Electronic Commerce Directive 2000

The Electronic Commerce Directive in EU law sets up an Internal Market framework for online services. Its aim is to remove obstacles to cross-border online services in the EU internal market and provide legal certainty for businesses and consumers. It establishes harmonized rules on issues such as the transparency and information requirements for online service providers; commercial communications; and electronic contracts and limitations of liability of intermediary service providers. Finally, the Directive encourages the drawing up of voluntary codes of conduct and includes articles to enhance cooperation between Member States.
There was wide-ranging discussion within EU institutions about how to revise this directive which finally happened with the adoption of the Digital Services Act 2022.

Historical background and aim of the Directive

In the 1990s, when the general public started using the internet on a larger scale, the European Commission decided to set up a framework to remove obstacles to cross-border online services in the Internal Market. At that time, legal boundaries to cross-border online services were still largely prevalent, which resulted in a lack of legal certainty for online services. In order to address this issue, as well as promote electronic commerce in the EU and enhance competitiveness of European service providers, the e-Commerce Directive was adopted in 2000. The e-Commerce Directive aimed to achieve this objective by offering a flexible, technology-neutral and balanced legal framework.

Scope of the Directive

Personal scope

The regulation applies to information society services, defined as "any service normally provided for remuneration, at a distance, by means of electronic equipment for the processing and storage of data, and at the individual request of a recipient of a service". The provisions of the e-Commerce Directive thus apply to certain activities or services and not to a specific category of providers. In this context, an information society service includes a broad range of online services, e.g. providing transmission of information via communication networks, online hosting, providing access to a communication network, etc.
Recital 18 adds that when a service is free to the consumer, that does not mean that it falls outside the scope of the e-Commerce Directive in so far as it represents an "economic activity such as those offering on-line information or commercial communications, or those providing tools allowing for search, access and retrieval of data". This was reiterated by the European Court of Justice in the Papasavvas case, where the court ruled that a website that was indirectly remunerated through income generated by advertisements could also be qualified as an 'information society service'.
The European Court of Justice also attempted to clarify whether collaborative economy services are included in the personal scope of the Directive. In the Uber Spain case it ruled that Uber's electronic booking platform is not an information society service, but rather "a service in the field of transport", as its "intermediation service must be regarded as forming an integral part of an overall service whose main component is a transport service". In a subsequent ruling, the Court found that Airbnb is an information society service, because the intermediation service forms an integral part of the overall service. With these case, the Court has taken a case-by-case approach in determining whether services in the collaborative economy can be classified as information society services.

Territorial scope

The e-Commerce Directive applies to information society services established in the EU. An information society service is established in the EU when it effectively pursues an economic activity using a fixed establishment for an indefinite period of time. The mere presence and use of technical means and technologies does not constitute in itself an establishment of the provider. Information society services that are established outside the Union are thus not captured by the provisions in the e-Commerce Directive.

United Kingdom

The EU e-Commerce Directive was incorporated into the law of the United Kingdom by the Electronic Commerce Regulations 2002. After the UK left the EU in 2020, EU regulations no longer apply directly to the UK unless specifically agreed, but the 2002 regulations apply.
A consumer is a "natural person who is acting for the purposes other than those of his trade, business or profession." The definition is slightly broader than that for the purposes of the Unfair Contract Terms Act 1977 as the subjective requirement of the person not regarding themselves as acting in the course of a business, therefore one may be a consumer if using a company account or using business details for tax purposes.
Obligations imposed upon the seller include:

Before the contract is formed, the seller must state in a "clear comprehensible and unambiguous manner" the technical step involved to place an order. Terms and conditions under which the contract is concluded must be made available to the consumer in a means capable of reproduction and storage. This does not apply to email, although the Consumer Protection Regulations 2000 may apply. These rights can be expressly exempted, although these regulations applied to the exemption clause, as did the Unfair Contract Terms Act 1977 and the Unfair Terms in Consumer Contracts Regulations 1999.
Information that must be provided to the consumer: Acknowledgement of the order by electronic means without undue delay, and information of how to amend any input errors made. More information must be given under the Consumer Protection Regulations 2000.

Liability of breach of these conditions gives rise to an action for Breach of statutory duty. A court order may be given for access to terms and conditions of which the consumer has already consented. Where the consumer has not been informed in the correct manner of the procedure to amend errors in orders and they have made errors, the contract can be rescinded.
Reg 12 provides that a contractual offer occurs when the order is sent. Richards construes reg 11 as providing that the acknowledgement screen will constitute a contractual acceptance. Instantaneous Communication here is in line with that discussed by Lord Denning in Entores Ltd v Miles Far East Corporation and so communication is effect when received or when it can reasonably be deemed to have been received.

Material scope

The e-Commerce Directive does not apply to the field of taxation, the field of data protection, gambling, questions relating to agreements or practices governed by cartel law, activities of notaries and similar professions which involve the exercise of public authority and the representation of a client and defense of his interests before the courts.

Internal market clause

The internal market clause in article 3 of the e-Commerce Directive is one of the key principle of the e-Commerce Directive. This article establishes the country of origin principle, also referred to as the Single Market clause, which ensures the freedom to provide online services across the Single Market. This principle provides that online service providers are subject to the rules of the Member State in which they are established and not the rules of the Member State where the service is accessible. Member States in which the online service provider provides its services must therefore refrain from applying national legislation.
Derogations to this principle are possible on a strict case-by-case basis under the conditions set out in Article 3 e-Commerce Directive, also referred to as the notification mechanism. Under this mechanism, a Member State has to take the following steps when it intends to act against an information society service established in another Member State:

It has to justify its action for the protection of public order, public health, public security or the protection of consumers;
Its action has to be proportionate to the objective;
The Member State first has to contact authorities of the other Member State and ask them to act. If that brings no result, it has to notify the commission and the other Member State of the action it intends to take. The Commission then has the right to receive information and assess the justification of the measure. If it is found that the action is incompatible the Member State should refrain from action.

Article 3 does not apply to intellectual property rights, consumer contracts, freedom of parties to choose the applicable law, the validity of contracts in real estate and the permissibility of unsolicited commercial communications by electronic mail.

Freedom of establishment

Article 4 e-Commerce Directive establishes that information society service providers may not be made subject to prior authorization by Member States before starting any activities.

Basic rules for e-commerce

Articles 5-11 of the e-Commerce Directive set out some of the basic requirements for online services, which include requirements for commercial communications, requirements for electronic contracts and information obligations towards consumers.

Liability of intermediaries

Articles 12-14 of the e-Commerce Directive set out the limited liability exemptions, also referred to as the safe harbors, which contain the conditions under which certain intermediary service providers are exempted from liability for third party content. The e-Commerce Directive does not provide a definition for intermediary service providers; rather it provides for specific types of activities to be conditionally exempted from liability, specifically:

Mere conduit;
Caching; and
Hosting.

Only when a service falls under one of the specific activities can it be exempted from liability. The safe harbors do not prevent intermediaries from taking measures against the infringement of third party rights, either through injunctions or duties of care, as was set out in case law and various legal instruments.
The exemptions in the e-Commerce Directive have a horizontal scope, covering all types of illegal content as well as both civil and criminal liability.