08 January 2016

EU Regulation on online dispute resolution for consumer disputes effective as of 9 January 2016

On 9 January 2016 the EU Regulation No 524/2013 on consumer Online Dispute Resolution (ODR), dated 21 May 2013, will enter into force. From that date, online retailers are required to insert a link on their websites leading to a platform enabling an online dispute resolution.

The regulation applies directly in all EU Member States. It has to be considered in the light of Directive 2013/11/EU on alternative dispute resolution for consumer disputes, which also deals with Alternative Dispute Resolution (ADR) mechanisms.

The aim of the regulation is to offer a simple, efficient, speedy and low-cost out-of-court solution to B2C and C2B disputes arising from online transactions to promote cross border e- and m-commerce. 

Consumers will no longer be exposed to the burden of having to take legal action in another EU Member State in order to assert their rights for example by claiming for breach of warranty. A reliable and efficient ODR platform will help achieve this goal.

The EU Commission has implemented an ODR platform via http://ec.europa.eu/consumers/odr/. This platform is not yet live but will be operational from 15 February 2016. The platform will also be available to businesses wishing to take legal action against consumers.

The ODR platform will provide an electronic complaint form and information on how to complete it. The respondent party will be informed of a complaint that has been lodged, and the competent ADR entity will then be contacted. All ADR entities must be listed. The ODR platform also offers a free electronic case management tool. All ADR proceedings should be closed within 30 days and, if no solution can be achieved, the ADR entity must inform the complainant of its options for pursuing legal action.

The ODR regulation is specifically focused on online sales or service contracts where the seller or the seller’s intermediary has offered goods or services through a website or by other electronic means and the consumer has ordered those goods or services on that website or by those means. “Other electronic means” includes social networks. The ODR regulation does not apply to other types of contracts.

In practice, this means that:

  • All businesses must provide a link to the ODR platform via their websites from 9 January 2016. The link should be easily accessible for consumers. The relevant website is: http://ec.europa.eu/consumers/odr/
  • The data protection statement, any consents and general terms and conditions must be updated to include sufficient information regarding processing of data in the operation of the ODR platform.
  • Business processes may need to be reviewed and adjusted.

There are still a couple of gaps in the implementation of the ODR platform mechanism and it remains to be seen how it will work in practice, for example, it is not yet clear how agreements composed of both online and offline elements will be treated.

Online retailers should be ready to insert the link to the ODR platform on their websites on time, in order to minimize the risk of being exposed to warning letters or complaints from consumer organisations.

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