The Electronic Retailing Association

Committee Bulletin: Public Affairs 1Q18

The ERA Public Affairs Committee discusses current national and European public affairs issues and defines ERA Europe's position on them.

From the Public Affairs committee.

In 2018, the European Commission will put emphasis on completing their legislation activities already kicked off in 2017 and earlier, in completing a digital single market given the upcoming election of the European parliament and the resulting approval of a new EU Commission in 2019.

The EU legislators will therefore focus on finishing their dossiers of which the following are of the greatest importance for ERA members:

  • AVMS Directive

  • E-Privacy Regulation

  • New Deal for Consumer protection

  • Taxation measures on digital platforms and digital businesses within EU.

ERA Europe also attended the EMOTA LAC (Legal Affairs Committee) meeting in Brussels. The meeting was mostly centred on the new consumer deal and the GDPR and the new data privacy regulation rules coming up.

New Deal for Consumer Protection:

As guest speaker, Peter Bischof-Everding from DG Just gave some insights on the NEW CONSUMER DEAL. This deal follows certain goals to be realised. The consumer should have more transparency on the actual contract partner. Is it the platform or a 3rd party trader? Also with regards to content. Paid (advertised) content should be clearly recognisable. Personal data is the “Oil” of the 21st century. Therefore free services for data will also fall under the regulation regarding withdrawals, i.e. the rendered data must then be returned if the deal is not conducted. The individual remedies with regard to unfair commercial practices will be streamlined. The divergence between the member states regarding penalties will be reduced. The regulation on precontractual information will be simplified. Dual quality for any products with regards to different markets will be interdicted. They will work on a collective redress system.

The European Commission published the “New Deal for Consumers” package on 11th April 2018 including the abovementioned proposals to strengthen EU consumer rights and enforcement.

Data Protection: GDPR and e-privacy

The other big upcoming issue was privacy and GDPR. Olivier Micol, also from DG Just, shared some details on implementation and the expected practise. He reminded us that the deadline is May 25th 2018 and recalled that from that day on, data processing is only allowed, if companies are compliant with the regulations and are able to prove it. During the discussion participants pointed out that the EU must do more to create a fair level playing field between compliant European companies and players from abroad, that in theory must abide all these rules but in reality there is not a real process in existence to enforce these rules beyond European borders.

Digital taxation package:

The last big agenda item of the day was the idea of the commission to have an internet service tax: The EU published its digital taxation package on 21st March containing two proposals: an interim tax on digital services and a common EU solution for taxation of the digital economy.

The interim tax is a 3 per cent tax on revenues created from certain digital services and applies to companies established in the EU or third countries that have both a total global revenue of 750 million EUR and EU revenues of 50 million EUR.

The common EU solution proposal is a taxation on profits generated by a company, created from digital services, where they are deemed to have a digital presence. It applies to both EU established or incorporated companies as well as companies in third countries, subject to double taxation treaty exemptions.

Those digital services falling under the scope of the package include: digital advertising revenues (Facebook model), subscriber fees (App store), money made through selling users’ personal data (market research firms), and where users can supply goods and services directly to each other through digital intermediaries in return for a fee (digital marketplaces).

The interim tax is based on where the user of the digital service is based (i.e. where the person using a platform or social media service is located)

Webshops that sell goods or services online, via electronic communications or online marketplaces, are exempt from both proposals, as these activities are not considered digital services.

Both proposals require unanimity by all 28 Member States before they can be approved.

Concerns for the eCommerce industry are both the negative effect on market places and also what the market places will do with the tax. The tax may be passed down to sellers using those services, who will then pass it on to consumers.