Bid to make online purchases easier

You find your bargain product on the internet. You decide to buy it. You click on the shopping cart and prepare your credit card details... only to find out that no delivery can be made to Malta.

...with a click of a mouse your rights and obligations would be regulated by European law...- Simon Busuttil

If you have experienced this frustration you are not the only one. Some 40,000 Maltese consumers face it every year when trying to buy online. Consumers from other small countries, such as Cyprus, Slovakia and Slovenia, face similar situations.

The reason is often that the company concerned has no commercial interest in selling in Malta because it faces obstacles that are too expensive to overcome.

Conversely, Maltese businesses who want to venture out of the local market often find it hard to earn the trust of foreign online consumers because foreign consumers might be apprehensive about whether their rights will be protected if something goes wrong.

So although traders have the right to sell abroad (free movement of services), practical difficulties discourage them from taking the plunge. Indeed, many Maltese small businesses – and here I include the single traders – claim to be prepared to take the idea of trying to sell abroad more seriously if only these obstacles were ironed out.

It is with this in mind that, last week, the European Commission proposed a common sales law for Europe. It may sound grand and legalese but, in reality, the notion is very simple.

The idea is to devise a European set of rules that provides rights and obligations for sales, hence the term common sales law. The set of rules would spell out the rights and obligations both for the trader and consumer and bring legal certainty to sales contracts concluded across frontiers.

Legal certainty engenders trust and trust stimulates commerce.

And, yes, the common sales law would be biased in favour of consumers (European law is known to promote consumer rights). But the fact that consumers trust European law can be turned into an opportunity because traders can use it as a selling point or even a quality label that attracts more customers.

In order to overcome resistance in view of the fact that this new EU proposal will replace decades if not centuries of legal tradition in national sales law, the European Commission came out with some smart thinking.

It said that this new proposal will not seek to replace the national laws on sale in the 27 EU countries. Instead, it will create a new legal code – a 28th legal system if you like – that would apply only if the seller and the purchaser agree to do so. So EU countries will not be asked to scrap their national sale laws but simply agree to offer the possibility of allowing the European sales law to operate alongside, as an additional option for business.

In other words, thanks to this new law, if you are buying online you would have the option of clicking on “European Common Sales Law” as an option to regulate your contract of sale. And with a click of a mouse your rights and obligations would be regulated by European law instead of some unknown national law.

But you do not have to choose the European law - it is optional. And if you do not, then the national law of the country where the trader is established would normally apply. This gives you the comfort of knowing exactly what rights you will benefit from as a consumer because they will be clearly spelt out. The rights will relate to returning a defective product, to who pays for transporting a defective product that is sent back for repair, to refunds and compensation and the like – all rights that help consumers feel more at ease in clicking away their credit card purchases.

Equally, traders will benefit from the fact that the European common sales law has a broader appeal and is better known than the national law of his/her own country. Thus, traders offering the possibility of concluding sales under the European sales law would be able to benefit from wider marketability.

This is even more relevant for traders from small countries, such as Malta, who often face legal obstacles in penetrating markets abroad for the simple reason that consumers overseas might be apprehensive of their rights in Malta. It may also be just too expensive for the trader to check out and comply with the laws that apply in the foreign countries where he wants to sell, Doing so is said to cost something in the region of €10,000 per country.

Getting more traders to go for it is, in itself, also good for consumers because more and more companies would start selling to consumers even in small jurisdictions since the same (European) law would apply. Correspondingly, the cases where Maltese consumers are blocked from buying online abroad – with trite messages such as “no-delivery-to-your-country” – would decrease and eventually become a thing of the past.

That is my objective.

www.simonbusuttil.eu

Dr Busuttil is a Nationalist member of the European Parliament.