May 1, 2012, 3:24 PM

New European e-commerce association tackles privacy laws and payments

Ecommerce Europe will lobby for common online retail regulations across Europe.

Lead Photo

Ecommerce Europe—a union of national e-commerce associations from Belgium, Denmark, France, Italy, the Netherlands, Norway and Sweden—swung into action last week by launching its web site, www.ecommerce-europe.eu.

The organization says it will focus on three priority issues as it lobbies EU lawmakers and officials over coming months: EU privacy laws surrounding e-commerce; logistics, particularly shipping merchandise across European national borders; and online payments

“Our first priority is to lobby on European laws,” says Annette Falberg, director of Danish e-commerce federation FDIH. “And we will be paying particular attention to privacy legislation. The second is e-logistics, and we will be drawing up an inventory of what is needed for European logistics to function efficiently. The third focal point is e-payments. We must shift as soon as possible towards European standards as payment transaction systems in Europe are far too fragmented.”

The new association has its work cut out for it. Europe’s legal framework for data protection and privacy is outdated, says Diane Mullenex, senior partner and head of the Telecom Media Technology Department at French law firm Ichay & Mullenex.

The laws apply to 15 countries rather than the 27 in the EU and each country has its own requirements, Mullenex says.

“Maybe 2012 will bring renewal at the EU level in the field of e-commerce,” she says. “Google changed its privacy policy and the European Commission (the EU’s executive arm) published its long-awaited proposal on Jan. 25 calling for comprehensive reform of the rules on personal data protection, which date to 1995.”

In March, Google unveiled a privacy policy that rolled together the privacy policies from 60 Google sites and services into one. The new policy means Google can access individual data from its various platforms including YouTube activity, search histories, Gmail, Google Documents and Google Voice—and combine that data to tailor search results. While Google says the changes bring more transparency, privacy advocates and EU authorities are investigating the policies to determine whether the pooling of user data violates European laws.

The European Commission’s privacy proposal looks to give consumers more control of their personal details and establish one set of online privacy rules across Europe. Ecommerce Europe will have the chance to influence the new laws as they take shape—they are expected to take effect in the next two to three years.

Viviane Reding, vice president of the European Commission, has said Europe’s conflicting online data protection rules costs business 2.3 billion euros (US$3 billion) a year as retailers are forced to modify practices for each country.

“The new reform aims to establish rules that will be applicable across the EU,” Mullenex says. “It will introduce an enormous lightening up of the costs for business, allow a real harmonization at an EU level and provide a much clearer framework than current regulations.”

While establishing one set of privacy rules across all of Europe may help eliminate the headaches of dealing with many separate laws, the laws may be strict, at least compared to those in the United States.

For example, advertisers in the United States can track an individual’s web browsing behavior unless he explicitly opts out of tracking; the EU rules will only allow tracking if the consumer opts in. The law carrying that requirement is scheduled to take full effect this month, forcing European e-retailers to consider how they will adjust their online marketing and web site designs.

The law requires web sites to ask for permission before placing a cookie on a consumer’s browser to track his behavior, such as where he’s come from and what he’s viewed and searched for. No such permission is required for a cookie used to track what a consumer puts in his shopping cart or to remember the shipping address of a customer who is logged in. The law deems that a consumer shopping at a retailer’s site, for example, has given implied consent for the site to collect and store essential information.

It’s the behavioral tracking cookies that retailers must get permission for under the European Directive on Privacy and Electronic Communications, which was passed in November 2009 and formally took effect in May 2011. In fact, EU member states have until this month to enforce the law, and various European countries have been moving at different speeds to release their regulations. The European Commission is considering legal action against EU member states that are late with the transition.

Ecommerce Europe will also be pressing its case for more online Europe-wide payment offerings, as the February 2014 deadline nears for a Single Euro Payments Area. SEPA is a banking industry initiative designed to make it easy for euro-zone consumers and businesses to make purchases electronically across national boundaries.

Marc Lolivier, director of the French e-commerce association FEVAD, is confident Ecommerce Europe will make an impact on EU law and policy makers and facilitate “the already large-scale cross-border online sale of both products and services.”

“Until now there has been no structured representation at an EU level for e-commerce businesses—after all, online sales are not bound by geographic borders,” Lolivier says.

Like the EU itself, the organization may well be a growing affair—its membership doors are open to other national industry associations including those within Germany and the U.K., Ecommerce Europe says.

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