Optional European Sales Law Receives Strong Backing by the European Parliament

European Commission

MEMO

Strasbourg, 26 February 2014

Optional European Sales Law receives strong backing by the European Parliament

The proposal for an optional European Sales Law for consumers and businesses (IP/11/1175 and MEMO/11/680) was backed today by a majority (416 votes for, 159 against and 65 abstentions) in the European Parliament. An optional EU wide contract law will promote the Digital Single Market by providing a coherent set of rules for the marketing of digital products and related services – if traders and consumers decided to opt for the European Sales Law instead of having to deal with 28 national rules.

"Today’s vote by the European Parliament is very good news for Europe and for the digital Single Market. It's a win-win deal for Small and medium sized businesses and for all consumers in Europe: the European Sales law will cut transaction costs for small businesses while giving Europe’s 507 million consumers greater choice at cheaper prices when shopping across borders," said Vice-President Viviane Reding, the EU’s Justice Commissioner. "My special thanks go to European Parliament rapporteurs Klaus-Heiner Lehne and Luigi Berlinguer for their swift and dedicated work. I would also like to recall that it was Poland which pushed for this new optional instrument under their Presidency in 2011. I now call upon the Council to proceed quickly and put the European Sales law to a vote so we can deliver this important tool and help Europe's small and medium enterprises become big by expanding across borders without additional costs.”

The Commission's proposal will give businesses and consumers the choice of using a single European sales law for their cross-border contracts when offering goods across the European Union. This innovative and subsidiarity-friendly approach leaves national legislation untouched and provides an incentive to develop a high-standard law that is appealing to traders and consumers – because only then will they choose to use it instead of national law.

The optional European Sales Law strikes a balance between allowing small and medium enterprises (SMEs) to market their goods on the basis of one single law across Europe and the need to ensure consumer confidence through a high level of protection standards. Under the Commission proposal, the level of consumer protection is identical or higher than in existing laws, both at EU and national level (see factsheet on Sales Law).

Next Steps: Today’s plenary vote by the European Parliament follows a positive opinion on the initiative from the Legal Affairs (JURI) Committee (MEMO/13/792) limiting the European Sales Law to distance contracts, notably online contracts. To become law the proposed Regulation will now have to be adopted by the Council of Ministers using the "ordinary legislative procedure" (co-decision).

Background

Despite the success of the EU's Single Market, barriers to cross-border trade remain due to differences between contract laws. They make selling abroad complicated and costly. The 28 different sets of national rules can lead to additional transaction costs, a lack of legal certainty for businesses and a lack of consumer confidence. Small and medium-sized enterprises – the backbone of Europe’s economy, representing 99% of all companies in the EU - are particularly affected by higher transaction costs. Currently, businesses wishing to carry out cross-border transactions must adapt to the different national contract laws of the Member States, translate them and hire lawyers, costing an average €10 000 for each additional export market. The Common European Sales Law will allow businesses to sell their goods on the basis of one single law and single IT platform, which will allow considerable cost savings.

Consumers in turn often lack the confidence to take advantage of the full potential of Europe's Digital Single Market or are not given the opportunity to do so. The Common European Sales Law will open up a larger product choice at more competitive prices while ensuring a high level of consumer protection to provide consumers with the confidence they need to boost cross-border online shopping.

On 11 October 2011, the European Commission proposed the optional Common European Sales Law (see IP/11/1175 and MEMO/11/680) to facilitate cross-border trade by offering a single set of rules for cross-border contracts, including strong consumer protection rules in all 27 EU Member States. The idea of an optional sales law already received the support of an overwhelming majority in the European Parliament plenary (521 in favour, 145 against, 8 abstentions) in a vote on an own initiative report from rapporteur Diana Wallis in 2011 (IP/11/683).

In September 2013, the Committee for Legal Affairs (JURI) backed the Common European Sales Law with a large majority (MEMO/13/792), by adopting the report of rapporteurs Klaus-Heiner Lehne and Luigi Berlinguer. This report was the basis for the discussion and vote in the plenary today.

The European Law Institute (ELI), an institute founded by academics and legal practitioners in June 2011 (IP/11/666) and following the model of the American Law Institute, has made a detailed analysis of the optional Common European Sales Law and developed several of its provisions further, which has served as a strong inspiration for the report by the Legal Affairs Committee – and the amendments voted today by the European Parliament's Plenary.