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European Union Approves New E-commerce Directive

12 December 1999

European Union industry ministers have approved a new directive that establishes the legal framework for e-commerce within the EU by ensuring that existing rules for the sale of goods and services in the EU would apply equally to on-line purchases. The directive will now go to the European Parliament for consideration and all being well is expected to be implemented by mid-2001.

The directive covers areas such as establishing e-commerce merchants' place of business, the legal status of on-line contracts, liability of internet intermediaries, mutual recognition of laws, transparency of commercial communications and 'spam' opt-out registers. The basic aim of the directive is to ensure e-commerce operators can offer their services throughout any of the EU's 15 countries so long as they comply with the national laws of their home country. This will mean that e-commerce companies will be spared the nightmare of trying to comply individually with the laws of each EU member country.

One contentious issue that was resolved at the EU industry ministers meeting is the question of liability for illegal content. The ministers agreed that the directive should exempt from liability internet intermediaries as long as they are only a "mere conduit" for third party data, such as Internet Service Providers who provide cacheing services for their subscribers. Intermediaries that provide hosting services would only be liable for illegal content if they could have known about it or failed to remove it once they became aware that it was illegal. To address concerns primarily voiced by Sweden, the ministers also agreed to conduct a review once the new regulations have been implemented to determine to what extent liability should be borne by hosting and cacheing service providers for their content.



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