On Dec. 7, the 15 nations of the European Union (EU) agreed on an e-commerce law that would create a single set of Internet transaction guidelines. Now the legislatures of the individual countries and the European Parliament have to review the bill. If the bill is adopted, the EU countries have 18 months to make it law.
The bill allows e-commerce companies to operate by the “country of origin” principle, which means e-marketers are subject to the laws in their headquarters’ country on issues such as trademarks and copyrights. In addition, Internet service providers (ISPs) will not be held liable for illegal third-party content transmitted over their networks – provided they do not initiate the transmission, choose its recipient, or modify the information.
What’s more, consumers will be able to opt out of e-mail solicitations by adding their names to registers that ISPs must monitor regularly, similar to the Direct Marketing Association’s Mail Preference Service and Telephone Preference Service here in the U.S. The bill does little else to address the issue of unsolicited e-mail, according to Charles Prescott, the DMA’s vice president of international business development and government affairs.
Internet taxation still unresolved
The EU bill also does not resolve issues of worldwide Internet taxation and duties. In fact, the EU has been pressuring the World Trade Organization (WTO) to consider taxing three kinds of ‘Net transactions: downloaded online content, such as software; products ordered over the Web and delivered by mail; and network services.
Currently, WTO members do not impose custom duties on products and services purchased online. And the Advisory Committee on Electronic Commerce (ACEC), the 19-member panel set up to make recommendations to the U.S. Congress on Internet taxation, has agreed to push for a permanent ban on U.S. tariffs for overseas products bought online.
But this year, the EU will create its own legislative panel to examine new ways to approach and implement Internet taxation, according to a statement by Michel Aujean, director of tax policy at the European Commission in Brussels.
Opponents contend that imposing duties on electronic transmissions will force companies to set up subsidiaries in foreign countries. Seattle-based Amazon.com, for example, has already set up operations in the U.K. and Germany. But while this enables Amazon to avoid duties, it also renders the marketer subject to the same local taxes that German and U.K. companies pay. The DMA’s Prescott expects a declaration from Europe concerning ‘Net taxation within three to six months.