ESBA - The Independant Voice for Small Business

NEW CONSUMER RULES WILL DAMAGE ONLINE BUSINESS, SAYS ESBA

Brussels, 16th February 2007

ESBA today voiced the growing concern of its members regarding 'Rome I' - the European Commission's proposal to change the rules governing contractual obligations. It is currently on the agenda in the European Council of Ministers.

In contrast to current arrangements, 'Rome I' implies that the law in the consumer's country of residence only should be applied in all contractual disputes relating to online business. SMEs trading online must therefore be able to conform to 27 EU legal systems.

Commenting on the proposal, ESBA President, Tina Sommer said, 'SMEs simply will not be able to afford the legal advice fees necessary to understand consumer laws in every member state. The costs of compliance will act as a deterrent to e-commerce.'

Indeed, beyond the vast financial burdens, 'Rome I' will limit growth and jobs. According to a survey of UK SMEs by the FSB, an ESBA member, 40% have considered but already been deterred from trading online. This statistic can only get worse.

ESBA considers that the Commission's proposal would force many SMEs to take price and product information offline. This will disadvantage both individuals and small business entrepreneurs, who act as suppliers and consumers of services and goods.

'Far from protecting consumers, the proposal will restrict their choice.' Tina Sommer added. 'Greater price and product transparency has revolutionised shopping for individuals and small businesses alike. This proposal would reverse those gains'

In the apparent absence of a genuine impact assessment at EU level, ESBA is currently carrying out a survey of its members to fully quantify the damaging impact of the proposal on them. It is hoped that this will convince policy makers to 'think small first.'

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Note to the editor:

The European Small Business Alliance (ESBA) is a non-party political European group, which cares for small business entrepreneurs and the self-employed and represents them through targeted EU advocacy activities. ESBA also works towards the development of strong independent advocacy and benefits groups in European countries. ESBA is one of the largest organisations based on free/voluntary membership in Europe. Through its direct membership, associate membership and cooperation agreements, ESBA today represents almost one million small businesses and covers 35 European countries. For more information, please contact: secretariat@esba-europe.org

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Page last updated: 06/03/2007 2:32:57 PM