New website obligations for online traders

From 15 February 2016, traders established in the EU that sell or provide goods or services online to consumers must provide a link on their websites to the European Commission's online dispute resolution (ODR) platform. Such traders must also include their email address on their website so that consumers have a first point of contact in the event of a dispute. This obligation is set out in Article 14 of EU Regulation No. 524/2013 (the ODR Regulation) and by virtue of the EU (Online Dispute Resolution for Consumer Disputes) Regulations 2015 (S.I. 500/2015) contravention of Article 14 of the EU ODR Regulation is an offence under Irish law. The obligation applied from 9 January 2016 but the ODR platform will not be fully opened for use by consumers and traders until 15 February 2016.

Article 14 of the ODR Regulation builds on Article 13 of EU Directive No. 2013/11 (the ADR Directive) which obliges Member State to ensure that traders established within the EU inform consumers about an ADR entity which covers the trader where the trader has committed or is obliged to use the ADR entity to resolve disputes with consumers. Article 13 of ADR Directive was implemented in Ireland by Regulation 18 of the EU (Alternative Dispute Resolution for Consumer Disputes) Regulations (S.I. 343/2015). Both the ADR Directive and the ODR Regulation are intended to contribute to consumer protection by providing for simple, efficient, fast and low cost ways of resolving domestic and cross border disputes which arise from sales or services contracts. 

Who are ADR entities?
The Competition and Consumer Protection Commission (CCPC) has responsibility for maintaining a public list of authorised ADR entities in Ireland. The CCPC currently only lists one ADR entity, Netneutrals EU, authorised for the purposes of the ADR Directive and the Irish implementing regulations. Additional entities which satisfy the requirements set out in the EU (Alternative Dispute Resolution for Consumer Disputes) Regulations (S.I. 343/2015) may be added to the list of authorised ADR entities.

The Department of Jobs, Enterprise and Innovation previously notified five Irish ADR bodies to the European Commission which adhered to two European Commission Recommendations (98/257/EC and 2001/310/EC) on quality requirements for ADR bodies including: the Financial Services Ombudsman, the Pensions Ombudsman; the Direct Selling Association of Ireland, the Advertising Standards Authority of Ireland (ASAI) and the Arbitration scheme for tour operators (the Chartered Institute of Arbitrators). If these bodies wish to be ADR entities for the purpose of the ADR Directive and ODR Platform Regulations they will need to be assessed by the CCPC and it is understood that the Financial Services Ombudsman is currently undergoing such an assessment.

What is the purpose of the ODR Platform?
On Saturday, 9 January 2016, the ODR platform was opened to ADR entities to enable them to sign up and familiarise themselves with the platform before it is fully opened for use by consumers and traders on 15 February 2016. The ODR platform will allow consumers, who have a complaint about goods or services they have bought online, to fill out an electronic form free of charge, which is sent to the trader. Once both parties agree on an ADR entity, then the platform will automatically transfer the complaint to that independent third party who will work on reaching an outcome within 90 days. The platform is accessible here. 

The European Consumer Centre Ireland (ECC Ireland) has been designated as the ODR contact point in the State. It will have two dedicated advisors on hand to give assistance to Irish consumers using the ODR platform.

What do online traders need to do to comply?
Article 14(1) of the ODR Regulation requires all traders established in the EU, who engage in online sale or services contracts, and all online marketplaces established within the EU to provide:

  • an electronic link to the ODR platform on their website, which is easily accessible; and
  • their email address on their website.

Article 14 (2) further requires traders established in the EU who engage in online sales or service contracts and are committed or obliged to use an ADR entity to resolve disputes with consumers to provide:

  • an electronic link to the ODR platform in an email, if a commercial offer is made to a consumer via email; and
  • information as to the existence of the ODR platform in the general terms and conditions applicable to online sales and service contracts.

Whilst online traders have a mandatory obligation to include a link to the ODR platform, online traders are only obliged to use an ADR scheme if the online trader themselves have made such a commitment (for example in their terms and conditions) to use the ADR scheme or are otherwise obliged to use an ADR scheme. This latter category may, for example, capture entities regulated by the Consumer Protection Code such as credit institutions and insurance undertakings. Otherwise there is no mandatory obligation to resolve any dispute arising via an ADR scheme. Outside of this, the agreement of both the consumer and the trader to the use of ADR entities or the ODR platform will be required.

Penalties for non-compliance
Traders who breach Article 14 of ODR Regulation will be guilty of an offence and liable on summary conviction to a class A fine up to(€5,000) and/or 12 months' imprisonment. To avoid such penalties, businesses selling or providing goods or services online to consumers should ensure they include a link to the European Commission's ODR platform and state their email address on their websites before 15 February 2016.

For further information please contact Claire Morrissey.

Date published: 2 February 2016