Online traders who trade with consumers must now include information on their websites about the EU online dispute resolution (ODR) platform launched last month. The ODR platform is a free website which offers consumers and traders a simple means to resolve disputes arising from the purchase of goods and services online. ODR is an alternative dispute resolution procedure that is conducted entirely online. Alternative dispute resolution (ADR) refers to any means of settling disputes outside the court process and includes mediation and arbitration.
OVERVIEW OF THE ODR PLATFORM
The ODR platform was launched by the European Commission on 15 February 2016. In addition to facilitating dispute resolution, it provides general information on ADR.
It was introduced by the following EU and Irish implementing Regulations:
- EU: Regulation (EU) 524/2013 on Online Dispute Resolution for Consumer Disputes.
- Irish implementing regulations: European Union (Online Dispute Resolution for Consumer Disputes) Regulations 2015.
Each member state has a point of contact for the ODR platform. The point of contact for the ODR platform in Ireland is the European Consumer Centre Ireland who, along with two dedicated ODR advisors, will provide assistance to ODR platform users. The Regulations do not make the use of ADR mandatory. However, traders in certain sectors (e.g. financial services) may be subject to mandatory ADR schemes.
WHO DO THE REGULATIONS AFFECT?
The Regulations apply to:
- traders who sell goods and services online to consumers anywhere in the EU;
- traders who sell goods and services by other electronic means such as by text, email and social media;
- online market places, i.e. websites which sells goods on behalf of others; and
- both domestic and cross border transactions.
The definitions of 'trader' and 'consumer' in the Regulations are very broad. A 'consumer' is defined as any natural person who is acting for purposes which are outside his trade, business, craft or profession. Accordingly, the Regulations do not apply to consumers who purchase goods or services as part of their business or trade.
The definition of trader is particularly broad and includes a wide range of online operators. A trader is defined as any natural person, or any legal person irrespective of whether privately or publicly owned, who is acting, including through any person acting in his name or on his behalf, for purposes relating to his trade, business, craft or profession.
WHAT INFORMATION MUST TRADERS INCLUDE ON THEIR WEBSITES?
Traders established within the EU who sell goods or services online must provide the following information on their website:
- a link to the ODR platform. This link must be easily accessible for consumers; and
- a business email address to provide consumers with a first point of contact in the event of a dispute.
If a trader does not provide this information on its website, it will be committing an offence and will be liable on summary conviction to a fine or a term of imprisonment for up to 12 months or both.
HOW DOES THE ODR PLATFORM WORK?
Both consumers and traders can use the complaints procedure. If the parties cannot agree on an ADR provider within 30 days of the submission of the complaint, or a party refuses to engage with the process, the complaint will not be processed further. In either of these instances, the complainant may contact an ODR advisor for general information on other means of redress.
A WELCOME DEVELOPMENT
The ODR platform offers consumers and traders a simple, cost-effective and efficient way to resolve their disputes. Over time it should lead to an increase in consumer confidence when buying online. This in turn should lead to increased growth and competitiveness across the EU which will ultimately benefit traders. The ODR platform will also help online traders to manage their customer relationships and maintain their business reputation.
This article contains a general summary of developments and is not a complete or definitive statement of the law. Specific legal advice should be obtained where appropriate.