The Commission presented a report on the application of Directive 2013/11/EU of the European Parliament and of the Council on alternative dispute resolution for consumer disputes (ADR) and Regulation (EU) No 524/2013 of the European Parliament and of the Council on online dispute resolution (ODR) for consumer disputes.

Settling consumer disputes out of court holds considerable potential for consumers, retailers and the administration of justice in general. Directive 2013/11/EU and Regulation (EU) No 524/2013 aim to tap that potential by providing a legislative framework that ensures that consumers have access to high-quality ADR procedures for settling their contractual disputes with traders, including via a multilingual web-based ODR platform.

Application of the legislative framework

Consumer ADR and ODR has become an integral part of the EU’s toolbox for the public and private enforcement of consumer law. Today, EU consumers have access to high-quality ADR procedures across the Union and in virtually all retail sectors, regardless of whether the dispute is domestic or cross-border and whether the purchase was made online or offline.

Pursuant to Regulation (EU) No 524/2013, the Commission launched the ODR platform in January 2016. The platform was opened to the public on 15 February 2016. To date, all Member States, Liechtenstein and Norway have notified a total of 460 ADR entities.

Since its launch, the platform has attracted more than 8.5 million visitors and 120 000 consumer-to-business disputes. About 56% of the disputes are domestic and 44% cross-border. Most disputes are about airlines (13.2%), followed by clothing and footwear (10.9%) and information and communication technology (6.8%). Consumers mostly complained about the delivery of the product or service (23%), followed by non-conformity with the order (15%) and the product being defective or causing damage (12%).

Only in about 2% of cases did the parties agree on an ADR entity and was the platform therefore able to transmit the dispute to an ADR entity. However, in up to 42% of disputes submitted to the platform the parties settled the dispute bilaterally

The high number of visitors and complaints submitted to the platform demonstrate its very satisfactory uptake by consumers.

A potential that is still under-used

About one year after full ADR coverage has been achieved and three-and-a-half years after the launch of the ODR platform, the ADR/ODR framework is underused and has yet to reach its full potential. Three main challenges can be identified that currently limit the framework’s full effectiveness:

(1) ADR awareness and perceptions : ADR awareness has increased among both consumers and retailers, awareness levels are still insufficient in some regions and retail sectors. Overall, ADR awareness is lower in SMEs than in large retailers. Traders sometimes consider ADR entities to represent consumers’ interests and therefore perceive them as biased in favour of the consumer. The situation is compounded by the diversity of the ADR landscapes that feature a large array of ADR models, names and procedures.

(2) Navigating the national ADR landscapes : The diversity of ADR landscapes makes them difficult to navigate for consumers and traders, in particular in the Member States with a large number of certified ADR entities. Overall, there is less clarity about the ADR entity to which consumers and traders can turn when there is more than one ADR entity per retail sector. A specific difficulty in navigating a Member State’s ADR landscape arises when it features ADR entities whose scope is limited to specific aspects of a dispute in a given retail sector – to the effect that the consumer might need to turn to two ADR entities to have his or her issue dealt with fully.

(3) Traders’ participation in ADR procedures : While overall traders’ participation in ADR has slowly, but steadily increased since 2014, currently only one in three retailers is willing to use ADR. In a number of regions and retail sectors, the ADR models currently offered yield only insufficient participation rates for traders.

The workflow on the ODR platform currently only partially reflects demonstrated user needs. The Commission also conducted a targeted ADR/ODR communication campaign aiming to improve traders’ awareness of and engagement on the ODR platform. As a result, the number of traders registered in the platform increased by 54% in 2018 and by another 24% in the first five months of 2019. 80% of platform users are now satisfied with the platform’s functions. However, trader engagement in the process on the platform itself remains very limited.

Emergence of a community of stakeholders

The European legislative framework for consumer ADR and ODR rests on a logic of shared responsibility and cooperation. The diversity of the national ADR landscapes and the exchanges between ADR stakeholders across Member States have created an ‘ADR laboratory’ where ADR models and design options are compared and critically assessed and emerging best practice is identified, shared and increasingly implemented.

Follow-up

The Commission will also further improve the ODR platform, including by making the platform better respond to the needs of its users by providing more targeted information on consumer rights and redress, better directing users to the most appropriate redress tools and better facilitating direct settlements.

The Commission will convene the second Union-wide ADR Assembly in 2020, further promote ADR and ODR in its 2019 communication campaign on consumer law and continue to support the capacity building by ADR entities through grants.

The Commission presented a report on the functioning of the European Online Dispute Resolution platform established under Regulation (EU) No 524/2013 on online dispute resolution for consumer disputes.

The present communication complies with the obligation laid down in Article 21 of the ODR Regulation to report on the functioning of the ODR platform.

In particular, it details:

the steps taken for the establishment of the ODR platform and provides the European Parliament and the Council with an overview of its first year of operation; the actions planned by the Commission to ensure the platform's continued proper functioning and to further enhance its contribution to the development of the Digital Single Market.

As a reminder, the ODR platform was launched in January 2016 and opened to the public on 15 February 2016. Its main aim is to facilitate the online resolution of disputes between consumers and traders over online transactions.

Implementation of the Alternative Dispute Resolution ( ADR ) Directive : the report stressed that Member States' compliance with the legal framework governing ADR/ODR is an essential condition for the functioning and effective operation of the ODR platform. To date, all Member States with the exception of Spain have communicated to the Commission that they have fully implemented the Directive on consumer ADR.

To date a significant number of ADR bodies have been registered on the platform showing that the system is fully operational: currently more than 300 ADR bodies from 26 Member States can be accessed through the platform. Moreover, all 28 Member States have designated their national ODR contact points to assist the users of the platform and inform consumers about their options to obtain redress.

On 1 July 2017, the ADR/ODR legislation became applicable to the EEA/EFTA States (Norway, Iceland and Lichtenstein).

It is important to stress that while there is no obligation for traders to use ADR in respect of individual consumer complaints, online traders are under an obligation to include a link to the ODR platform on their website. However, an analysis of traders' compliance with the obligation to provide an easily accessible link to the platform and their email address on their website shows encouraging results that can however be significantly improved. The results showed a compliance rate of 30% where the ODR link has been found on the web shops of e-commerce traders' established in the EU. The presence of the ODR link differs across countries, sectors and differently-sized web shops. The Commission will liaise with Member States to support them in the coming months to enhance traders' compliance in this regard.

Complaints lodged in its first year of implementation : during the 12 months covered by this report some 1.9 million people visited the platform. On average the website received over 160 000 unique visitors per month, and more than 2 000 complaints were submitted per month on average. These data show that the platform has reached a considerable level of coverage and uptake ; it also illustrates the significant awareness and interest the platform enjoys with EU consumers and business.

More than 24 000 complaints were submitted on the platform in its first year of operation. The most complained about sectors were consumer clothing and footwear (11.5%), airline tickets (8.5%), and information and communication technology goods (8%) which also represent the main e-commerce sectors in the EU. The main reasons why consumers complained were linked to problems with the delivery of the goods (21%), followed by non-conformity with the order (15%) and problems with defective goods (12%). 1/3 of complaints related to a cross-border issue.

Germany and UK , where the proportion of e-shoppers is the highest in EU, are the two countries where most complaints have been lodged and also where most traders concerned are located.

About 44% of the overall number of complaints was solved in successful bilateral negotiation between traders and consumers.

Conclusion : the platform's structural functionality and its impressive reach among consumers in its first year of operation is very positive . The platform's main functions work properly. The Commission will work with national authorities to improve compliance by traders with their obligation to link to the ODR platform on their website. It has also started to take action to encourage traders to cooperate more on the platform including by giving feedback when they solve the issues outside the platform. Communication activities to further promote the ODR platform amongst consumers and traders will be launched in 2017.

PURPOSE : to establish a new system for out-of court on line dispute resolution for consumers.

LEGISLATIVE ACT : Regulation (EU) n° 524/2013 of the European Parliament and of the Council on online dispute resolution for consumer disputes and amending Regulation (EC) No 2006/2004 and Directive 2009/22/EC (Regulation on consumer ODR).

CONTENT : the Regulation aims to provide a European online dispute resolution platform (‘ODR platform’) facilitating the independent, impartial, transparent, effective, fast and fair out-of-court resolution of disputes between consumers and traders online.

The Regulation shall apply to the out-of-court resolution of disputes concerning contractual obligations stemming from online sales or service contracts between a consumer resident in the Union and a trader established in the Union through the intervention of an ADR entity listed in accordance with Directive 2013/11/EU and which involves the use of the ODR platform.

The ODR platform : the ODR plateform shall be a single point of entry for consumers and traders seeking the out-of-court resolution of disputes covered by the Regulation. It shall be an interactive website which can be accessed electronically and free of charge in all the official languages of the institutions of the Union. The ODR platform should be accessible, in particular, through the ‘Your Europe portal’ established in accordance with Decision 2004/387/EC.

The Commission shall develop the ODR platform and be responsible for its operation, including all the translation functions necessary for the purpose of this Regulation, its main­tenance, funding and data security. The development, operation and maintenance of the ODR platform shall ensure that the privacy of its users is respected from the design stage (‘privacy by design’) and that the ODR platform is accessible and usable by all , including vulnerable users (‘design for all’), as far as possible.

La Commission développera la plateforme et sera responsable de son fonctionnement, y compris de toutes les fonctions de traduction nécessaires, ainsi que de sa maintenance, de son financement et de la sécurité des données.

Functions of the platform : the platform shall:

· provide general information regarding the out-of-court resolution of contractual disputes between traders and consumers arising from online sales and service contracts ;

· allow consumers and traders to submit complaints by filling in an electronic complaint form available in all the official languages of the institutions of the Union and to attach relevant documents;

· transmit complaints to an ADR entity competent to deal with the dispute concerned ;

· offer, free of charge, an electronic case management tool which enables ADR entities to conduct the dispute resolution procedure with the parties through the ODR platform.

Testing of the ODR platform : by 9 January 2015, the Commission shall test the technical functionality and user-friendliness of the ODR platform and of the complaint form, including with regard to translation.

Network of ODR contact points : each ODR contact point shall host at least two ODR advisors. The ODR contact points shall provide support to the resolution of disputes by

facilitating communication between the parties and the competent ADR entity, which may include, in particular: (i) assisting with the submission of the complaint and, where appropriate, relevant documentation; (ii) providing the parties and ADR entities with general information on consumer rights and explanations on the procedural rules applied by the ADR entities identified.

Submission of a complaint : the complaint form shall be user-friendly and easily accessible on the ODR platform. A complaint submitted to the ODR platform shall be processed if all the necessary sections of the electronic complaint form have been completed. Upon receipt of a fully completed complaint form, the ODR platform shall, in an easily understandable way and without delay, transmit to the respondent party, in one of the official languages of the institutions of the Union chosen by that party, the complaint together with the certain data, such as:

· information that the parties have to agree on an ADR entity in order for the complaint to be transmitted to it, and that, if no agreement is reached by the parties or no competent ADR entity is identified, the complaint will not be processed further;

· information about the ADR entity or entities which are competent to deal with the complaint, if any are referred to in the electronic complaint form.

Before submitting their complaint to an ADR entity through the ODR platform, consumers should be encouraged by Member States to contact the trader by any appropriate means, with the aim of resolving the dispute amicably.

Consumer information : traders established within the Union engaging in online sales or service contracts shall provide, on their websites, an electronic link to the ODR platform. That link shall be easily accessible for consumers.

Reports : by 9 July 2018 and every three years thereafter the Commission shall submit

a report on the application of the Regulation, including in particular on the user-friendliness of the complaint form and the possible need for adaptation of the information listed in the Annex.

ENTRY INTO FORCE : 08/07/2013.

APPLICATION : from 09/01/2016, à l'exception des certaines dispositions.

DELEGATED ACTS : the Commission shall have the power to adopt delegated acts to adapt the information which a complainant is to provide in the electronic complaint form made available on the ODR platform. The power to adopt delegated acts is conferred for an indeterminate period of time from 8 July 2013 (which may be tacitly extended for for the same periods). The European Parliament or the Council may object to a delegated act within two months of notification of that act (which may be extended by two months). If Parliament or Council or Council express objections, the delegated act shall not enter into force.

The European Parliament adopted by 622 votes to 24 with 32 abstentions, a legislative resolution on the proposal for a regulation of the European Parliament and of the Council on online dispute resolution for consumer disputes (Regulation on Consumer ODR).

Parliament adopted its position in first reading following the ordinary legislative procedure. The amendments adopted in plenary are the result of a compromise negotiated between Parliament and Council. They amend the Commission proposal as follows:

Scope: the new regulation will ensure a high level of consumer protection , and shall apply to the out-of-court resolution of disputes initiated by traders against consumers where the relevant ADR procedures are offered by ADR entities listed in the Directive on alternative dispute resolution (ADR Directive) . Since, in particular, consumers and traders carrying out cross-border online transactions will benefit from the ODR platform, this Regulation should also apply to domestic online transactions in order to allow for a true level playing field in the area of online commerce.

The platform for online dispute resolution (ODR): this should take the form of an interactive user-friendly website offering a single point of entry to consumers in all the official languages of the institutions of the Union free of charge. The Commission shall develop the ODR platform (and be responsible for its operation, including all the translation functions, maintenance, funding and data security. The development, of the ODR platform shall ensure that the privacy of its users is respected from the design stage (‘privacy by design’) and that the ODR platform is accessible and usable by all, including vulnerable users (‘design for all’), as far as possible.

The Commission shall make the ODR platform accessible, as appropriate, through its websites that provide information to citizens and businesses in the Union and, in particular, through the ‘Your Europe portal’.

Functions of the ODR platform : the platform’s functions shall be, amongst other things;

· to inform the respondent party about the complaint;

· to identify the competent ADR entity or entities and transmit the complaint to the ADR entity, which the parties have agreed to use,

· to offer an electronic case management tool free of charge, which enables the parties and the ADR entity to conduct the dispute resolution procedure online through the ODR platform;

· to provide the parties and ADR entity with the translation of information which is necessary for the resolution of the dispute and is exchanged through the ODR platform;

· to provide in an accurate, up to date and clear, understandable and easily accessible way certain information, for example: (i) general information regarding ODR; (ii) the competent ADR entity or entities; (iii) an online guide about how to submit complaints through the ODR platform; (iv) information, including contact details, on ODR contact points designated by the Member States; (v) statistical data on the outcome of the disputes which were transmitted to ADR entities through the ODR platform.

Testing of the ODR platform : at the latest 18 months after entry into force of the regulation, the Commission will test the technical functionality and user-friendliness of the ODR platform and of the complaint form, including with regard to translation.

Network of ODR contact points: each ODR contact point shall host at least two ODR advisors . The ODR contact points shall provide support by fulfilling the following functions:

· facilitating communication between the parties and the competent ADR entity, which may include, in particular: (i) assisting with the submission of the complaint and, where appropriate, relevant documentation; (ii) providing the parties and ADR entities with general information on consumer rights and explanations on the procedural rules applied by the ADR entities identified;

· submitting, based on the practical experience gained from the performance of their functions, every two years an activity report to the Commission and to the Member States.

Submission of a complaint : the complaint form shall be user-friendly and easily accessible on the ODR platform. If the complaint form has not been fully completed, the complainant party shall be informed that the complaint cannot be processed further, unless the missing information is provided.

Upon receipt of a fully completed complaint form, the ODR platform shall, in an easily understandable way and without delay, transmit to the respondent party, in one of the official languages of the institutions of the Union chosen by that party , the complaint together with certain data, for example:

· information that the parties have to agree on an ADR entity in order for the complaint to be transmitted to it, and that, if no agreement is reached by the parties or no competent ADR entity is identified, the complaint will not be processed further;

· information about the ADR entity or entities which are competent to deal with the complaint, if any are referred to in the electronic complaint form.

Before submitting their complaint to an ADR entity through the ODR platform, consumers should be encouraged by Member States to contact the trader by any appropriate means, with the aim of resolving the dispute amicably .

An ADR entity that has agreed to deal with a dispute shall not require the physical presence of the parties or their representatives, unless its procedural rules provide for that possibility and the parties agree.

Consumer information : traders established within the Union engaging in online sales or service contracts, and online marketplaces established within the Union, shall provide on their websites an electronic link to the ODR platform. That link shall be easily accessible for consumers. Traders established within the Union engaging in online sales or service contracts shall also state their e-mail addresses.

Member States shall encourage consumer associations and business associations to provide an electronic link to the ODR platform.

The Committee on Internal Market and Consumer Protection adopted the report by Róża Gräfin von THUN UND HOHENSTEIN (EPP, PL) on the proposal for a Regulation of the European Parliament and of the Council on online dispute resolution for consumer disputes (Regulation on consumer ODR).

The parliamentary committee recommends that the position of the European Parliament adopted at first reading under the ordinary legislative procedure should be to amend the Commission’s proposal as follows:

European online dispute resolution (ODR) platform: this should also facilitate the independent out-of-court resolution of disputes between consumers and traders online.

Scope of the Regulation: the Regulation should apply to the out-of-court resolution of disputes concerning contractual obligations between consumers resident in the Union and traders established in the Union stemming from the online sale of goods or provision of services, which are covered by the Directive on consumer alternative dispute resolution (ADR) . Members propose that the Regulation also applies to domestic online transactions in order to allow for a true level playing field in the area of electronic commerce .

Access to the platform: Member call for the ODR platform to be accessed only through the ' Your Europe ' portal thematic website, as this portal is an existing single point of entry for both consumers and traders looking for help or information about their rights under Union legislation. The ODR platform should be given prominence on the 'Your Europe' portal.

Functions of the platform: the ODR platform should provide general information regarding the out-of-court settlement of contractual disputes between traders and consumers arising from the online sale of goods or provision of services. Among other things, it would:

inform the the trader about the complaint submitted against him; identify one or more ADR entities which are competent to deal with the dispute, and provide information to the parties on the costs of their procedure , the average length of the procedure and the binding or non-binding nature of its outcome; if no competent ADR entity can be identified, inform the complainant party that it was not possible to identify a competent ADR entity; invite the parties to agree on the competent ADR entity to use to settle their dispute or, if more than one ADR entity has been identified, invite them to agree on one of the competent ADR entities; offer, free of charge, an electronic case management tool which enables the parties and the ADR entity to conduct the dispute resolution procedure online via the platform; provide the parties and the ADR entity with an electronic translation function; provide information in a clear and unambiguous manner.

The ODR platform should provide an online guide for those seeking assistance in completing electronic claim forms. The platform shall also offer the complainant party the services of a contact point in completing his electronic claim form should he/she so desire.

Data protection: the development, operation, user-friendliness and maintenance of the platform should respect the principles of ‘ privacy by design ’ (respect for privacy from the design stage) and, as far as possible of ‘design for all’ (useable by all, including the vulnerable, without the need for any particular adjustment).

The Commission shall provide parties to an ADR procedure with a guide containing clear and specific information regarding the treatment of their personal data by the ODR platform. ADR entities shall be subject to rules of professional secrecy or other equivalent duties of confidentiality laid down in the legislation of the Member State where they are based.

Network of ODR facilitators: Members recommend that a more important role should be accorded to ODR contact points. The latter should, on request of parties, assist and facilitate their communication with the ADR entity. They should, in particular:

assist with the submission of the complaint and, where appropriate, relevant documentation, provide the parties and ADR entities with general information on consumer rights in relation to the sale of goods or the provision of services which apply in the Member State of the contact point which hosts the contact points concerned; provide the parties with explanations on the rules of procedure applied by the ADR entities identified; inform the complainant party of other means of redress when a dispute cannot be resolved via the ODR platform.

The Commission, in cooperation with Member States, should provide appropriate training for contact points for consumer disputes in order for these to acquire the necessary expertise to perform their duties.

Deadlines: Members propose that upon receipt of a fully completed complaint form, the ODR platform should in an easily understandable way and without delay transmit to the respondent party in the language of the contract or website, the required information. Where the parties fail to reply to the platform or to agree on one competent ADR entity within 20 days , the complaint shall not be processed further.

An amendment provides for the extension of the time period for dispute resolution is extended to 90 days , in line with the provisions of the ADR Directive (the Commission proposes a time period of 30 days from the introduction of the complaint).

Implementing and delegated acts: to ensure that the European Parliament fulfils its role of oversight for the benefit of consumers, it is proposed that the implementing powers requested by the Commission in relation to (i) the functions of the platform, (ii) the modalities of cooperation between ODR facilitators, and (iii) the modalities of the electronic complaint form are replaced by delegated acts.

The Council agreed on a general approach concerning a draft directive on Alternative Dispute Resolution (ADR) and a draft regulation on On-line Dispute Resolution (ODR), pending the opinion of the European Parliament.

The objective of both proposals is to provide for simple, fast and affordable out-of-court settlement procedures designed to resolve disputes between consumers and traders arising from the sales of goods and services.

The initiative will ensure the establishment of ADR schemes where none exist today and define a common framework for ADR in the EU Member States by setting out common minimum quality principles in order to ensure that all ADR entities are impartial, transparent and efficient.

Existing national ADR schemes should be able to continue to operate within the new framework. The ADR system will be supplemented by an ODR mechanism involving the setting up of a European on-line dispute resolution platform (this will be an interactive website accessible electronically and free of charge in all languages of the Union).

Opinion of the European Data Protection Supervisor on the legislative proposals on alternative and online dispute resolution for consumer disputes.

On 6 December 2011, the EDPS received the proposals for alternative dispute resolution for consumer disputes (ADR) and online dispute resolution for consumer disputes (ODR) for consultation.

This Opinion aims at analysing the provisions on processing of personal data in the proposals.

It will focus on the ODR proposal, as it involves a centralised processing of personal data related to disputes through an online platform.

The EDPS welcomes the fact that data protection principles have been integrated in the text, in particular as regards the purpose and access limitation, the limitation of the retention period and the security measures. However, he recommends:

-clarifying the responsibilities of the controllers and informing data subjects accordingly: the legislative part of the ODR proposal should specify at least to which of the controllers data subjects should address their requests of access, rectification, blocking and erasure; and which controller would be accountable in case of specific breaches of the data protection legislation (for example, for security breaches). Data subjects should also be informed accordingly;

-clarifying the limitation of access rights : the EDPS welcomes these limitations of the purpose and the access rights. However, it is not clear whether all ODR facilitators (at least 54) will have access to personal data related to all the disputes. He recommends clarifying that every ODR facilitator will have access only to the data needed to fulfil his or her obligations under the Regulation;

-complementing the provisions on security : the EDPS recommends adding also a reference to the need to conduct a privacy impact assessment (including a risk assessment) and to the fact that compliance with data protection legislation and data security should be periodically audited and reported. Furthermore, he recalls that the development of IT tools for the establishment of the ODR platform should integrate privacy and data protection from the very early design stage (privacy by design), including the implementation of tools enabling users to better protect personal data (such as authentication and encryption) ;

-mentioning the need to consult the EDPS on delegated and implementing acts related to the processing of personal data.

The EDPS would also like to stress that the processing of personal data in the framework of the ODR platform may be subject to prior checking by the EDPS and by national data protection authorities.

The Council took note of two legislative proposals submitted by the Commission on 29 November 2011: a draft directive on Alternative Dispute Resolution (ADR) and a draft regulation on On-line Dispute Resolution (ODR).

In compliance with the ADR directive, the Commission also proposes an ODR mechanism involving the setting up of a European on-line dispute resolution platform (this will be an interactive website accessible electronically and free of charge in all languages of the Union).

ADR schemes, also known as "out-of-court mechanisms ", have been set up across Europe to help citizens engaged in the resolution of disputes which they have been unable to resolve directly with the trader. These mechanisms have been developed differently across the EU, either publicly or privately, and the status of the decisions adopted by these bodies differs greatly from one Member State to another.

The Commission conducted a public consultation on this subject from18 January and 15 March 2011.

In addition, the Council adopted conclusion on the results of the first Single Market Forum (SIMFO), which took place in Krakow, Poland, on 3 and 4 October 2011. The SIMFO, which was organised jointly by the European Parliament, the Commission and the Polish presidency, is intended to be the starting point of a permanent platform for debate among EU institutions, stakeholders and citizens on the development of the internal market.

In its conclusions, the Council:

· attaches great importance to ensuring that European businesses and consumers purchasing goods and services (online, offline, cross-border or domestically) have access to efficient, affordable and simple means of resolving their disputes with traders, taking into account diversity of different national Alternative Dispute Resolution schemes;

· believes that it is essential to increase businesses' and citizens' knowledge and understanding of Alternative Dispute Resolution schemes throughout Europe;

· stresses that simple, efficient and affordable Online Dispute Resolution systems allowing consumers to solve effectively their problems when shopping on-line are crucial for improving confidence in the digital Single Market.

PURPOSE : to contribute to the functioning of the internal market, and in particular its digital dimension, and to the achievement of a high level of consumer protection by providing a platform facilitating the impartial, transparent, effective and fair out-of-court resolution of disputes between consumers and traders online.

PROPOSED ACT: Regulation of the European Parliament and of the Council.

BACKGROUND: with the development of e-commerce, the scope and size of markets in which businesses and consumers operate have grown significantly and extend beyond national borders. The lack of effective redress for complaints resulting from cross-border online transactions has adverse consequences both for consumers and businesses. Consumers as well as traders, however, perceive it as risky to engage in cross-border e-commerce transactions because they fear that relevant disputes might not easily be resolved due to the virtual character of the transaction.

The Europe 2020 flagship initiative "Digital Agenda for Europe" announced an EU strategy to improve ADR systems. The 2011 Single Market Act included amongst its key priorities the establishment of simple, fast and affordable out-of-court settlement procedures for consumers and protecting relations between businesses and their customers. This action will also include an electronic commerce dimension.

At present, the offer of ADR schemes to resolve consumer disputes related to e-commerce transactions is scattered and incomplete . In addition, while half the existing ADR schemes offer consumers the possibility of submitting their complaint online, very few offer consumers the possibility of conducting the entire procedure online (via online dispute resolution – ODR). Handling the entire process online would produce time savings and ease communication between the parties.

IMPACT ASSESSMENT: the Commission has carried out a detailed impact assessment, analysing a range of policy options for (i) Alternative Dispute Resolution (ADR) coverage, information and quality and (ii) Online Dispute Resolution (ODR) for cross-border e-commerce transactions.

The IA concluded that only a combination of two instruments on ADR and ODR can ensure access to impartial, transparent and effective means to resolve consumer disputes linked to cross-border e-commerce transactions out-of-court.

LEGAL BASIS: Article 114 TFEU.

CONTENT: the proposed Regulation aims at establishing an EU-wide ODR system that will facilitate the resolution of disputes related to the cross-border online sale of goods or provision of services between a trader and a consumer.

The main points of the proposal are as follows:

ODR platform : the proposal aims at establishing a European online dispute resolution platform ("ODR platform"). This ODR platform takes the form of an interactive website which offers a single point of entry to consumers and traders who seek to resolve out-of-court a dispute which has arisen from a cross-border e-commerce transaction. The platform can be accessed in all official languages of the EU and its use is free of charge. ADR schemes established in the Member States, which have been notified to the Commission in accordance with the Directive on consumer ADR, will be registered electronically with the ODR platform.

Consumers and traders will be able to submit their complaints through an electronic complaint form which will be available on the platform’s website in all official languages of the EU. The platform will check if a complaint can be processed and seek the agreement of the parties to transmit it to the ADR scheme that is competent to deal with the dispute. The competent ADR scheme will seek the resolution of the dispute in accordance with its own rules of procedure within 30 days from the date of receipt of the complaint. The ADR scheme will have to notify to the platform some data in relation to the development of the dispute (date when the complaint was notified to the parties; date when the dispute was resolved; outcome of the dispute).

Under the proposal, a network of online dispute resolution facilitators ("ODR facilitators' network") will provide support to the resolution of disputes submitted via the ODR platform.

Information on the EU-wide ODR system : traders established within the EU that engage in cross-border e- commerce to inform consumers about the ODR platform. This information shall be made easily, directly, prominently and permanently accessible on the traders' websites as well as when the consumer submit a complaint to the trader.

Monitoring: an annual activity report will be drawn up on the operation of the platform. The compliance by ADR schemes with the obligations set out in the Regulation will be monitored by the competent authorities to be established in the Member States in accordance with the Directive on consumer ADR. Every three years the Commission will report to the European Parliament and the Council on the application of the Regulation.

Data Protection rules: the data entered in the ODR platform by the parties and the ADR schemes will be stored in a database and will be subject to the relevant legislation on data protection.

BUDGETRY IMPLICATIONS: this action is part of the Consumer programme 2014-2020 . The budgetary impact will be addressed by redeployment for the years 2012 and 2013. The financial appropriations for implementing this proposal from 2012 to 2020 will amount to EUR 4,586 million in current prices .

DELEGATED ACTS: the proposal contains provisions empowering the Commission to adopt delegated acts in accordance with Article 290 of the Treaty on the Functioning of the EU.

PURPOSE : to contribute to the functioning of the internal market, and in particular its digital dimension, and to the achievement of a high level of consumer protection by providing a platform facilitating the impartial, transparent, effective and fair out-of-court resolution of disputes between consumers and traders online.

PROPOSED ACT: Regulation of the European Parliament and of the Council.

BACKGROUND: with the development of e-commerce, the scope and size of markets in which businesses and consumers operate have grown significantly and extend beyond national borders. The lack of effective redress for complaints resulting from cross-border online transactions has adverse consequences both for consumers and businesses. Consumers as well as traders, however, perceive it as risky to engage in cross-border e-commerce transactions because they fear that relevant disputes might not easily be resolved due to the virtual character of the transaction.

The Europe 2020 flagship initiative "Digital Agenda for Europe" announced an EU strategy to improve ADR systems. The 2011 Single Market Act included amongst its key priorities the establishment of simple, fast and affordable out-of-court settlement procedures for consumers and protecting relations between businesses and their customers. This action will also include an electronic commerce dimension.

At present, the offer of ADR schemes to resolve consumer disputes related to e-commerce transactions is scattered and incomplete . In addition, while half the existing ADR schemes offer consumers the possibility of submitting their complaint online, very few offer consumers the possibility of conducting the entire procedure online (via online dispute resolution – ODR). Handling the entire process online would produce time savings and ease communication between the parties.

IMPACT ASSESSMENT: the Commission has carried out a detailed impact assessment, analysing a range of policy options for (i) Alternative Dispute Resolution (ADR) coverage, information and quality and (ii) Online Dispute Resolution (ODR) for cross-border e-commerce transactions.

The IA concluded that only a combination of two instruments on ADR and ODR can ensure access to impartial, transparent and effective means to resolve consumer disputes linked to cross-border e-commerce transactions out-of-court.

LEGAL BASIS: Article 114 TFEU.

CONTENT: the proposed Regulation aims at establishing an EU-wide ODR system that will facilitate the resolution of disputes related to the cross-border online sale of goods or provision of services between a trader and a consumer.

The main points of the proposal are as follows:

ODR platform : the proposal aims at establishing a European online dispute resolution platform ("ODR platform"). This ODR platform takes the form of an interactive website which offers a single point of entry to consumers and traders who seek to resolve out-of-court a dispute which has arisen from a cross-border e-commerce transaction. The platform can be accessed in all official languages of the EU and its use is free of charge. ADR schemes established in the Member States, which have been notified to the Commission in accordance with the Directive on consumer ADR, will be registered electronically with the ODR platform.

Consumers and traders will be able to submit their complaints through an electronic complaint form which will be available on the platform’s website in all official languages of the EU. The platform will check if a complaint can be processed and seek the agreement of the parties to transmit it to the ADR scheme that is competent to deal with the dispute. The competent ADR scheme will seek the resolution of the dispute in accordance with its own rules of procedure within 30 days from the date of receipt of the complaint. The ADR scheme will have to notify to the platform some data in relation to the development of the dispute (date when the complaint was notified to the parties; date when the dispute was resolved; outcome of the dispute).

Under the proposal, a network of online dispute resolution facilitators ("ODR facilitators' network") will provide support to the resolution of disputes submitted via the ODR platform.

Information on the EU-wide ODR system : traders established within the EU that engage in cross-border e- commerce to inform consumers about the ODR platform. This information shall be made easily, directly, prominently and permanently accessible on the traders' websites as well as when the consumer submit a complaint to the trader.

Monitoring: an annual activity report will be drawn up on the operation of the platform. The compliance by ADR schemes with the obligations set out in the Regulation will be monitored by the competent authorities to be established in the Member States in accordance with the Directive on consumer ADR. Every three years the Commission will report to the European Parliament and the Council on the application of the Regulation.

Data Protection rules: the data entered in the ODR platform by the parties and the ADR schemes will be stored in a database and will be subject to the relevant legislation on data protection.

BUDGETRY IMPLICATIONS: this action is part of the Consumer programme 2014-2020 . The budgetary impact will be addressed by redeployment for the years 2012 and 2013. The financial appropriations for implementing this proposal from 2012 to 2020 will amount to EUR 4,586 million in current prices .

DELEGATED ACTS: the proposal contains provisions empowering the Commission to adopt delegated acts in accordance with Article 290 of the Treaty on the Functioning of the EU.