In an increasingly interconnected world through technology and online commerce, the European Union has emerged as an attractive destination for entrepreneurs and companies looking to expand their operations in the global market.
However, venturing into the vast and promising European market is not a straightforward task, as it entails compliance with stringent legal regulations, especially concerning data protection and e-commerce.
What important laws govern e-commerce in the EU? What challenges and opportunities lie ahead? MRK International Law will answer these questions and more.
Considering generating online business in the European Union?
If so, you will definitely need the advice of an international business lawyer.
The EU market is highly competitive, with both local and international players vying for customers. Businesses need to develop effective strategies to stand out and compete successfully.
Language barriers, different consumer preferences, and varying business practices across member states can make expansion within the EU challenging.
Expanding an e-commerce business into the European Union offers immense opportunities but also presents several unique challenges. Here’s a deeper look at some of the challenges associated with e-commerce in the EU.
Data Protection Compliance
The European Union began in 2018 and has much stronger privacy protection for data on the Internet than the United States.
The EU General Data Protection Regulation grants users rights over the processing of their personal data, where clear consent is mandatory. If this is not done, companies that violate the regulation are fined up to € 20 million, or 4% of their annual turnover. This is applicable to all companies that manage data in the 28 EU countries, regardless of where they are headquartered.
A look into GDPR
The General Data Protection Regulation is a broad set of rules focused on the protection of personal privacy and the exchange of data across borders. All companies with operations in the European Union and those that do business with their 500 million inhabitants must comply with these regulations.
The GDPR is applied when there is a personal data process, such as when a service provider obtains a customer’s name, email and payment details. In these cases, it is mandatory that the company has a privacy policy where, for example, the name of the person in charge of controlling this data is reported and for what purpose such data is collected.
This forces companies to protect the privacy of their consumers, and in the event that these data are leaked, the fines are extremely expensive.
New Legal Framework for E-Commerce in Europe
The European market is one of the largest in the world. It is always interesting to consider the possibility of conducting business with a market of about half a billion customers, but to start a business in a member state of the European Union, the business must comply not only with the law of the country, but also with European law.
European law is made up of regulations and directives that are applicable in all its member states. Some of these laws are specific to online businesses, especially the Electronic Commerce Directive (Directive 2000/31 / EC) and the GDPR (General data protection regulation, Directive 2016/679).
Also, efficient and reliable delivery is crucial in e-commerce! Setting up logistics and distribution networks that can handle cross-border shipping within the EU can be complex and costly.
About the e-commerce directive
The fundamental component of this directive is that the consumer must be well informed of the operation of the online business in question. The e-commerce directive establishes the obligation to inform the user about the name, address and email of the service provider (apart from other specific information), depending on the type of online business.
VAT and Taxation
EU countries have varying Value Added Tax (VAT) rates and regulations. E-commerce businesses must deal with VAT compliance, including determining the correct VAT rate for each sale and handling VAT reporting. The introduction of new VAT rules for e-commerce in 2021 has added complexity to this area.
Take the big leap with an international lawyer
In short, the EU has laws that apply to all its member countries, and these laws create serious obligations regarding the legal aspects and technical measures that ensure privacy and clear information to the user.
Thus, in order to have an online company operating and generating business within EU countries, the legal advice of an international lawyer is essential to ensure that the business complies with all regulations.
With the potential for substantial fines and legal consequences for non-compliance in the EU, international lawyers play a crucial role in helping businesses identify and mitigate legal risks. We can provide proactive strategies to avoid costly legal disputes and penalties.
We can assist in crafting robust privacy policies, data handling procedures, and compliance strategies to ensure the proper treatment of user data in accordance with the GDPR.
In essence, an international lawyer serves as a vital partner in your journey to establish and operate a successful e-commerce business within the EU.