EU Urged 'Not To Cripple Online Retailers'

A leading business group is urging the EU to abandon proposals which could cripple smaller online retailers.

Under Article 22a of the forthcoming EU Consumer Rights Directive, web-based independent traders could soon be obliged to sell their products to almost every country in Europe.

And under Article 17 of the Directive, businesses would be forced to pay the postage costs if a customer decides to return goods worth more than £35, within up to two weeks of a purchase being made.

Not-for-profit small business support organisation the Forum of Private Business believes that even taken individually, each article could have a seriously detrimental impact on smaller companies selling over the internet. However, when combined, the effect of the two articles together could be devastating.

The Forum is concerned that selling to all EU nations would be highly impractical for small to medium-sized enterprises (SMEs) in the ecommerce industry for many reasons, including problems processing payment, avoiding falling victim to fraudsters and complying with additional local regulations in other European countries.

Forum Chief Executive Phil Orford said: "While we welcome the Consumer Rights Directive's overall aim of harmonising and simplifying retail regulations across the EU, several of the proposals it contains are extremely ill-advised and, implemented together, could create a ‘perfect storm' for independent web-based retailers.

"Being obliged to sell to every single country in the EU may not be a problem for multi-national companies, but it could spell the death knell for countless SMEs in the ecommerce industry. Many independent online retailers only have the expertise and the infrastructure to sell to the domestic market, or to a select few overseas countries, and some have built themselves up around one particular product which they are only licensed to sell in a certain national market.

Mr Orford added: "Forcing businesses to serve consumers in all member states and then introducing a rule which requires them to pay the shipping costs on refunded goods, to markets which they did not want to ship to in the first place, is highly unfair.

"We are calling on the EU to see sense and make sure these particular parts of the Directive are dropped."

The Directive is currently being considered by the EU Parliament Internal Market and Consumer Protection Committee. It could come into effect as early as January 2013.

The Forum is currently in the process of lobbying MEPs and relevant Government ministers on the issue.

(BMcN/GK)