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# 52012SC0146

**COMMISSION STAFF WORKING DOCUMENT With a view to establishing guidance on the application of Article 20(2) of Directive 2006/123/EC on services in the internal market ('the Services Directive') Accompanying the document Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions on the implementation of the Services Directive: A partnership for new growth in services 2012-2015 /\* SWD/2012/0146 final \*/**

  

COMMISSION STAFF WORKING DOCUMENT

With a view to establishing guidance on
the application of Article 20(2) of Directive 2006/123/EC on services in the
internal market ('the Services Directive')

Accompanying the document

Communication from the Commission
to the European Parliament, the Council, the European Economic and Social
Committee and the Committee of the Regions

on the implementation of the
Services Directive: A partnership for new growth in services 2012-2015

This document
is a European Commission staff working document for information purposes. It
does not represent an official position of the Commission on this issue, nor
does it anticipate such a position.

Table of Contents

1...... Delivering an internal market for
service recipients. 2

1.1.      Can ‘service recipients’
benefit sufficiently from the single market?. 2

1.2. Further facilitating access to the internal market
for services. 3

2...... National
implementation of the non-discrimination obligation.. 4

3...... Purpose
of the document.. 4

4...... Explaining
Article 20(2) of the Services Directive. 5

4.1.      The scope of application of
the provision. 5

4.1.1.       To which services does the
obligation apply?. 5

4.1.2.       To whom does the
obligation apply?. 5

4.1.3.       Consumers as service
recipients. 5

4.1.4.       What are ‘general
conditions made available to the public at large’?. 5

4.1.5.       Nationality and residence
as differentiating factors. 5

4.1.6.       What are ‘differences in
the conditions of access’?. 5

4.2.      The need to undertake a
case-by-case analysis. 5

4.2.1.       Identifying discrimination. 5

5...... Some
examples: An in-depth look at cases of different treatment.. 5

6...... Further
room for improvement: Removing remaining obstacles to the internal market   5

6.1.      Payments. 5

6.2.      Taxation. 5

6.3.      Divergences in consumer
protection and contract law rules. 5

6.4.      Debt recovery. 5

6.5.      Private copying levies. 5

7...... Conclusions. 5

7.1.      Enforcement of Article
20(2) by Member State authorities. 5

7.2.      The Commission’s role:
Information and support to Member States, businesses and consumers. 5

7.3.      Making the single market
more tangible: steps businesses could undertake in applying the rights granted
by Article 20(2) 5

1.
Delivering an internal
market for service recipients

The Single Market has delivered enormous
advantages to European businesses. The implementation of the Services Directive
has been a milestone in the removal of barriers to doing business, both at home
and across the EU. However, facilitating the provision of services across
national borders is not enough for the establishment of a genuine single
market. It is equally important to ensure that recipients of services can
easily enjoy the opportunities that the single market offers to them as
indicated in the Communication from the Commission to the European Parliament
and to the Council on the implementation of the Services Directive in
accordance with Article 41 of the Services Directive — A Partnership for New
Growth in Services 2012-2015 (hereafter ‘Communication’).

Service recipients, in particular
consumers, expect that the elimination of regulatory barriers to the provision
of services in the internal market will make more services available to them. However,
situations occur whereby recipients experience a refusal to supply or a higher
price on grounds of their residence in another Member State. This document looks
into the situation of the internal market for services for recipients and gives
possible indications to further facilitate the availability of services to
European citizens.

1.1.
Can ‘service recipients’
benefit sufficiently from the single market?

Too often, consumers are disappointed when
they try to buy a service cross-border. Complaints received by the European
Commission, by the European Consumer Centres and by other assistance bodies
indicate that practices of different treatment on grounds of nationality or
residence are a cause for concern in the internal market.

In order to assess the situation on the
ground, two studies on geographical discrimination against consumers, with a
particular emphasis on e-commerce, were commissioned and published in 2009: the
‘Mystery shopping evaluation of cross-border e-commerce in the EU’[1] conducted for the Commission by
YouGov Psychonomics and the ‘Matrix Insight: Access to services in the Internal
Market: Study on business practices applying different condition of access
based on the nationality or the place of residence of service recipients — Implementation
of Directive 2006/123/EC on Services in the Internal Market (hereafter referred
to as ‘Matrix study’).[2]

Reported practices relate to a wide range
of services such as the sale of electronic goods, textiles, sports equipment,
Do-It-Yourself (‘DIY’) goods, music downloads, car rental and mobile phone
contracts. Most cases of different treatment appear to be related to residence
rather than to nationality as such, and they occur mostly in online
transactions. For instance, consumers wishing to book a hire car online or book
a hotel for a holiday in another Member State may find themselves redirected to
the hire car firm or hotel chain’s website in his country of residence where
considerably higher prices are offered. Transactions may also fail at the stage
of inputting credit card details due to the address of the buyer.

Although not as common, different treatment
also occurs in offline transactions, particularly in the tourism sector. For
instance, the Commission is aware of different tariffs being applied by certain
theme parks and tourist attractions depending on the country of residence of
the customer. The Commission is also aware of examples of would-be-holidaymakers
living in border regions wishing to book cruises through travel agents just across
the border, and where the travel agent is unable to sell the cruise as the
cruise provider forbids him from selling to residents of other Member States in
order to maintain their differentiated pricing policies.

1.2. Further facilitating access to the internal
market for services

To enhance the rights of recipients and
strengthen their confidence in the internal market, Directive 2006/123/EC on
services in the internal market (‘the Services Directive’) obliged Member
States to remove obstacles for service recipients wanting to buy services
supplied by providers established in other Member States, such as obligations
to obtain a specific authorisation to receive services from another Member
State. It also obliged Member States to make available to service recipients
general information and assistance on the legal requirements, in particular
consumer protection rules, and redress procedures applicable in other Member
States. Finally, it laid down an obligation on Member States to ensure that
discriminatory requirements based on service recipients’ nationality or place
of residence were put at end.

In relation to this last point, Article
20 of the Services Directive prohibits discrimination against service
recipients on the basis of their nationality or country of residence. The
purpose of this provision is to help service recipients, especially consumers,
access offers available on the markets of other Member States and make the most
of the internal market.

Article 20(1) of the Services Directive
obliges Member States to ensure that the recipient is not made subject to
discriminatory requirements based on his nationality or place of residence. Article
20(1) of the Services Directive includes therefore instances where the
different treatment is applied by public authorities. According to
information available to the Commission, a significant number of the cases
which are perceived as blunt discrimination involve preferential access to
services granted to residents in a given region or municipality by the respective
regional or local authorities or by operators acting under the auspices of
those authorities. The Court of Justice of the European Union has already condemned,
under certain conditions, advantageous rates for admission to services granted
by local or decentralised State authorities only in favour of nationals and
persons resident within the territory of those authorities, and which exclude
from such advantages recipients who are nationals of other Member States and non-residents, as being discriminatory.[3]

Article 20(2) covers, more specifically, instances
where the different treatment is applied by service providers, that is,
firms or professionals offering services in a market. It obliges Member States to
ensure that the general conditions of access to a service, which are made
available to the public at large by the provider, do not contain discriminatory
provisions relating to the nationality or place of residence of the recipient,
but without precluding the possibility of providing for differences in the
conditions of access where those differences are directly justified by
objective criteria.

2.
National implementation
of the non-discrimination obligation

Member States were obliged to implement
Article 20 into their national laws. Article 20(2) of the Services Directive is
implemented through national provisions that make the prohibition of
discrimination on grounds of nationality or residence binding on service
providers.

Most Member States have introduced in the
horizontal laws transposing the Services Directive provisions reproducing in
full or in part the Services Directive’s provision on non-discrimination.
Others have been able to rely on pre-existing legislation that achieves the
same end (see Annex I).

It is for the relevant national competent
authorities to ensure compliance with the relevant national provisions
implementing Article 20(2) of the Services Directive into their national law.
In order to perform this assessment, a case-by-case analysis is required
in all instances.

Member States designate the authorities
responsible for this enforcement in their territories. A list of competent
authorities responsible for this supervision can be found in Annex II of
this document. Most Member States have attributed the task of administrative
enforcement of the national provisions implementing Article 20(2) to the
authorities that are in charge of the administrative enforcement of consumer
protection rules. In some instances, competition authorities have also been
entrusted with the enforcement of this provision. In the event of judicial
dispute, it will generally be for the courts in charge of commercial or
consumer protection rules to adjudicate on these issues.

Enforcement of the provision shall be
carried out in conformity with the powers of supervision provided for in
national law, in particular through supervisory measures at the place of
establishment of the provider. When it comes to administrative enforcement, the
Member State of establishment is responsible for service providers
established in its territory, also when they provide services in other Member
States. In cases in which a provider is acting cross-border, Chapter VI of the
Services Directive has laid down administrative cooperation requirements which
oblige Member States to provide each other with mutual assistance in the
supervision of providers.

3.
Purpose of the document

National authorities assisting consumers
and service recipients have received numerous complaints involving different
treatment by businesses on grounds of nationality and residence since the
adoption of the Services Directive. However, according to the information
received by the Commission, it would appear that, to date, only a very limited
number of the cases brought to the attention of these bodies have resulted in administrative
or judicial enforcement action at national level. There seem to be a number of
possible reasons for this lack of administrative and judicial enforcement:
these provisions have not been in force for long in most Member States and the low value of the goods and services normally involved in this type of dispute
may explain service recipients’ lack of willingness to pursue action.

As reflected in Recital 95 of the Services
Directive, different tariffs and conditions may apply to the provision of a service,
where those tariffs, prices and conditions are justified for objective reasons
that can vary from country to country. Examples of possible objective reasons
are given in the recital (such as market conditions, regulatory barriers or
risks related to compliance with legislation applicable in other Member
States). In light of this situation, it would appear that the taking of full
effects of Article 20(2) could be facilitated by further clarity on the
interpretation to be given to the obligation it entails.

The importance of correct application of
the national provisions implementing Article 20(2) of the Services Directive by
national authorities has been stressed by European institutions. In particular,
the European Parliament has made a call for an effective implementation of
Article 20(2) of the Services Directive, as well as the proper enforcement by
national authorities and courts of the national provisions implementing this
non-discrimination rule in the legal systems of Member States.[4] In light of this, clarification
by the Commission services appears useful to ensure consistency in the
application of the non-discrimination clause of the Services Directive across
Member States. This is all the more important in consideration of the specific ‘cross-border’
element of this provision which deals specifically with situations of business
and consumers located in different countries.

In light of this, this paper seeks to throw
light on the typical situations in which service recipients are confronted with
different treatment or refusal to provide a service and on the circumstances
invoked by businesses so that competent authorities at national level are in a
better position to undertake the case-by-case analysis that is required of
them. With the same aim, it also attempts to describe and explain when
differences in treatment or refusals to provide a service may or may not be
justified.

This document builds on and complements the
Commission’s assistance to Member States on various aspects of the Services Directive
since its adoption. It is an indicative document of the Commission services,
which cannot be considered in any way binding on the Commission as an
institution, and it is without prejudice to the interpretation of EU law by the
Court of Justice of the European Union.

4.
Explaining Article
20(2) of the Services Directive

The Court of Justice has emphasised the
need to protect service recipients from restrictions laid down by Member States
to the freedom to receive services from a provider established in another Member State as being the necessary corollary of the freedom to provide services.[5] It has also underlined the need
to sanction national measures or agreements between companies which partition
national markets according to national borders and make the interpenetration of
national markets more difficult.[6]
Efforts to remove unjustified regulatory restrictions in the Single Market will
not translate into benefits for service recipients if practices by service
providers themselves serve to create artificial borders within the internal
market.

Practices tackled by the non-discrimination
obligation involve both public authorities and service providers. A significant
number of the cases which are perceived as blunt discrimination involve
preferential access to services granted to residents in a given region or
municipality by public authorities (most commonly, the respective
regional or local authorities) or by operators acting under the auspices of
those authorities, for instance concession holders or recipients of regional or
local funding. Examples of these services are for example access to facilities
such as swimming pools, musea, public gardens or historical monuments. It is
not uncommon for preferential rates to be offered to local residents and not to
other users of the service although they seem to satisfy the same objective
conditions (of age, etc.). For example, when trying to enter the premises of
public thermal baths, citizens from other Member States learn that they are
refused the reduced entrance fee offered to consumers exceeding a certain age
on grounds of their nationality, despite the fact that they can show that they
meet the age criterion.

For these instances, the case-law of the Court
of Justice has already condemned, under certain conditions, advantageous rates
for admission to services granted by authorities excluding recipients who are
nationals of other Member States and non-residents, as being discriminatory.[7] At the same time, it cannot be
ruled out that, exceptionally, in cases involving social benefits granted by a
public authority which result in advantageous conditions of access to a
service, local or regional authorities may be allowed, under certain
conditions, to distinguish between citizens who have a connection with the
society financing the advantage and those who do not.[8]

Article 20(2) however deals specifically with
businesses providing services in the market. While business are free to
determine the scope of the geographic area in which they provide their
services, certain practices may restore the divisions between national markets and
be liable to frustrate the TFEU’s objective of achieving the integration of
those markets through the establishment of a single market. These practices may
be to the detriment of recipients trying to avail of their rights to buy
services within the European Union. To fully realise the potential that the
internal market offers to them, recipients need to be protected from
unjustified restrictions on access to services which are applied to them by service
providers.

In this context, the principle of
non-discrimination laid down in Article 20(2) of the Services Directive
balances the interests of businesses, which are free to decide the way in which
they avail of the opportunities offered to them by the internal market for
services, and the interests of recipients who have the right not to be
discriminated against due to their nationality and residence when seeking to
acquire services in the single market. This complex balance always requires a case-by-case
analysis.

4.1.
The scope of
application of the provision

Further light on the scope of the
non-discrimination obligation laid down in Article 20(2) of the Services
Directive can be derived from the wording of this provision and from its
rationale. Explanations below aim at providing further clarity on the scope of
the obligation in light of existing EU law and case-law. Further information
can be found in the Handbook on the implementation of the Services Directive.[9]

4.1.1.
To which services does
the obligation apply?

The concept of service encompasses any
self-employed economic activity which is normally provided for remuneration.[10] Without being exhaustive, the
following can be mentioned as examples of services covered by the Directive:
distribution of goods and services (retail), services in the field of tourism
such as travel agencies, leisure services such as services provided by sports
centres and amusement parks, rental and leasing services (including car rental)
the activities of most of the regulated professions, craftsmen, the
organisation of events, advertising and recruitment services.

For instance, access to services that are
popular with mobile EU citizens such as entrance to tourist attractions, car
rental or travel agencies should be facilitated by the correct application of Article
20(2) of the Services Directive. The same applies to numerous business and
leisure services such as mobile phone subscriptions or the online or offline
retail sale of products and services including electronic goods, books, DIY
products, and music downloads.

Services explicitly excluded from the
Services Directive are for example non-economic services of general interest,
audio-visual and radio broadcasting services, gambling activities, private
security services, financial services and healthcare and pharmaceutical
services provided by health professionals to patients to assess, maintain or
restore their state of healthwhere
those activities are reserved to a regulated health profession in the Member
State in which the services are provided.[11]

4.1.2.
To whom does the
obligation apply?

Article 20(2) applies to ‘providers’ within
the meaning of Article 4(2) of the Services Directive, namely any natural
person who is a national of a Member State, or any legal person as referred to
in Article 54 TFEU and established in a Member State, who offers or provides a
service.

Where firms provide services in several
Member States of the Union, they will need to understand which of the national
provisions implementing Article 20(2) applies to them. For that purpose, the determination
of the Member State of establishment within the European Union
becomes essential. This determination must be done in accordance with the case
law of the Court of Justice. According to this case law, the concept of
establishment involves the actual pursuit of an economic activity through a
fixed establishment for an indefinite period.

This definition therefore requires the
actual pursuit of an economic activity at the place of establishment of the
provider. An establishment does not always need to take the form of a
subsidiary, branch or agency, but may consist of an office managed by a
provider’s own staff or by a person who is independent but authorised to act on
a permanent basis for the undertaking, as would be the case with an agency.

E-commerce businesses have the possibility
to offer their services online or sell their goods through online platforms,
thereby becoming ‘accessible’ in all Member States. It seems important to
recall that the fact that a company has registered a website in a given Member
State or is using top level domain names of a specific Member State is not
always tantamount to that company being established in that Member State. The
place of establishment of a company providing services via an Internet website
is not the place in which the technology supporting its website is located or
the place in which its website is accessible but rather the place where it
pursues its economic activity. For instance, a small company selling electronic
appliances could decide to acquire a domain name in a Member State neighbouring
its Member State of establishment in order to be able to better market to
recipients in that territory. However, the service provision would be carried
out entirely through its Member State of establishment.

In cases in which it is difficult to
determine from which of several places of establishment a given service is
provided, the location of the provider’s centre of activities relating to the
particular service for which the different treatment applies should be
assessed. For example, a retailer of clothes and garments could have
establishments in all Member States. In these cases it may well be that each of
these establishments has its country-specific website and each of them determines
the conditions of access to the sale of its products in that site, including
the price. When analysing a case, national authorities will have to identify
the establishment responsible for the practice in question.

4.1.3.
Consumers as service
recipients

The definition of recipient laid down in
Article 4(3) of the Services Directive refers to any natural person who is a
national of a Member State or who benefits from rights conferred upon him by EU
acts, or any legal person as referred to in Article 54 TFEU and established in
a Member State, who, for professional or non-professional purposes, uses, or
wishes to use, a service.

Despite the fact that Article 20(2) of the
Services Directive applies to service recipients in general, the wording of
Recital 95 and the reference to general conditions made available to the public
at large would appear to indicate that the purpose of the provision is to
protect consumers in particular.[12]

4.1.4.
What are ‘general
conditions made available to the public at large’?

Article 20(2) of the Services Directive
only applies to ‘general conditions of access to a service made available to
the public at large’ and not to conditions of access that are negotiated on an
individual basis with one service recipient.

There is no definition at EU level of ‘general
conditions of access made available to the public at large’. As such, general
conditions of access can be understood as all the terms and conditions and all
other information made available by the service provider through various means
such as information published in advertisements, on websites or in (pre-)
contractual documentation and which are understood to apply in the absence of
an agreement to the contrary entered into directly with the service recipient.
General conditions of access to a service could also be practices which apply
generally without being laid down in published information or in documentation
made available by the provider, such as information provided by way of e-mails
or letters addressed to service recipients in response to requests for
information.

Individually negotiated terms that may
govern commercial relations between two or more traders are not part of the ‘general
conditions of access made available to the public at large’. Tailor-made terms
negotiated with a particular service recipient are usually based on the
specific characteristics of the recipient in question including such
characteristics as his history of custom with the service provider, his ability
to pay, or their special requests, and are not covered by Article 20(2) of the
Services Directive. For instance, favourable rebates granted by a wholesale
distributor of goods to one of its customers in view of the quantities
purchased by that individual customer from the trader would not be deemed ‘general
conditions of access made available to the public at large’ and would thus also
not be deemed ‘different treatment’ as covered by Article 20(2) of the Services
Directive.

4.1.5.
Nationality and
residence as differentiating factors

By virtue of the Treaties, discrimination
on grounds of nationality has always been banned throughout the EU.[13] In addition, many Member
States have had long-standing provisions prohibiting discrimination on grounds
of nationality which derive from obligations undertaken at international level
or from the principles founding their constitutional orders. Discrimination
based on residence has often been considered by the Court of Justice, under
certain conditions, as indirect discrimination based on nationality.[14] Article 20(2) of the Services introduces
however an explicit prohibition of discrimination on the grounds of residence
in the territory of another Member State.[15]

Differences in treatment are often not
established directly on the basis of nationality or residence but rather on proxy
factors which may end up being tantamount to nationality or residence, such as
the country of the driving licence, the country of credit card issuance, the
place of delivery, the country of origin of specifically dedicated IP
addresses, the lack of credit history in a particular Member State, the lack of
registration in the population registry, etc.

4.1.6.
What are ‘differences
in the conditions of access’?

Different conditions of access may concern
several aspects of the offer or of the provision of the service. They do not,
by themselves, constitute discrimination. The first possible difference
involves obtaining access to the service itself: refusing to supply a consumer
resident in another Member State would be the clearest case of a difference in
treatment on the grounds of residence. The question of whether it is justified
or not would have to be assessed on a case-by-case basis.

For example, certain service providers,
including providers of electronic downloads, do not deliver their services into
certain territories for various reasons, which may or may not be justified.
Consumers are often confronted with clauses in the terms and conditions
indicating that the service they are intending to acquire is available only in
a given Member State. Recipients are often asked to agree not to use or attempt
to use the service from outside this location.

A second category of possible different
treatment may involve, for example, setting a different price for the service
or offering different terms and conditions such as making different delivery or
payment options available to consumers resident in other Member States.

4.2.
The need to undertake a
case-by-case analysis
4.2.1.
Identifying
discrimination

As indicated above, a case-by-case analysis
is required in all circumstances to determine whether different treatment is
being applied to recipients and whether or not that treatment is justified for
objective reasons.

According to the case law of the Court of
Justice, the identification of discrimination requires: a difference in
treatment and the presence of comparable situations of recipients to which the
difference is applied. Differences do not amount to discrimination if, and in
so far as, they reflect relevant and objective differences in the situation of
recipients. In this context, a number of preliminary reflections can be made on
the situations of service recipients that can help competent authorities better
assess whether an objective reason can justify different treatment in a particular
case.

4.2.1.1.Different
treatment on the basis of nationality

It would appear extremely difficult to find
objective reasons to justify differences of access to a service in the European
Union on the basis of nationality. For instance, promotional campaigns
where favourable access to services such as mobile subscriptions or supermarket
loyalty schemes are made conditional upon a consumer producing evidence of the
nationality of the Member State where the service is provided would not appear
to be acceptable under Article 20(2) of the Services Directive.

4.2.1.2.Different
treatment on the basis of residence when the recipient moves to acquire the
service

Differences based on the residence of
the recipient merit detailed analysis. These differences do not amount to
discrimination if, and in so far as, they reflect relevant and objective
differences in the situation of the recipients.

In a context in which the recipient
moves to the territory of another Member State (for example, as a tourist or as a student), the
recipient places himself in a situation very similar if not identical to that
of recipients resident in the Member States where the service is provided. To
the extent that the service is to be provided within the territory of the Member State of the provider, objective reasons linked to the regulatory framework or to
market conditions prevailing in the country where the recipient is resident
would not appear to be relevant in justifying different treatment.

For instance, citizens who reside in one Member State but spend a considerable amount of time in the territory of another may want to
benefit from favourable terms for mobile telephone subscription offers provided
by operators established in the other Member State. It appears that sometimes
these favourable terms are conditional upon evidence of residence in the Member State where the mobile phone operator is established. Similarly, students who intend
to move to other Member States would appear to experience difficulties in
hiring the services of real estate agencies to find suitable accommodation in
the Member State where they will be pursuing their studies. It appears that in
certain instances the provision of these services is made conditional on
residence in the territory of the Member State where the service is to be
provided. To the extent that the mobile customers or the students are able to
provide the evidence of the required security for the provision of these
services, they should not suffer discrimination due to their permanent
residence in another Member State. In principle, service providers should not
refuse access to those recipients solely based on the fact that they are not
permanently resident in the national territory. It cannot be excluded though
that different conditions could be applied in certain cases where justified by objective
criteria, such as for example the requirement to provide a proof of security to
ensure payment of services where residence in other Member State would increase risk or cost of recovery of debts.

4.2.1.3.Different
treatment on grounds of residence when the service provider moves to provide
the service

In a context in which the provider needs to
move to the place of residence of the recipient in order to provide the
service, it becomes evident that the situation of the recipient is not
comparable to that of recipients who are resident in the Member State of establishment of the provider. Objective reasons linked to the regulatory framework
applicable to the provision of services in the other Member State or to the market conditions that prevail there (such as costs of the supply of the
service in that territory or higher or lower demand or pricing by competitors
in that market) become relevant. Thus, for example, additional costs due to the
fact that the provider is moving to the territory of the recipient to perform
the services are normally to be borne by the recipient who wishes to receive
the service. These additional costs may be due, amongst others, to the provider
not having storage infrastructure at his disposal under favourable conditions,
to the provider having to comply with procedures linked to the service
provision in another territory (such as the posting of workers or the need to
give a notification) or to loss of revenue incurred in the area where they
normally provide services while attending a request to supply in another
territory.

For example, if called upon to perform a
service in the territory of another Member State, the director of a small
carpentry firm could take into account the fact that the cost of moving his
professionals to another Member State to provide a single service may well
exceed the expected gains from that service provision and perhaps not even
cover the loss of revenue derived from the inability to serve regular customers
in its territory during that period. Although businesses are encouraged to ‘think
European’ and to avail of opportunities that the internal market may offer to
them, the non-discrimination provision does not impose a general obligation on
companies to supply their services in circumstances in which such a supply
would involve them travelling to the territory of Member States that do not
belong to the area in which they have freely decided to target their
activities.

4.2.1.4.Different treatment on grounds of residence in online transactions

In instances in which neither the
provider nor the recipient moves to another territory, the analysis becomes
more complex. This is particularly the case in an online context. Service
recipients do not expect to be confronted with geographic frontiers in the
online world. The internet has made service offerings much more available and
transparent, with online comparison websites, money saving tools and
subscription-based discount sites all making consumers much more aware of the
different offers available. Different treatment becomes much more obvious in
the online world and undermines citizens’ confidence in the internal market.

When trying to buy online, customers sometimes
learn only at the end of the ordering process that the desired product or
service cannot be delivered into their territory. Customers also sometimes note
a sudden increase in the advertised price at the moment at which they indicate
the country of residence or the place of delivery of the service. Unless
delivery restrictions or the higher price can by duly justified by objective
reasons, customers should not be discriminated against in this way due to their
place of residence.

As in the offline world, the
non-discrimination obligation does not prevent service providers from actively
targeting their advertising to certain territories only or from carrying out
campaigns directed at selected recipients. Businesses are free to determine the
geographic scope to which they target their activities within the European
Union, even when selling online. Despite the removal of barriers for the
provision of services that the single market has delivered, in particular with
the implementation of the Services Directive, companies may still, for a number
of reasons decide to target their offer only to their local market or to
neighbouring markets.[16]

Recipients face a variety of situations
when they go online. In certain cases, recipients will not be able to obtain
information on the conditions of access applicable to a service for recipients
resident in other Member States. In other cases, consumers will be able to
access information on the conditions of access applicable to recipients
resident in other Member States but will not be able to acquire those services
under the same conditions because delivery restrictions apply. Finally, in other
cases recipients may also be able — if they actively seek for it — to access
information on conditions applicable to recipients resident in other Member
States and to avail of those conditions.

National authorities should take into
account the way in which differentiation is implemented when carrying out the
assessment of the objectivity of the reasons put forward by service providers
to justify different treatment. Techniques allowing service providers to
identify the location of the recipient and thus to direct the consumer to the
offer adapted to the territory where he is resident are not per se indicators
of discrimination. However, when service providers target their activities to
many Member States and recipients in each of these countries are completely
barred from accessing information on the conditions of access offered to
recipients resident in other Member States, this could be an indication of the
fact that different treatment is being applied. Competent authorities will then
have to assess whether or not such a different treatment is objectively
justified.

Technical
means of different treatment online

Different
treatment becomes visible to the consumer through online transactions. The
internet is a powerful tool that enables businesses to reach a greater number
and variety of customers than by more traditional sales methods. Service
providers however often use a variety of techniques, sometimes in combination
with each other, to better delimit the area to which they target their offers
on the internet. Examples of these techniques are territory-based banners on
third party websites, paying for search engine optimisers in order to be found
by consumers specifically in certain territories or investing in online
advertisements that are displayed to users in a particular territory.

Where
service providers target their offers to several Member States, certain
techniques allow them to adapt their advertising to each of the territories. It
is important to stress that some of these techniques that are used to identify
the place of residence of the service recipient do not always constitute a
discriminatory condition of access to a service.

Examples of these techniques are automatic geolocation
tools, which identify the location of the customer’s computer or device
used to access the service online. A common way to geolocate the recipient is the IP look-up using the
whois database.[17]
The result of this technique can be varied: sometimes recipients are
technically barred from accessing domains addressed to other Member States.
Sometimes recipients are automatically redirected to the domain names of other
Member States but can circumvent the redirection manually.

Geolocation
can also be used in other ways, for instance by automatically selecting the
country of residence from a list in a drop-down menu, based on the IP address.

Another
example is that of country-specific websites that adapt their language
and design to the different target audiences and that may or may not feature
different terms and conditions. When a company has subsidiaries or branches in
different Member States, country-specific websites may be individually managed
by each of those subsidiaries or branches, which will deliver the services for
orders placed in their respective country-specific website.

Accessing
a country-specific website does not automatically imply that users are
considered residents of that country and that it is possible for them to gain
access to the prices and products and services offered on the website.
Recipients may be able to access information but be denied later on, through
the use of self-identification techniques, the possibility to acquire services,
for example when entering credit card details or the delivery address.

Self-identification includes asking customers about their
place of residence through menus on the homepage. Self-identification can also
be carried out through questions asked when registering for an account
(necessary to make most online transactions) or when completing the purchase,
which in most cases involves asking the customer to specify their place of
residence.

5.
Some examples: An
in-depth look at cases of different treatment

The provision of a service under different
conditions is not allowed in the absence of a direct justification by objective
criteria. Recital 95 of the Services Directive lists some examples of objective
criteria that can be invoked by service providers for different treatment. It
refers to additional costs incurred because of the distance involved or the
technical characteristics of the provision of the service, different market
conditions, such as higher or lower demand influenced by seasonality, different
vacation periods in the Member States and pricing by different competitors,
extra risks linked to rules differing from those of the Member State of
establishment and the lack of the required intellectual property rights in a
particular territory. The Matrix study published in November 2009 identified
drivers for differentiation in three categories: legal/regulatory drivers,
including taxation and compliance costs, information costs, and legal
uncertainty; supply-related drivers including cost of sales, and firm-related
characteristics, such as corporate structure; and demand-related drivers
including the nature of competition, the willingness to pay of different
customer groups, and seasonality.[18]

The task of competent authorities will be
to undertake a case-by-case analysis with a view to determining whether any
of the reasons quoted above are relevant for the service provision in question
for which the different treatment is being applied.

The examples below aim to provide some
general indications to competent authorities on how the assessment of whether
or not these objective reasons apply could be undertaken in each individual
case.[19]

Example 1:
Refusal to supply due to a lack of delivery options

Consumers resident
on islands are sometimes refused supply when they seek to purchase goods from a
provider in another Member State, due to difficulties in delivery. In principle,
these consumers should be granted access to the delivery of goods to the extent
that delivery options exist within the European Union. Additional delivery and
freight charges can help businesses recover the additional cost incurred in
these service provisions.

The lack of alternatives for delivery can
rarely be invoked by a service provider to refuse supply to a given Member State. For parcel deliveries up to 20 kg, the Postal Services Directive imposes an
obligation on Member States to ensure the provision of universal postal
services, including cross-border.[20] This obligation means that at least one
delivery option in a cross-border context should be available in all Member
States.[21]

Although delivery services should be
available cross-border, the cost of the delivery service (be it the parcel
delivery service or other alternative methods) chosen to supply services in
another Member State may significantly differ from the cost applicable to
deliveries in the Member State of establishment thus resulting in different
conditions of access being offered to recipients resident in other territories.[22]

The difference in delivery costs or in
estimates of returning items to be borne by consumers may appear initially as
discrimination. However, service providers are obliged to specify additional
freight, delivery or postal charges in their transactions to consumers.[23] This transparency should provide clarity
to service recipients as to the reasons behind the difference in the conditions
of access.

Example 2:
Refusals to supply due to contractual obligations

Residents in one Member State have complained about being refused delivery of baby prams manufactured and sold
through an exclusive distributor in another Member State where prices are much
lower. The reason invoked by the exclusive distributor in that Member state was
that the territory of the customer who wanted to acquire the pram had been
reserved to another exclusive distributor and that they were bound by
contractual agreements to sell prams only to customers resident in that
territory. This clause however is likely to be in breach of competition law and
thus it is unlikely that it can justify such a restriction of supply.

When customers try to buy
services in another Member State, they are sometimes told by distributors that
the service cannot be delivered to them as the distributor is bound by
contractual arrangements preventing him from serving territories reserved by
their suppliers for other distributors.

Service providers cannot be obliged to
breach the contracts they have validly entered. However, these contractual
obligations between independent undertakings can be invoked only to the extent
that they do not breach competition law, and businesses are responsible for
ensuring that their agreements and practices satisfy the requirements laid down
in EU and national competition rules.

For agreements considered in this context,
the competition rules applicable to vertical agreements seem the most relevant.[24] Vertical agreements are agreements for the
sale and purchase of goods or services which are entered into between companies
operating at different levels of the production or distribution chain, such as
distribution agreements between manufacturers and wholesalers or retailers. For
vertical agreements that cannot benefit from a block exemption, the Commission
has provided guidance on how to assess its pro- and anti-competitive effects in
its Vertical Restraints Guidelines, which were revised in 2010.[25]

To start with, for the present purposes,
there is a need to differentiate between active and passive sales. Passive
sales are those that have not been actively sought by the seller. Having a
website and receiving and processing orders by a customer following a visit to
the website, for example, constitutes passive selling. Active sales are sales
that a distributor solicits, through marketing, sales visits etc. Online
advertisement addressed to specific customers is explicitly recognised as a
form of active selling.

Restrictions of passive sales in the
territory of other Member States laid down in distribution agreements are
generally in breach of Article 101 TFEU. It is thus unlikely that service
providers who have entered into exclusive distribution agreements with their
suppliers can validly invoke clauses in their contracts containing restrictions
of passive sales to cross-border service recipients resident in other Member
States whose territory has been reserved for another exclusive distributor.

Example 3: Higher
prices imposed due to market conditions in the country of residence of the
recipient

Car rental
companies renting motor vehicles with subsidiaries in all Member States set up
country-specific websites for the delivery of their services, which do not
allow for the circumvention of automatic geolocation techniques used to display
different prices according to the Member State of residence of the recipient. Price
differences in the various country-specific websites are significant, despite
the fact that the differences are applied to the same service provision taking
place in the same location and by the same provider and that costs of the
supply of the service then would not appear to differ significantly on grounds
of the place of residence of the customer. In this event, cost considerations
alone would not appear to justify the partitioning of the market to the
detriment of consumers.

Market conditions are determined
by a variety of factors which relate to both supply and demand in the market.
On the supply side, businesses need to take into account costs such as the cost
of providing the service (rental of necessary premises when there is a physical
establishment, cost of labour), the cost of delivery, the cost of payment
methods and customer support and advertising costs. Factors affecting demand
include brand penetration, different preferences or requirements with regard to
the level of service to recipients, for certain services such as tourism and
car rental seasonality and different vacation periods and the presence and
strength and marketing policies of competitors in each of the different
territories. These different market conditions shape the geographic scope and
the conditions under which service providers decide to actively offer their
services in the various Member States.

There are differences between
customer groups in terms of how much demand the group has for a service at a
given price and the way in which the group’s demand changes in response to
price changes. The wording of Article 20 of the Services Directive, read in
conjunction with its Recital 95, indicates that a difference in willingness to
pay could be invoked by businesses to justify the existence of different
pricing and marketing policies by a service provider towards the various Member
States.

The use of the internet has
made it much easier for consumers to make comparisons between service
providers, even those located in other Member States. It is therefore to be
expected that consumers will become more active in seeking out such favourable
conditions offered online by service providers established in other Member
States. The facilitation of price comparison means more transparent markets
which increases competition and ultimately leads to price convergence. This is
one of the sought-after benefits of the introduction of the euro. Practices that
deliberately prevent customers from accessing information on the conditions of
access applicable to recipients resident in other Member States should be subject
to particular scrutiny by national authorities. Furthermore, price information
provided on the web-site of the trader should be clear and comprehensible,
informing the consumer prior to any purchase of the total price, including
taxes and also information on freight or delivery charges.[26]

Example 4: Higher
charges for cross-border payments

Drivers
who use motorways in other Member States on a regular basis may wish to avail
of the possibility to purchase toll-payment devices through which the driver
can pay the applicable charges for the use of the road network by means of
direct debit. Where this possibility is offered to subscribers in the Member
State where the motorway is located, residents of other Member States should not
be charged, in principle, a higher price solely on grounds that the account
through which payment shall be made is located in another Member State.

Regulation (EC) No 924/2009 on
cross-border payments in the Community eliminates differences in charges for
cross-border and national payments in euro, up
to a maximum value of EUR 50 000, in all EU Member States. [27] Thus, charges for payment
transactions offered by a payment service provider (e.g. the bank) have to be
the same whether the euro payment is national or cross-border. The Regulation
applies to all electronically processed payments, including credit transfers, direct
debits and payments by means of debit and credit cards.

Example 5: Refusal
to supply because of intellectual property rights concerns

A music download
provider has acquired rights on the music it offers for all Member States,
which it sells through country-specific websites offering slightly different
repertoire in each Member State at different prices. When customers attempt to
have access to certain tracks sold in Member States other than their Member State of residence they are denied access at the beginning of the ordering process.

When the trader
holds the required copyright and related rights necessary to deliver the
service in other territories, the absence of required intellectual property
rights will normally not justify a refusal to supply. The refusal to supply
customers resident in other Member States will thus need to be objectively
justified on other grounds.

Holders of copyright and related rights
have protection by virtue of the existence of their work, so copyright and related rights do not require
registration. The exercise of copyright and related rights is territorial in nature: a right holder exercises his/her rights on
the basis of a bundle of independent, national rights which have been
harmonised in the EU under a series of directives adopted between 1991 and
2011. Notably, and for purposes of the delivery of online services, authors and
other right holders have the exclusive right to authorise or prohibit the
reproduction of their works or other protected subject matter; and to authorise
or prohibit the communication of their works or other protected subject matter,
including via the internet.[28] While copyright and related rights are in principle limited to the territory of
the state granting such rights, copyright holders can also grant multi
territorial or pan European licences. The choice rests with the rights holder.

A service provider may often need to
acquire licences from more than one party.[29] The costs associated with procuring
licences include both the purchase price and a series of transaction costs.
Music licensing is particularly complex, not least because of the split of
rights within any given track. As far as the rights of authors are concerned,
their licensing is largely based on collecting societies (the bodies responsible
for the management of copyright and the collecting of royalties) which
traditionally hold licence rights on a national basis.

Within the boundaries of competition law, a
rightholder may choose whether or not to grant authorisation at all, or for a
particular territory, so the
actual acquisition of licences depends on the successful conclusion of
negotiations. Lack of the required authorisation for a particular territory is
an objective reason that would justify the refusal of a service to consumers in
the territory where the rights have not been cleared.[30]

When a service provider has acquired the
relevant rights for music download services. only in, say, three Member States,
the service provider will not be able to make its services available to residents
in the other Member States. In this situation, the provider could include a
disclaimer at the beginning of the ordering process indicating that the music
service can only be delivered in certain territories. This could help to
alleviate negative consumer experience.

However, it seems that even where service
providers have acquired authorisation to provide access to copyright content
across multiple territories, they sometimes choose not to do so. Indeed, in the
last years some service providers have rolled out their services across the 27
EU Member States but still maintained restrictions on consumer access to
services outside their Member State of residence. The limiting of offers of
digital content to specific Member States represents an obstacle for consumers
in other Member States who may wish to access that content. Traders, even when
having cleared the necessary copyright and related rights to deliver a service,
sometimes elect to restrict the service territorially, taking into account
factors which are unrelated to copyright. In particular, commercial
decision-making implies the balancing of the costs of providing a given service
against the projected income that services can deliver. These costs may
include: costs of providing access in terms of IT infrastructure and network;
expected take-up taking into account local factors such as availability of
high-speed broadband, pricing of content, competing services; language
versioning; content rating, marketing and promotion etc. While an absolute lack
of the required licences will normally constitute an objective refusal to
supply a service, other reasons, in particular those not related to copyright,
will have to be justified on a case-by-case basis. As indicated above, audio-visual
broadcast services do not fall within the scope of the Services Directive.

6.
Further room for
improvement: Removing
remaining obstacles to the internal market

Service recipients should generally not be
confronted with differences of treatment due to their nationality or residence.
However, Article 20(2), of the Services Directive clarifies that if the service
provider can provide objectively justified reasons for different treatment, it
will not be considered discrimination. This Section briefly refers to a number
of factors that are often invoked by businesses as possible reasons to
establish different treatment and that have to be taken into account by
competent authorities in their case-by-case analysis of a given conduct, as
they may, in some instances justify different treatment given the current
degree of completion of the internal market.

Certain obstacles to the completion of the
single market, particularly in the digital arena, have been identified by the
Commission in recent years, including in the E-Commerce Communication.[31] These areas are being
prioritised in order for the obstacles to be eliminated as quickly as possible,
to make life easier for businesses and consumers.

It will be for competent authorities, in
their case by case analysis, to take due account of the factors mentioned in
this Section to determine whether in the case in question these elements could justify
certain practices or not. The size of the provider is an additional element
that might need to be taken into account in the analysis. Competent authorities
are also encouraged to take due account of any legislative developments or
case-law on the new possibilities offered by the internal market to business to
avail of the internal market including the mandatory or voluntary character of
those measures and any remaining obstacles.

6.1.
Payments

With regard to payments, when a
customer wishes to pay for his purchase using a credit card issued in another Member State, instances have been reported whereby the transaction has been blocked or
higher charges applied. Member States, in line with Directive 2007/64/EC of the
European Parliament and of the Council of 13 November 2007 on Payment Services
in the Internal Market, may allow for the imposition of charges for the use of
specific means of payment such as credit or debit cards. However, when Member
States provide for this possibility, they may not discriminate against cards
issued outside that Member State so that such foreign cards would attract
surcharges while cards issued within the Member State in question would not.
Enforcement of this rule has resulted in discriminatory practices being ended
in certain Member States.

Concerning charges for the use of certain
types of payment instruments, Directive 2011/83/EU of the European Parliament
and of the Council of 25 October 2011 on Consumer Rights (‘the Consumer Rights
Directive’), when implemented, will prohibit retailers from charging fees for
the use of individual payment instruments that exceed the cost borne by the
retailer for their use. In addition and as indicated above Article 8, paragraph
3, of the Consumer Rights Directive obliges, for contracts concluded after 13
June 2014, retailer websites to indicate clearly and legibly at the latest at
the beginning of the ordering process whether any payment restrictions apply.
Furthermore, the Commission’s follow up to the January 2012 Green Paper ‘Towards
an integrated European market for card, internet and mobile payments’ will
address specific barriers to a more integrated payments market for card,
internet and mobile payments, thereby leading to broader choice of and better
access to payments means by consumers.

6.2.
Taxation

With regard to national taxation, in
particular VAT, when sales in other Member States make a service provider
subject to a registration obligation in those Member States, the costs of the
supply can increase, being proportionally higher for SME businesses. These may
then be passed on to the customer or justify a refusal to supply. Furthermore,
differences in the VAT rates applied to different products and services in the
different Member States can explain certain price differences visible to the
consumer.

Some services that are commonly
purchased cross-border include electronic services, for example software and
ringtone downloads or access to online games. From 1 January 2015, operators
established in the EU providing these services in the EU will charge VAT at the
rate applicable in the Member State where the customer resides. While these new
rules aim to reduce, even remove, the effect of competition between Member
States’ VAT rates, they may generate costs due to additional complexity. A ‘mini
One Stop Shop’ will be introduced as of the same date allowing businesses to
register, declare and pay the VAT due in other Member States in their own
Member State, reducing administrative burden and facilitating cross-border
provision of telecommunication, broadcasting and electronic services.

6.3.
Divergences in consumer
protection and contract law rules

One of the reasons businesses
commonly give to explain difficulties in engaging in cross-border trade is the
cost of determining and complying with the applicable national consumer
protection and contract law rules. When considering whether to offer their
services in another Member State, service providers must consider what would
happen if something went wrong and if they were to be taken to court by the
customer. This was highlighted in the Matrix study.

Thanks to a robust set of EU rules,
consumers enjoy a common level of protection across the single market against,
for example, unfair contract terms, faulty goods, contracts concluded online or
outside the business’s premises.[32]
However, most of such EU acquis leaves Member States free to adopt more
stringent rules, if duly justified by consumer protection reasons. As a result,
Member States’ legal
frameworks differ as regards consumer protection and contract law, which makes
the determination of the applicable law very important for businesses.

The determination of the
competent court, the applicable law as well as the recognition and enforcement
of judgments are regulated under private international law rules relating to
cross-border dispute resolution. These rules have been harmonised to a great
extent at Union level. Council Regulation (EC) No 44/2001 of 22 December 2000
of the European Parliament and of the Council on jurisdiction and the
recognition and enforcement of judgments in civil and commercial matters (‘Brussels
I Regulation’) is the most important legal instrument to determine which court
is competent to handle a dispute.[33]
The Rome I Regulation[34] (for contractual obligations) and the
Rome II Regulation[35] (for non-contractual relations) determine
the applicable law. In the case of consumer contracts, private international
law rules dictate that when the business is directing its activities to the
country of the consumer, then the consumer protection rules in the consumer’s
country apply in the same way as they apply to national service providers unless,
in the case of services, the supply of services to the consumer takes place
exclusively in a country other than that in which the consumer has his habitual
residence.[36] A case-by-case basis analysis is required
to determine whether an activity is being directed to a given Member State.

The costs of compliance with
differing national rules might give rise to differences in prices and
conditions of services supplied across borders. Similarly, service providers
may be discouraged from directing their activities to other Member States to
avoid having to alter terms and conditions under which the services are
provided. Service providers may sometimes perceive the difficulties in
complying with a range of different requirements as disproportionate to the
revenue they could hope to earn by actively directing their activity to other
Member States. Such costs due to the regulatory environment may then be passed
on to the customer or justify a refusal to supply. However, such concerns
generally do not come into play when the provider is not directing its activity
to consumers in other Member States but when it is approached by a consumer in
another Member State wishing to purchase its services.

The EU has partially reduced
these differences by harmonising certain areas of contract law. The current
rules on EU consumer protection contain minimum requirements for unfair
contract terms and sales and guarantees. Directive 2000/31/EC of the European
Parliament and of the Council of 8 June 2000 (‘E-Commerce Directive’) contains basic
provisions on online contracting. Finally, the Consumer Rights Directive
improves the level of harmonisation of consumer protection legislation across
the EU and achieves common rules in some important domains.[37] The
new rules set out in the Consumer Rights Directive will have to be transposed
into national laws by the end of 2013.[38]

Furthermore, on 11 October 2011
the Commission proposed an optional Common European Sales Law.[39] It aims to facilitate trade by
offering a voluntary set of rules for cross-border contracts in all 27 EU
countries which the parties can choose as the applicable law to cross-border
contracts for the sales of goods, digital content and limited number of related
services. Thereby the proposal will contribute to the elimination of some of
the internal market barriers stemming from diverging national contract law.
This proposal is currently under negotiation in the European Parliament and in
the Council.

However even with the adoption
of the Consumer Rights Directive and of the proposed Common European Sales Law,
considerable barriers stemming from national contract laws in the EU
remain. This is particularly relevant for the contracts falling completely
outside the existing and proposed legislative measures. For instance, services
contracts are almost entirely excluded from the scope of the Common European
Sales Law and some contract law areas are not covered (e.g. legal capacity to
contract or legal representation). Furthermore, considering the optional
character of the proposed Common European Sales Law and its scope, once adopted
the proposal will provide an optional tool to overcome the obstacles created by
different contract laws. As it will not per se eliminate all barriers related
to diverging contract laws, enforcement authorities may wish to take this into
account in their case-by-case analysis.

It is possible for disputes to
arise in the context of a cross-border service provision. For instance, a
consumer may want to take legal action if he had bought a product over the
internet from another EU Member State but it never arrived; if a computer that
he had bought while visiting another EU country did not work properly when he
got it home, or if the construction company renovating his holiday home in
another EU country did not do its work properly. When selling services, traders
may fear being subject to such court proceedings if a dispute arises with a
consumer who bought their services.

Service providers may be
unaware of how to resolve cross-border disputes in a simple, efficient and
low-cost way through Alternative Dispute Resolution procedures. Settling
disputes out of court through alternative dispute resolution (ADR) is faster,
cheaper and easier than court proceedings. Actions proposed to enhance
universal access to quality ADR across the EU will help businesses delivering
services into other Member States better manage their customer relations and it
can also save them some costs of potential court cases. [40] Thus they will remove
disincentives for providers to deliver into the territory of other Member
States. The creation of an EU-wide online platform (‘ODR platform’) providing
consumers and businesses with a single point of entry for resolving on-line the
disputes concerning purchases made on-line in another EU-country should serve
to that purpose.

6.4.
Debt recovery

For service providers who
cannot rely on advance payment, the cost of debt recovery in case of
non-payment may deter them from providing services or selling their goods to
customers in other countries. Some 2.7 % of all business transactions in Europe were written off due to bad debts in 2010,[41] albeit mostly at national
level. EU law on civil and commercial litigation can be used in cases which
have a cross-border element to claim money owed. For instance, the European
Payment Order offers a simplified procedure for cross-border monetary claims
which are uncontested by the defendant. The European Small Claims Procedure is
a simplified procedure which speeds up the processing of cross-border claims
that do not exceed EUR 2000. The Commission has published practical guides on
using these procedures.[42] While both of these initiatives offer
substantial assistance to providers wishing to claim payment for services
rendered to a client in another Member States and the resulting judgment will
circulate in the EU without any need for intermediate proceedings for
recognition and enforcement, the judgment, would still need to be enforced in
accordance with the national rules and procedures of the Member State where enforcement
is sought.

In this context, the Commission
is currently undertaking a pilot project to support SMEs in facilitating
cross-border debt recovery. Its main objective is to increase awareness,
understanding and use of the legal instruments available for claims management,
through financial support for a series of seminars and training sessions in EU
Member States to inform SMEs about debt recovery management and the legal
instruments available in this field.

6.5.
Private copying levies

Rightholders
have an exclusive right to authorise or prohibit the reproduction of their
works (e.g. books, music, films) and other protected subject matter (e.g.
phonograms, broadcasts). Directive 2001/29/EC of the European Parliament and of
the Council of 22 May 2001 on the harmonisation of certain aspects of copyright
and related rights in the information society gives the Member States a
possibility to provide for exceptions to this right. When protected content is
copied by virtue of ‘private copying and reprography exceptions’,[43] rightholders’ harm must be compensated by
means of a fair compensation. Member States often provide for fair compensation
by imposing levies on goods that are typically used to produce copies
(such as blank CDs, recording equipment, MP3 players, computers, printers,
scanners, etc.) Important differences however exist between Member States’ levy
systems as to the equipment which bears a levy or the methodology according to
which the tariffs are set. These differences affect the smooth functioning of
the Single Market.

The
Commission has launched a mediation process which brings key stakeholders
together in order to identify key elements on which a workable agreement could
be found. [44]
The mediation touches in particular upon issues such as the devices subject to
a levy, the methodology for tariff-setting and cross-border sales. At the same
time, private copying and reprography is being analysed in the context of new
digital forms of distribution of copyright- protected content and its
implications for levy systems.

On
the basis of this mediation process, the mediator will formulate
recommendations which could serve as a framework for possible legislative
action.

7.
Conclusions

Article 20 of
the Services Directive prohibits discrimination against service recipients on
the basis of their nationality or country of residence. This applies to
refusals to supply, to limitations of access to offers, or to offers subject to
inferior conditions. Yet too often, consumers are disappointed. There are
instances of refusal to provide a service or unequal conditions available for
consumers from another Member State. Full implementation of Article 20(2) in the Member
States should put an end to discriminatory practices in so far as they are not
objectively justified. The
following actions should help to ensure that this purpose is achieved.

7.1.
Enforcement of Article
20(2) by Member State authorities

Reported complaints of different treatment
have as yet very rarely translated into enforcement decisions by competent
authorities in the Member States, not the least because it appears that in a
good number of instances the problem was resolved amicably after involvement of
enforcement authorities or consumer protection bodies. These authorities should
ensure thorough follow-up of such cases where necessary. In instances of
dispute with regard to service recipients’ rights, and where consumers and
service providers have been unable to reach an amicable solution, including
through the intervention of the relevant assistance bodies, Member State authorities should enforce the national provisions setting out service recipients’
rights under the Services Directive in accordance with the applicable national
procedures.

When assessing whether there is an
objectively justified reason for a refusal to provide a service or to do so
under different conditions, Member State authorities are encouraged to take
into account progress made in the completion of the internal market and the
further elimination of barriers. When action at EU level makes it possible for
businesses to overcome certain current regulatory barriers to the provision of
cross-border services, those businesses’ decision not to make use of those
possibilities (resulting in a refusal to supply or in different treatment)
should be normally supported by other objective justifications. Examples of
such actions could include the completion of the Single Euro Payments Area or
the legislative developments in the area of copyright.

The Commission will coordinate the exchange
of information and good practices between authorities with regard to their
enforcement actions.

7.2.
The Commission’s role:
Information and support to Member States, businesses and consumers

The Commission services will follow up
closely on the way in which the non-discrimination provision is enforced in the
Member States and will coordinate a structured exchange of information and good
practices between authorities with regard to their enforcement actions. The
Commission services will also come forward with further specific guidance on
the basis of experience with the national implementation of this provision and
in order to take into account regulatory developments that will eliminate
remaining barriers for cross-border trade.

The Commission services will continue to
liaise with the business community, including through business representative
organisations, chambers of commerce and other bodies, in order to educate them
on their rights and responsibilities under Article 20(2) of the Services
Directive. In this regard, the Commission will work with Member States to
encourage providers in specific sectors to take action in order to ensure the
quality of their service provision through quality charters for the application
of this provision.

It will also work with businesses to
improve transparency and support efforts by businesses to ensure their
customers can shop cross-border in the single market.

7.3.
Making the single
market more tangible: steps businesses could undertake in applying the rights
granted by Article 20(2)

The Commission is working to ensure
businesses can take advantage of the possibilities presented by use of the
internet. Businesses may choose to focus on building a customer base in their
local or national market. They may also pursue marketing campaigns in the
Member States of their choosing. However, in order to prevent erecting
artificial borders within the EU single market, an effort should be made to
make it possible for consumers in other Member States to gain access to the services
proposed in those target countries, especially those offered online.

In order for Article 20(2) to take full
effect, business providers are called upon to facilitate access to service
recipients who want to benefit from the internal market. Discrimination based directly
on grounds of nationality should no longer occur, as a rule. In addition,
recipients who move to other territories and try to acquire services therein
should not be faced, in principle, with discriminatory treatment on grounds of
their place of residence as their situation will generally be comparable to
that of recipients resident in the Member State where the service is provided.

Businesses selling online should be
encouraged to indicate in advance in a prominent place on their websites any possible
delivery restrictions applying to their services. This practice will become an
obligation further to the implementation of the recently adopted Consumer
Rights Directive.[45]

When businesses selling services online are
approached by customers that are not resident in the Member States to which
those businesses directly (implicitly or explicitly) target their online offers,
refusals to supply or different treatment of consumers resident in other
territories should only occur when it is justified by objective reasons. In the
case-by-case assessment of these reasons, competent authorities may need to
take due account of the size of the company providing the service.

The non-discrimination clause requires a
case-by-case assessment. However, particular attention should be given to cases
where consumers face higher charges than would be imposed for a domestic
transaction when they wish to pay for a service provided in another Member State by credit transfer or direct debit in euro. Consumers should, in principle, no
longer be refused supply on the grounds that it is impossible to physically
deliver goods in another Member State. Similarly, service providers should not
rely on mere geographic factors to apply different conditions of access to
their service, where there are no objective criteria to justify such
differences.

Transparency helps recipients to comprehend
better the reasons behind a possible refusal to supply or a higher price in those
cases in which these may be justified. Businesses are encouraged to provide
reasons for the different treatment upon the request of the recipients. In those
instances in which the business had already given clear indications in advance
of the delivery restrictions applying to its offer, it will probably be easier
for it to provide information to customers on the reasons for those delivery
restrictions. When determining in advance the delivery restrictions that they
apply, businesses will have identified the reasons that underpin their policy.

A number of obstacles still make the
provision of cross-border services difficult and hamper businesses from ‘thinking
European’, both online and offline. These obstacles must be tackled so that
businesses can fully exploit the opportunities that the internal market places
at their disposal. Initiatives are underway at EU level to eliminate the remaining
impediments to cross-border service provision.

ANNEX I

Implementing Provisions

Member State || Implementing Provision in national legal order || Wording of implementing provision (or, where available, English translation) || Date of entry into force

AT || Art. 1, § 23 of the Dienstleistungsgesetz || Die allgemeinen Geschäftsbedingungen eines Dienstleistungserbringers für den Zugang zu einer Dienstleistung dürfen keine auf der Staatsangehörigkeit oder dem Wohnsitz des Dienstleistungsempfängers beruhenden diskriminierenden Bestimmungen enthalten. Unterschiede bei den Zugangsbedingungen sind nicht diskriminierend, wenn sie durch objektive Kriterien gerechtfertigt sind. || 21/11/2011

BE || Article 24(1) de la Loi sur les services du 26 mars 2010, (M.B. du 30 avril 2010, p. 24437) || NL: De afnemers worden niet onderworpen aan discriminerende eisen op grond van nationaliteit of verblijfplaats. De algemene voorwaarden voor toegang tot een dienst, die door de dienstverrichter voor het publiek toegankelijk worden gemaakt, bevatten geen discriminerende bepalingen in verband met de nationaliteit of verblijfplaats van de afnemer, zonder evenwel de mogelijkheid uit te sluiten om verschillende toegangsvoorwaarden te stellen wanneer die verschillen rechtstreeks door objectieve criteria worden gerechtvaardigd.                                               FR: Les destinataires ne sont pas soumis à des exigences discriminatoires fondées sur la nationalité ou le lieu de résidence. Les conditions générales d’accès à un service, qui sont mises à la disposition du public par le prestataire, ne contiennent pas de conditions discriminatoires en raison de la nationalité ou du lieu de résidence du destinataire, sans que cela ne porte atteinte à la possibilité de prévoir des différences dans les conditions d’accès lorsque. || 28/12/2009

BG || Art. 1 and 2 of the Protection Against Discrimination Act || Art. 1: This Act shall regulate the protection against all forms of discrimination and shall contribute to its prevention. Art. 2: The purpose of this Act shall be to ensure to every person the right to: 1. equality before the act; 2. equal treatment and opportunities for participation in public life; 3. effective protection against discrimination. ||

Member State || Implementing Provision in national legal order || Wording of implementing provision (or, where available, English translation) || Date of entry into force

CY || Section 20(2) of the Freedom of Establishment of Service Providers and the Freedom of Movement of Services Law of 2010, Law 76(I)/2010. || Providers shall ensure that the general conditions of access to a service made available to the public do not contain discriminatory provisions relating to the nationality or place of residence of the recipient, but without precluding the possibility of providing for differences in the conditions of access where those differences are directly justified by objective criteria. || 16/07/2010

CZ || Pre-existing provision: Antidiscrimination Act No 198/2009 Coll., § 1/1 j), § 2Consumer Protection Act No 634/1992 Coll. ,§ 6 || § 6 Zákaz diskriminace příjemců služeb (1) Poskytovatel služby je povinen zajistit, aby podmínky přístupu k poskytovaným službám nebyly diskriminační, zejména co se týče státní příslušnosti příjemců služeb nebo jejich místa bydliště. (2) Diskriminací není stanovení rozdílných podmínek přístupu ke službám na základě objektivních kritérií, zejména účtování dodatečných nákladů vzniklých v důsledku vzdálenosti nebo v důsledku technické povahy poskytování služby. Jednotná kontaktní místa || Antidiscrimination Act: 01/12/2009 Consumer Protection Act/ 12/02/2008

DE || § 5 DL-InfoV (Service Information Requirements Regulation) || The service provider shall not make public any conditions of access to a service that contain discriminatory provisions relating to the nationality or place of residence of the recipient. This shall not apply to differences in the conditions of access where those difference are directly justified by objective criteria. || 17/03/2010

DK || Kap 4, §5‘Lov om tjenesteydelser i det indre marked nr. 384 of 25 May 2009 || § 5. A service provider may not subject a service recipient to discriminatory treatment based on the nationality, place of registered office or place of residence of the service recipient. Para. 2. Para. 1 does not preclude the possibility of providing for differences in the conditions of access where those differences are directly justified by objective criteria . || 28/12/2009

Member State || Implementing Provision in national legal order || Wording of implementing provision (or, where available, English translation) || Date of entry into force

EE || § 15(2) of the European Union Services Directive Implementation Act || §15. Prohibition on discrimination of recipients (2) Also, the conditions of access to a service, which are made available to the public by the provider, shall not be discriminating on grounds of the nationality or place of residence of the recipient unless they are directly justified by objective criteria || 28/12/2009

EL || Art. 21 of Law 3844/2010 || 2. The general conditions of access to a service made available to the public at large by a provider shall not contain discriminatory provisions relating to the nationality or place of residence of the recipient, but without precluding the possibility of providing for differences in the conditions of access where those differences are directly justified by objective criteria. || 03/05/2010

ES || Article 16 (3) of Law 17/2009, of 23 November, governing the free access to and exercise of service activities (horizontal law implementing Services Directive),and Article 4, paragraph 2, of Law 25/2009, of 22 December, that modifies 48 laws for its adaptation to Law 17/2009 || Los prestadores de servicios no podrán imponer a los destinatarios requisitos ni condiciones generales de acceso a los servicios que sean discriminatorios por razón de su nacionalidad o lugar de residencia, sin que ello menoscabe la posibilidad de establecer diferencias en las condiciones de acceso directamente justificadas por criterios objetivos. || 24/12/2009

FI || Legal order was deemed to be in conformity with Article 20, paragraph 2, by virtue of the following provisions Constitution, 731/1999, (6 § equality); Non-discrimination Act, 21/2004, (6 § prohibition of discrimination); Administrative procedure act, 434/2003, (6 § Legal principles of administration); Criminal Act, 39/1889, (Chapter 11, 11 § Discrimination) || ||

Member State || Implementing Provision in national legal order || Wording of implementing provision (or, where available, English translation) || Date of entry into force

FR || Article L. 420-1 Code de commerce prohibant les ententes anticoncurrentielles Article L. 420-2 Code de commerce relatif aux abus de position dominante Article L. 442-6 Code de commerce sur les pratiques restrictives de concurrence. For consumer transactions Article L. 122-1 Code consommation, Article R. 121-13 Code de consommation (sanctions). || || 10/12/1986 for provisions on competition law 1/12/1986 for provisions on Code de la Consommation.

HU || Act LXXVI of 2009 on the general rules regarding access to and exercise of service activities, Article 11(1) and (2) || (1) In respect of the use of services provided in the framework of service activities, all kinds of discrimination based on the nationality, place of residence or registered office shall be prohibited, unless there are other, reasonably justified conditions based on objective consideration related to the nature of the service. (2) The general terms of contracts applied by the service provider for the use of the service constituting discrimination provided for under paragraph (1) shall be null and void. || 01/10/2009

IE || Regulation 10 of the European Union (Provision of Services) regulations 2010 (S.I. No. 533 of 2010) || 10. (1) A competent authority in the State shall not impose on a recipient a discriminatory requirement that is based on the recipient’s nationality or place of residence.   (2) Subject to paragraph (3), a provider who provides a service to the general public shall not discriminate in the conditions on which the service is provided to a recipient on the basis of the recipient’s nationality or place of residence.   (3) A provider may provide for differences in the conditions of access where those differences are directly justified by objective criteria.   (4) A requirement or condition imposed in contravention of this Regulation has no effect. || 16/11/2010

Member State || Implementing Provision in national legal order || Wording of implementing provision (or, where available, English translation) || Date of entry into force

IT || Article 29(1) del Decreto Legislativo n. 59/2010, ‘Attuazione della direttiva 2006/123/CE relativa ai servizi nel mercato interno’ (horizontal law implementing the Services Directive) || Art. 29 (Divieto di discriminazioni) 1. Al destinatario non possono essere imposti requisiti discriminatori fondati sulla sua nazionalità o sul suo luogo di residenza. 2. E’ fatto divieto ai prestatori di prevedere condizioni generali di accesso al servizio offerto che contengano condizioni discriminatorie basate sulla nazionalità o sul luogo di residenza del destinatario, ferma restando la possibilità di prevedere condizioni d’accesso differenti allorche’ queste sono direttamente giustificate da criteri oggettivi. 3. A decorrere dalla data di entrata in vigore del presente decreto sono abrogate le disposizioni legislative e regolamentari statali incompatibili con le disposizioni di cui al comma 1 || 26/03/2010

LT || Article 11(3) of the Law on Services of the Republic of Lithuania || When establishing the general conditions for receiving services that are made available to the public, it shall be prohibited to impose requirements discriminating the recipients on grounds of nationality, permanent residence or Member State of the establishment, except when such requirements can be objectively justified || 28/12/2009

LV || Law on the Free Provision of Services, Section 10 || Section 10. Rights of the service recipient (1) The service recipient’s rights to receive a service shall not be restricted: 1) by obliging him to obtain a permit in order to receive or use a particular service; 2) by imposing a prohibition or restriction on him regarding the receipt of financial aid, if this right or scope of aid is dependent on the status of the service recipient concerned in Latvia or in those locations where the service is provided.    (2) A service recipient has the right to receive a service which is not discriminative regarding his/her citizenship (nationality) or residence, except the cases, when the application of such conditions is clearly and distinctly formulated, objectively justified, is fair and honest. || 04/05/2010

Member State || Implementing Provision in national legal order || Wording of implementing provision (or, where available, English translation) || Date of entry into force

LU || Article 11 of Loi 24 mai 2011 relative aux services dans le marché intérieur (Horizontal law implementing the Services Directive) || Les exigences discriminatoires fondées sur la nationalité ou le lieu de résidence des destinataires sont interdites, y compris dans les conditions générales mises à disposition par les prestataires. Toutefois, les prestataires ont la possibilité de prévoir des différences dans les conditions d’accès lorsqu’elles sont directement justifiées par des critères objectifs. || 24/05/2011

MT || Article 9 of ACT No. XXIII of 2009 to establish general provisions facilitating the exercise of freedom of establishment for service providers and the free movement of services in the internal market || 9. Recipients and potential recipients of a service shall not be subjected to discriminatory requirements, including:(a) limitations to access to services in Malta through a provider’s general conditions that contain discriminatory provisions relating to the nationality or place of residence of the recipient, provided that this does not preclude the possibility for a provider to provide for differences in the conditions of access where those differences are directly justified by objective criteria. ||

NL || Article 1 of the Dutch Constitution; • Article 1, paragraph 1, of the General Equal Treatment Act(definitions); Article 2, paragraph 1, of the General Equal Treatment Act; Article 7, paragraph 1, of the General Equal Treatment Act; Article 9 of the General Equal Treatment Act || • Article 1 of the Dutch Constitution: All which are present in The Netherlands, shall be treated equally in equal cases. Discrimination due to religion, affiliation, political opinion, race, sex or on any ground whatsoever, is prohibited. • Article 1, paragraph 1, (definitions) of the General Equal Treatment Act: 1. In this Act and the articles based thereupon the following applies: a. discrimination (in Dutch: onderscheid): direct and indirect discrimination as well as an order to that end; b. direct discrimination: discrimination between persons on the basis of religion, philosophy of life, political persuasion, race, sex, nationality, hetero- or homosexual inclination or civil state; c. indirect discrimination: discrimination based on other qualities or behaviour as referred to under b, which have a direct discriminatory effect.’ • Article 2, paragraph 1, of the General Equal Treatment Act: ‘1. The prohibition of discrimination as provided for in this Act does not apply with regard to indirect discrimination if that discrimination can be objectively justified by a legitimate goal and the means to attain that goal are proportionate and necessary.’ • Article 7, paragraph 1, of the General Equal Treatment Act:  1. Discrimination is prohibited when offering or providing access to goods or services and when closing, excuting or terminating such a contract, as well as when giving carreer advice and advice on school choice or choice of a profession, when this occurs: a. in the exercise of a profession or a business, b. by public authorities c. by organisations active in the field of social housing, welfare, health, culture or education, and d. by natural persons which do not act in the exercise of a profession or a business, when offering occurs in public.  Note: Paragraphs 2 and 3 of Article 7 of the General Act contain some exceptions in the fields of education by private schools which are based on religious principles and when dealing with purely private relationships where no economic activity is concerned. • Article 9 of the General Equal Treatment Act: ‘Contractual provisions in breach of this Act are null and void.’ || Article 1 of the Dutch Constitution (current wording): 2/03/1983 Article 1, paragraph 1, General Equal Treatment Act (current wording): 1st of September 1994 as last modified by Act applicable from 1/04/2004 Article 2, paragraph 1, of the General Equal Treatment Act (current wording): 1/09/1994 as last modified by Act applicable from 1/04/2004 Article 7, paragraph 1, of the General Equal Treatment Act (current wording): 1/09/1994 as last modified by Act applicable from 1/04/2004 Article 9 of the General Equal Treatment Act (current wording): 1/09/1994

PL || Article 9 of the Act on providing services on the territory of the Republic of Poland || A provider shall ensure that general conditions of access to a service do not discriminate a recipient on the grounds of citizenship or place of residence. || 10/04/2010

PT || Article 19 of Decree-Law 92/2010, of 26 July 2010 (horizontal law implementing Services Directive) || Article 19 Non-discrimination of recipients 1 — Service recipients shall not be made subject to discriminatory requirements based on their nationality, place of residence or location of the registered office. 2 — The general conditions of service provision defined by the service provider shall not contain discriminatory provisions relating to the nationality, place of residence or location of the registered office of the service recipient, except where those differences are directly justified by objective criteria. 3 — The law shall not make recipients subject to any conditions, limitations, prohibitions or other requirements which restrict the use of a service supplied by a provider established in another Member State. 4 — ‘‘Recipient’’ shall be deemed to mean any natural person who is a national of a Member State or who benefits from rights conferred upon him by Community acts, or any legal person established in a Member State, who, for professional or non-professional purposes, uses, or wishes to use, a service. || 01/10/2010

Member State || Implementing Provision in national legal order || Wording of implementing provision (or, where available, English translation) || Date of entry into force

RO || Government Emergency Ordinance no. 49/2009, Art. 20(2) (Section IV — Rights of the services’ beneficiaries, Chapter IV — Freedom to provide services) || (1) The providers may not include discriminatory requirements based on his citizenship or nationality, or the place of residence or the registered office of the recipient under the general conditions of access to a service, which are made available to the public.           (2) Providers may provide for different conditions of access where they are justified by objective criteria.            (3) The clauses or declarations containing discriminatory conditions are automatically void. || 05/06/2009

SE || Article 20, Act (2009:1079) on services in the Internal Market || En tjänsteleverantör får inte för tillhandahållandet av tjänster ställa upp allmänna villkor som diskriminerar tjänstemottagare på grund av nationalitet eller bosättningsort, om detta inte kan motiveras på objektiva grunder. || 27/12/2009

SI || Article 17 of Decree Promulgating the Services in the Internal Market Act (ZSNT) || Contractual and general conditions for access to services which are made available to the public at large by a service provider may not contain discriminatory provisions relating to the nationality or place of residence of the service recipient. || 30/03/2010

SK || Act No 136/2010 Coll. on services in the internal market and amending and supplementing certain acts — Art. 1 Section 10 || A service provider shall be obliged to ensure that the same conditions of access to services provided apply to all recipients of services regardless of the nationality, place of permanent residence or registered office of the recipient of the service. || 01/06/2010

Member State || Implementing Provision in national legal order || Wording of implementing provision (or, where available, English translation) || Date of entry into force

UK || Regulations 30(2) and 30 (3) of the Provision of Services Regulations 2009 || (1) A competent authority may not subject recipients of a service who are individuals to discriminatory requirements based on their nationality or place of residence. (2) The provider of a service may not, in the general conditions of access to a service which the provider makes available to the public at large, include discriminatory provisions relating to the place of residence of recipients who are individuals. (3) Paragraph (2) does not apply to differences in conditions of access which are directly justified by objective criteria || 28/12/2009

EEA-EFTA countries ||

IS || Art 15, Act 76/2011 on services in the internal market of the European Economic Area || The recipients of services shall not be made subject to discriminatory requirements based on their nationality or place of residence, and providers are prohibited from including in their terms of service discriminatory provisions relating to the nationality or place of residence of recipients. In exceptional circumstances, different conditions of access to a service may be established, provided that the differences are justified by objective criteria. || 29/06/2011

LI || Article 21 of the Services Act (Bericht und Antrag der Regierung betreffend die Schaffung eines Gesetzes über die Erbringung von Dienstleistungen (Dienstleistungsgesetz)) || Der Dienstleistungserbringer darf den Zugang zu einer Dienstleitung nicht in diskriminierender Weise von der Staatsangehörigkeit oder dem Wohnsitz des Dienstleistungsempfängers abhängig machen. Underschiede bei den Zugangsbedingungen sind nicht diskriminierend, wenn sie durch objektive Kriterien gerechtfertigt sind. ||

NO || § 19 (2), second and third sentence of Lov 2009-06-19 nr. 103 om tjenestevirksomhet (Norwegian Services Act) || Service recipients cannot be subject to requirements that limit their right to receive services from a provider established in another EEA State. Service recipients from other EEA States cannot be subject to discriminatory requirements on grounds of their nationality, residence or establishment state. Similar discrimination must not occur in a service providers’ general conditions of access to a service. The first and second sentences do not to prevent the application of special conditions for the receipt of the service when they are justified by objective factors. || 28/12/2009

ANNEX II

Competent Authorities

Member State || Competent authority — Consumer enforcement || Competent authority — Business enforcement

AT || Bezirksverwaltungsbehörde || Bezirksverwaltungsbehörde

BE || SPF Economie, P.M.E., Classes moyennes et Energie — Direction générale du Contrôle et de la Médiation || SPF Economie, P.M.E., Classes moyennes et Energie — Direction générale du Contrôle et de la Médiation

BG || Commission on Consumer Protection || Commission on Consumer Protection

CY || Consumer and Competition Protection Service (CCP) || National courts

CZ || Courts, Ombudsman, Czech Trades Inspectorate, ECC || National courts

DE || 7 000 trade and business authorities, chambers of auditors, lawyers and tax consultants   ||

DK || Forbrugerombudsmanden (Danish Consumer Ombudsman) || Forbrugerombudsmanden (Danish Consumer Ombudsman)

Member State || Competent authority — Consumer enforcement || Competent authority — Business enforcement

EE || Estonian Consumer Protection Board (although no specific tasks under Art 20 have been delegated it to it by law) || National courts

EL || Consumers Ombudsman || Enterprise Europe Network in Greece

ES || Consumer protection regional authorities to be found at http://aplicaciones.consumo-inc.es/cidoc/Consultas/dirMapas.aspx?tabla=dirconsum || Sectoral competent authorities responsible at national or regional level

FI || Civil or criminal courts depending on the nature of the case. In some circumstances the Chancellor of Justice, Parliamentary Ombudsman, Ombudsman for equality or Ombudsman for minorities may also be competent. || Civil or criminal courts depending on the nature of the case. In some circumstances the Chancellor of Justice, Parliamentary Ombudsman, Ombudsman for equality or Ombudsman for minorities may also be competent.

FR || Direction générale de la concurrence, de la consommation et de la répression des fraudes (DGCCRF), Ministère de l’économie, des finances et de l’industrie || National courts

Member State || Competent authority — Consumer enforcement || Competent authority — Business enforcement

HU || Equal Treatment Authority (Egyenlő Bánásmód Hatóság-EBH), Judicial authority || Hungarian Competition Authority (Gazdasági Versenyhivatal — GVH), Equal Treatment Authority, Judicial authority

IE || Sectoral competent authorities responsible for the enforcement of all provisions pertaining to the implementation of the Services Directive for that sector || Sectoral competent authorities responsible for the enforcement of all provisions pertaining to the implementation of the Services Directive for that sector

IT || ANTITRUST (autorità garante della concorrenza e del mercato) Civil courts || ANTITRUST (autorità garante della concorrenza e del mercato) Civil courts

LT || State Non Food Products Inspectorate (consumer rights protection authority) || National courts

LV || Ombudsman Civil courts || National courts

LU || Collective and single legal actions in front of Courts in the scope of articles L.121-1 à 122-8 and L.313-1and L.313-2 du Code de la consommation || Conseil de la concurrence

Member State || Competent authority — Consumer enforcement || Competent authority — Business enforcement

MT || Office for Consumer Affairs, Malta Competition and Consumer Affairs Authority || Office for Consumer Affairs, Malta Competition and Consumer Affairs Authority

NL || Equal Treatment Commission || Equal Treatment Commission

PL || Civil courts || Civil courts

PT || ASAE — Autoridade para a Segurança Alimentar e Económica IRAE — Inspecções Regionais de Actividades Económicas for the Azores and Madeira Regions. For professional services under a public professional association, the relevant public professional association || ASAE — Autoridade para a Segurança Alimentar e Económica, IRAE Inspecções Regionais de Actividades Económicas for the Azores and Madeira Regions For professional services under a public professional association, the relevant public professional association.

RO || National Authority for Consumers Protection || National courts

SE || Sectoral competent authorities responsible for the enforcement of all provisions pertaining to the implementation of the Services Directive for that sector || Sectoral competent authorities responsible for the enforcement of all provisions pertaining to the implementation of the Services Directive for that sector

SI || Market Inspectorate of the Republic of Slovenia || National courts

SK || Slovak Trade Inspection || Slovak Trade Inspection

Member State || Competent authority — Consumer enforcement || Competent authority — Business enforcement

UK || Office of Fair Trading, Local Authority Trading Standards Authorities and the Department of Enterprise, Trade and Investment in Northern Ireland || National courts

EEA-EFTA countries

IS || Consumer Agency || National courts

LI || Office of Trade and Transport || Office of Trade and Transport

NO || Consumer Ombudsman || National courts

[1]       See:http://ec.europa.eu/consumers/strategy/docs/EC\_e-commerce\_Final\_Report\_201009\_en.pdf.

[2]       See:http://ec.europa.eu/internal\_market/services/docs/services-dir/studies/20091210\_article20\_2\_en.pdf.

[3]       See
judgment of the Court of Justice of 16 January 2003, case C-388/01, Commission
v. Italy.

[4]       European
Parliament resolution of 21 September 2010 on Completing the Internal Market
for E-Commerce (2010/2012(INI)); points 31 and 32; Conclusions of
Competitiveness Council on Digital Single Market and Governance of the Single
Market of 30-31 May 2012, available at http://www.consilium.europa.eu/press/council-meetings.

[5]       Cases
286/82 and 26/83, Luisi and Carbone v. Ministero del Tesoro, (1984) ECR
377.

[6]       Cases
C403/08 and C429/08, Football Association Premier League, 4 October 2011.

[7]       See
judgment of 16 January 2003, case C-388/01, Commission v. Italy.

[8]       See
judgment of 1 October 2009 in case C-103/08 ,Arthur Gottwald. In
that judgment the Court of Justice ruled under former Article 12 EC Treaty [now
Article 18 TFEU] and not under the freedom to receive services clause.

[9]       Available
at http://ec.europa.eu/internal\_market/services/services-dir/documents\_en.htm.

[10]       Article 57 TFEU.

[11]     See Article 2 of the Services Directive.

[12]     In
accordance with Directive 2011/83/EU of the European Parliament and of the
Council of 25 October 2011 (‘Consumer Rights Directive’), the definition of
consumer covers natural persons who are acting outside their trade, business,
craft or profession.

[13]     See
former Article 12 EC Treaty and now Article 18 of TFEU.

[14]     Judgments
of the Court of Justice in cases C-350/96 Clean Car, and C-279/93
Finanzamt Köln-Altstadt v Schumacker [1995] ECR I-225.

[15]     Member
States are in principle free to extend the non-discrimination obligation to
unjustified differences based on residence in different parts of the territory
of a single Member State (regions, towns).

[16]     According to the Commission Staff Working Paper ‘Bringing e-commerce
benefits to consumers’ published on 12 January 2012, in 2010, nearly three out
of four (74 %) EU retailers did not actively target their sales across
borders into other EU countries.

[17]     WHOIS
is a query and response protocol that is widely used for querying databases
that store the registered users or assignees of an Internet resource, such as a
domain name, an IP address block, or an autonomous system.

[18]     http://ec.europa.eu/internal\_market/services/docs/services-dir/studies/20091210\_article20\_2\_en.pdf,
See Section 4.

[19]     The
examples provided in this section draw inspiration on real cases of which the
Commission has been made aware but they do not necessarily reflect existing
practices in the sectors mentioned.

[20]     Despite
this clear obligation on Member States, it would seem that in certain
exceptional cases, refusal to supply by universal service providers in specific
circumstances (e.g. force majeure) and/or specific geographical conditions
(e.g. isolated islands) occurs. This refusal may result in service recipients
resident in those areas having difficulties in accessing certain services.

[21]     Service
providers may however have concerns that they cannot achieve an appropriate
level of service related to the delivery of their products; for instance with
regard to the display of the product or taking back returns in time for the
products to be resold, or if return policies are comparably more difficult for
their customers to manage.

[22]     The
difference could be due to different cost structures of postal operators,
higher costs of cross-border delivery (e.g. longer logistical chain; additional
administrative costs), type of delivery agreements made between operators),
different levels of competition in the domestic and cross-border settings, or
insufficient quantities (volume of items) sent into the territory of other
Member States which would mean that service providers would not be able to
avail of preferential rates for delivery services in those Member States. The
internal handling of the procedures involved in shipping to another Member
State may also be expensive for the trader, in particular concerning when
selling lower-value goods.

[23]     Article
6 of Consumer Rights Directive mentioned above in footnote 12.

[24]     Whether
a vertical agreement actually restricts competition and whether in that case
the benefits outweigh the anti-competitive effects will often depend on the
market structure. In principle, this requires an individual assessment.
However, the Commission has adopted Regulation (EU) No 330/2010, the Block
Exemption Regulation (‘BER’), which provides a safe harbour for most vertical
agreements. Regulation (EU) No 330/2010 renders, by block exemption, the
prohibition of Article 101(1) TFUE inapplicable to vertical agreements which
fulfil certain requirements.

[25]     SEC(2010) 411,
see
http://ec.europa.eu/competition/antitrust/legislation/guidelines\_vertical\_en.pdf.

[26]     See
Article 8 of the Consumer Rights Directive mentioned above in footnote 12.

[27]     The
IBAN and in some cases the BIC may need to be supplied.

[28]     Articles
2 and 3 of Directive 2001/29/EC of the European Parliament and of the Council
of 22 May 2001 on the harmonisation of certain aspects of copyright and related
rights in the information society.

[29]     http://ec.europa.eu/internal\_market/services/docs/services-dir/studies/20091210\_article20\_2\_en.pdf,
see Section 4.3.

[30]     The
Commission will table a legislative proposals on Collective Rights Management
in 2012 with the aim to help simplify the complex system of licensing music
online and to improve the governance and transparency of collecting societies.

[31]
Available at:
http://ec.europa.eu/internal\_market/e-commerce/communication\_2012\_en.htm.

[32]     See
Council Directive 93/13/EEC of 5 April 1993 on unfair terms in consumer
contracts (‘Unfair Contract Terms’), Directive 99/44/EC of the European
Parliament and of the Council of 25 May 1999 on certain aspects of the sale of
consumer goods and associated guarantees (‘Consumer Sales Directive’). Directive
97/7/EC of the European Parliament  and of the Council of 20 May 1997 on the
protection of consumers in respect of distance contracts (‘Distance Selling
Directive’) and Council Directive 85/577/EEC of 20
December 1985 to protect the consumer in respect of contracts negotiated away
from business premises (‘the Doorstep Selling Directive’),
which currently provide for minimum harmonisation, will be replaced by the
Consumer Rights Directive mentioned above.

[33]     The
Brussels I Regulation provides that actions against a person domiciled in a Member State can, as a general rule, be brought in the courts of that State. It also provides
that cases resulting from a contractual relationship may be decided by the
courts of the place of performance of the contractual obligation. In the case
of consumer contracts, however, rules protecting the consumer apply. In order
for those protective rules to apply, the Brussels I Regulation requires that
the trader ‘directs its activities’ to the Member State in which the consumer
is domiciled. (Article 15 (1) (c)).

[34]     Regulation
(EC) No 593/2008 of the European Parliament and of the Council of 17 June 2008
on the law applicable to contractual obligations (Rome I), OJ L 177/6,
04.07.2008.

[35]     Regulation
(EC) No 864/2007 of the European Parliament and of the Council of 11 July 2007
on the law applicable to non-contractual obligations, OJ L 199/40, 31.07.2007 .

[36]     See
the Rome I Regulation, Article 6(4)(a).

[37]     For
distance and off-premises contracts, the information requirements for traders,
the consumer’s right of withdrawal from the contract and the obligations for
traders and consumers in case of withdrawal will be fully harmonised. Both
consumers and traders will benefit from standard forms for the rights of
withdrawal. Additionally, the Directive entails new harmonised rules on the
passing of risk in sales contracts and the default time-limit for the delivery
of goods as well as a ban on hidden charges, on pre-ticked boxes which impose
surcharges higher than the trader’s actual costs for the use of a certain
payment means (e.g. credit cards) and on charges for telephone hotlines higher
than the standard telephone rate for calls. As to the scope, contracts on the
provision of utilities (water, gas, electricity) and contracts concerning
digital content will also be covered by the new rules, but certain areas such
as healthcare services, passenger transport and gambling will be excluded.

[38]     It
should be noted that the application of the Consumer Rights Directive to
digital content (data produced and supplied in digital form such as computer
programs, applications, games or music). Contracts for the supply of digital
content are within the scope of the Directive, but the right of withdrawal is
limited to situations where the performance of the contract has not yet begun
or begun without the consumer’s prior consent or, if the digital content is
provided on a tangible medium such as a CD, where the consumer has not yet
unsealed it. The Consumer Rights Directive improves and clarifies the
information rights for consumers when purchasing digital content. In
particular, traders will have to inform (consumer) buyers of digital content
not only about its compatibility with hardware and software, but also about the
application of any technical protection measures or digital rights management,
for example about a limitation on the right of the consumers to make copies of the
content.

[39]     See
http://ec.europa.eu/justice/newsroom/news/20111011\_en.htm.

[40]     See
http://ec.europa.eu/consumers/redress\_cons/adr\_policy\_work\_en.htm.

[41]     Source:
Intrum Justitia 2011 European Payment Index, see
http://www.intrum.com/About-Us/European-Payment-Index/.

[42]       Available
at: http://ec.europa.eu/civiljustice/publications/publications\_en.htm.

[43]     Article
5(2)(a) and Article 5(2)(b) of Directive 2001/29/EC of the European Parliament
and of the Council of 22 May 2001 on the harmonisation of certain aspects of
copyright and related rights in the information society.

[44]     http://ec.europa.eu/commission\_2010-2014/barnier/headlines/speeches/2012/04/20120402\_en.htm.

[45]     Article
8(3) of the Consumer Rights Directive.

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