The eCommerce Directive and the UK

Guide

Last updated 19 January 2021

The eCommerce Directive no longer applies to the UK now that the transition period is over. If you are a provider of online services, you should take steps in response to these changes.

What has changed

Rules relating to online activities in European Economic Area (EEA) countries may newly apply to UK online service providers who operate in the EEA now that the transition period is over.

The eCommerce Directive allows EEA online service providers to operate in any EEA country, while only following relevant rules in the country in which they are established. This framework no longer applies to UK providers as the UK has left the EEA and the transition period is over.

You should consider whether your services were previously in scope of the Directive, and if so, ensure that you are compliant with relevant requirements in each EEA country you operate in.

Depending on the nature of your online services you may already comply with these requirements. This could mean that there are little or no immediate changes you need to make to be compliant.

You may also wish to seek legal advice.

The government intends to fully remove the eCommerce Directive’s Country of Origin principle from UK legislation, to bring EEA online service providers in scope of UK laws, which they were previously exempt from. As this principle is found in a number of pieces of legislation it will be removed at different points, when Parliamentary time allows.

1. Check whether you are in scope

The eCommerce Directive applies to ‘information society services’. These are defined as any service that is normally provided:

  • for payment, including indirect payment such as advertising revenue

  • ‘at a distance’ (where customers can use the service without the provider being present)

  • by electronic means, and

  • at the individual request of a recipient of the service

This covers the vast majority of online service providers, for example online retailers, video sharing sites, search tools, social media platforms and internet service providers.

2. Check where your service is based

The Directive refers to this as your ‘place of establishment’, and is the fixed establishment where you pursue your economic activity for an indefinite period of time. See paragraph (19) of the recitals to the Directive for further guidance.

3. Check for new legal requirements

If you are established in the UK, you should check for any legal requirements in any EEA countries you operate in. The rules that you may need to start following are those that fall within the Directive’s ‘coordinated field’. This covers legal requirements in individual EEA states which apply to information society services, for example, rules relating to:

  • online information

  • online advertising

  • online shopping

  • online contracting

UK online service providers may also become subject to ‘prior authorisation’ schemes, such as licensing requirements, in EEA countries where they operate.

The Directive does not cover:

  • tax

  • questions about agreements or practices governed by cartel law

  • certain gambling activities

  • personal data covered by the GDPR and e-Privacy Directive

  • legal requirements relating to goods such as safety standards, labelling obligations or liability for goods

  • requirements relating to delivering or transporting goods.

4. More steps you can take

It is also recommend that you:

  • ensure that you have processes in place for ongoing compliance if individual EEA states change their requirements governing online activities

  • consider legal or other professional advice

You risk non-compliance if you do not follow relevant rules relating to online services in EEA countries you operate in.

Other provisions in the eCommerce Directive

The eCommerce Directive also contains provisions relating to intermediary liability and prohibitions against imposing general monitoring obligations.

The government is committed to upholding the liability protections now that the transition period has ended. For companies that host user-generated content on their online services, there will continue to be a ‘notice and take down’ regime where the platform must remove illegal content that they become aware of or risk incurring liability.

The government also intends to introduce a new Online Safety regulatory framework. This will require companies to take action to keep their users safe, including with regard to illegal content. Details on what this will mean for companies are set out in the Online Harms White Paper: Full government response to the consultation, and the government plans to introduce legislation to Parliament this year.

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