distance sales as well as to 

extend the rules on digital content which is provided against another counter-performance than money. 

17   "Consumer market study on the functioning  of Legal and Commercial Guarantees for consumers in the EU" (2015): Indeed, within  the entire 2-year legal guarantee 

period only a minority of businesses insist on consumers proving the trader's liability, and there is very limited change in traders’ behaviour before or after 6 months on 

this point. Two EU Member States (FR, PT) have already adopted national legislation providing for a 2 year period for the reversal of the burden of proof.

18   For example, for digital content, the legal guarantee period will be unlimited and consumers will not have to prove the source of a defect for an unlimited period of time. 

Consumers  will  be  able  to  terminate  long  term  contracts  and  contracts  for  which  the  supplier  makes  major  modifications.  When  purchasing  goods  online,  all  EU 

consumers  will  be  able  to  request  a  remedy  for  a  defective  product  without  having  to  prove  that  the  defect  existed  at  the  time  of  delivery  during  two  years.  EU 

consumers will not lose their rights if they do not notify the seller of the defect within a certain period of time.  

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cost  for  businesses.19  Overall,  this  will  translate  into  increasing  consumer  confidence  and 
spurring business activity across the EU.  

4. ACTING BEFORE IT IS TOO LATE 

We need to act now on the digital dimension…  

The pace of commercial and technological change due to digitalisation is very fast, not only in 
the  EU,  but  worldwide.  The  EU  needs  to  act  now  to  ensure  that  business  standards  and 
consumer  rights  will  be  set  according  to  common  EU  rules  respecting  a  high-level  of 
consumer  protection  and  providing  for  a  modern  business  friendly  environment.  It  is  of   
utmost necessity to create the framework allowing the benefits of digitalisation to materialise, 
so that  EU businesses  can become  more competitive  and consumers can  have  trust in  high-
level EU consumer protection standards. By acting now, the EU will set the policy trend and 
the standards according to which this important part of digitalisation will happen.  

For  businesses,  simplification  of  the  legal  framework  is  a  key  prerequisite  for  their 
competitiveness  and  active  participation  in  digital  markets  throughout  the  Union.  For 
consumers, trust and protection is particularly important in the online environment in order to 
mitigate the distance-related risks (no in-person contact with the seller, no "touch and feel" of 
the product) inherent in these transactions. Without immediate action, changes may come too 
late  and  opportunities  could  be  lost.  To  quickly  strengthen  the  competitiveness  of  EU 
businesses  and  boost  EU  growth,  the  Commission  is  dealing  as  a  priority  with  the  digital 
dimension  of  retail,  namely  the  supply  of  digital  content  and  the  online  purchase  of  goods. 
Both  aspects  of  the  digital  dimension  are  fundamental.  The  barriers  to  the  supply  of  digital 
content clearly need to be addressed because the supply of digital content has a particularly 
strong  growth  potential.20  Any  delay  regarding  digital  content  entails  the  risk  of  emerging 
legal fragmentation, causing obstacles to both consumers and suppliers participating in cross-
border  transactions.  As  to  goods,  they  still  represent  by  far  the  biggest  share  of  the  online 
market:  of  the  €231  billion  estimated  total  size  of  the  Digital  Single  Market,  some  €212 
billion  stem  from  retail  in  goods. The  full  Digital  Single  Market  potential  would  not  be 
unleashed if only one of the two aspects was addressed. 

An  important  trend  of  the  different  stakeholder  consultations  was  that  any  rules  on  digital 
content should be as far as possible based on the rules on the sales of goods, deviations being 
justified only to take account of the specific features of digital content. This shows also the 
importance of discussing both sets of rules as far as possible concomitantly during the inter-
institutional process. 

19     Costs incurred by businesses to adapt their contract to the law of another Member State are estimated at around €9000. See for more details Annex 5 to Commission 

Staff Working Document containing the Impact Assessment accompanying the Proposals, SWD (2015) 275. 

20   Alongside increased internet penetration and usage (80% or 317 million Europeans used the internet in 2014), a growing number of smartphones, e-readers and tablets 

are  fuelling  demand  for  digital  content.  Taking  into  account  that,  according  to  Flash  Eurobarometer  411  "Cross-border  access  to  digital  content"  (2015)",  the  vast 

majority of EU internet users aged 15-24 currently access some type of digital content online (87 % access music online, 80% watch audio-visual content online and 

58% download or play games online), this increase can be reasonably expected to become apparent in the near future. 

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These are all key reasons why the proposals on digital content and the online sales of goods 
are being put forward together and now.  

… and will ensure consistency between online and offline rules  

Given  the  increasing  importance  of  the  omni-channel  distribution  model  (i.e.  selling  at  the 
same time online and offline), the Commission will take all necessary steps to align the rules 
for online and offline sales of goods. It will ensure that consumers and businesses will be able 
to rely on a coherent legal framework which is simple to apply everywhere in Europe.  

As  part  of  its  'Regulatory  Fitness  and  Performance  Programme'  (REFIT),  the  Commission 
will examine the existing EU consumer legislation. This fitness check will be much broader 
than  the  current  proposals  and  cover  a  number  of  consumer  Directives21  including  the 
Consumer Sales and Guarantees Directive (the rules of which will, in respect of online sales, 
be replaced by the proposal on goods). 

The wide-ranging consultation undertaken for the proposed pieces of legislation has identified 
many issues that are relevant for both online and off-line sales of goods. In this way, a large 
part of the analysis work concerning the issues to be carried out under the REFIT exercise for 
the Consumer Sales and Guarantees Directive has already been undertaken when developing 
the proposed rules for online sales of goods.  

This analysis will be complemented by data from the fitness check analysis on the application 
of  the  Consumer  Sales  and  Guarantees  Directive  to  sales  of  goods,  which  are  expected  in 
2016.  This  data  and  therefore  the  outcome  of  the  REFIT  exercise  on  this  point  are  not  yet 
available.  If  the  outcome  of  the  REFIT  exercise  will  confirm  the  preliminary  results  of  the  
ongoing analysis - which seems to be pointing towards the need for a Commission initiative 
on  offline  sales  of  goods  –  these  conclusions  could  feed  into  the  progress  made  by  the  co-
legislators  on  the  proposal  for  online  sales  of  goods,  for  instance  by  expanding  its  scope. 
Though action to tackle the key obstacles that hamper online cross-border commerce is urgent 
and  unavoidable,  it  is  the  Commission's  objective  to  ensure  a  legal  framework  of  coherent 
rules applied throughout the EU for both online and offline sales. 

5. TURNING INTENTION INTO REALITY   

The  digital  contract  proposals  are  "ambitious  political  steps  towards  a  connected  Digital 
Single  Market  notably  …  by  modernising  and  simplifying  consumer  rules  for  online  and 
digital purchases”, as announced by the guidelines of President Juncker.22 They are among the 

21   Directive 93/13/EEC on unfair terms in consumer contracts; Directive 1999/44/EC on certain aspects of the sale of consumer goods and associated guarantees; Directive 

2005/29/EC  concerning  unfair  business-to-consumer  commercial  practices  in  the  internal  market;  Directive  98/6/EC  on  consumer  protection  in  the  indication  of  the 

prices  of  products  offered  to  consumers;  Directive  2006/114/EC  concerning  misleading  and  comparative  advertising;  Directive  2009/22/EC  on  injunctions  for  the 

protection of consumers' interests. 

22   http://ec.europa.eu/priorities/docs/pg_en.pdf  

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first  deliverables  of  the  Digital  Single  Market  Strategy,  transforming  these  guidelines  into 
concrete  policy.  They  are  the  first  steps  towards  creating  economic  growth  through  a 
business-friendly  environment  and  strong  consumer  confidence  in  a  genuine  Digital  Single 
Market.  It  is  now  up  to  the  co-legislators  to  turn  this  intention  into  a  reality  for  European 
consumers and businesses. The Commission will continue to work closely with the European 
Parliament and the Council to make this happen.  

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