European Public Affairs – NEWS, November 2017
Publish Date: 27 November 2017
EU to align consumer rules for online and offline sales of goods
The European Commission seeks to safeguard consistency between the rules governing online sales and those governing in-store sales – as long advocated by ICSC.
The European Commission issued a legislative proposal, in December 2015, aimed to align throughout Europe certain aspects concerning contracts for the online sales of goods. The proposal lays down common rules on the conformity of the goods with the contract, the remedies available to consumers in the event of a lack of conformity and the modalities for the exercise of those remedies. The purpose was to increase consumers’ confidence in buying goods online from retailers located in other EU countries, as well as to decrease the costs incurred by online retailers resulting from differences in contract law.
Typically in two years’ time the legislative process should be already complete and the legislation adopted; however, serious concerns raised by industry representatives such as ICSC and, later on, endorsed by the European Parliament and the Council of the EU (where EU Member States’ governments are represented) have led the Commission to propose an amended proposal on 31 October 2017. The objective pursued with this new proposal is to avoid a legal fragmentation that would result from different regimes for the online and for the face-to-face sales of goods.
The new proposal will be amended by the Parliament and by the Council, before they can enter inter-institutional negotiations, in the course of 2018.
Impact for retail real estate industry
Under the initial proposal, a consumer could have faced a situation where the remedy available – e.g. after buying a coffee maker deemed defective – would have been more advantageous if he/she would have bought this coffee maker online rather than in a physical store. This bears the risk of unfairly distorting competition in favour of e-commerce and putting a break on innovation for those retailers aiming at an omni-channel strategy.
The amended proposal provides with consistent rules that apply to both distance and face-to-face sales. Whereas the 2015 proposal sought to “create a level playing field for all businesses selling at a distance,” the 2017 proposal seeks “to create a level playing field for all businesses selling goods to consumers.” “By laying down uniform rules across sales channels, this Directive should avoid any divergence that would create disproportionate burdens for the growing number of omni-channel retailers in the Union,” reads the new proposal.
The increasing awareness of European legislators on the need for a level playing field between e-commerce and in-store retail in an omni-channel world, follows years of advocacy work on the part of ICSC and its members. The publication of an amended proposal marks a turning point in the Commission’s approach to promoting cross-border e-commerce in Europe, in a way that does not discriminate against physical stores and that reflects the emergence of omni-channel business models.
ICSC will continue to work with the EU institutions and provide them with insights on the way the retail industry is adapting to the digital transformation.
Energy Performance of Buildings Directive (EPBD) – Parliament and Council start inter-institutional negotiations
The first inter-institutional negotiations (i.e. trialogues) between the European Parliament and the Council of the EU, on the EPBD revision, took place on 7 November, in Brussels. This is the last phase of the legislative process, when Council and Parliament seek to agree informally on a final text which balances each institution’s position. Essentially, the institutions’ positions do not differ greatly, so that negotiators expected an inter-institutional agreement rather quickly, probably in December 2017. However, alleged lack of preparation on the Council’s side ahead of the first trialogue meeting makes an agreement in 2017 less likely.
The legislation will introduce requirements for non-residential buildings to deploy recharging points for e-vehicles. However, reflecting ICSC’s recommendations, both the Parliament and the Council found that the requirements as initially proposed by the Commission would be excessively heavy for the real estate and building sectors. We can thus safely assume, already at this stage, that the final legislation will be less burdensome for retail real estate owners than originally suggested by the Commission. Once adopted, EU Member States will have either one or two years (depending on the outcome of the trialogues) to implement the revised EPBD at national level.
EU Finance Ministers eye December deal on modernised VAT rules for e-commerce
EU Finance Ministers fell short of agreeing on a series of measures to improve the Value Added Tax (VAT) environment for e-commerce businesses in the EU, after reservations from Germany emerged over the proposed “one-stop shop.” This would allow firms which sell goods online to pay VAT in their home country, with tax authorities then passing VAT revenues onto the country where the final customer is based. That is a “point of major concern for Germany,” acting Finance Minister Peter Altmaier told his counterparts. The “one-stop shop” would lead to a “substantial shift of responsibilities” that would make “Germany take control for 27 [tax authorities] as a Member State,” he said.
The measures, proposed by the Commission in December 2016, also aim at simplifying VAT rules for start-ups and micro-businesses selling online, as well as removing the current exemption that allows small consignments imported into the EU to be exempt from VAT. Despite Germany’s opposition, the majority of Ministers, meeting on 7 November in Brussels, supported the compromise text tabled at the meeting, calling for a final agreement when Ministers reconvene on 5 December. European negotiations on tax proposals are generally politically sensitive, as they need unanimity among all 28 EU governments before they can become law.
Commission consults on sustainable finance
The Commission has launched a public consultation on how asset managers and institutional investors could include environmental, social and governance factors when taking decisions. The purpose is to help them allocate capital more efficiently by taking into account sustainability risks. The consultation forms part of the Commission's efforts to mobilise private capital towards green and sustainable investments to enable the transition to a low-carbon economy.
The Commission will adopt an action plan on sustainable finance in the first quarter of 2018. The public consultation is open until 28 January 2018 and is available here.
2018 – Commission publishes annual work programme
The Commission endorsed its work programme for 2018, setting its main policy priorities for the coming year, and outlining the upcoming legislative proposals and reviews. The programme sets out a limited number of actions, which will be tabled no later than May 2018. This should give the Parliament and Council enough time to complete work before the European elections of June 2019.
The Commission is working, for instance, on a legislative proposal to ensure that companies active in the digital sector (such as Amazon and Apple) pay taxes where they create value. Taxing the digital economy has become an issue of pressing importance for the Commission, politically and economically. A proposal will be presented in 2018 Q1.