From 1 January 2021, any online UK businesses which target customers within EEA jurisdictions, will need to comply with local laws specific to online commerce.
Currently cross-border operation of online business in the UK and EEA is protected by the EU eCommerce Directive. The Directive allows online businesses to operate anywhere in the EEA (e.g. to provide goods and services via the internet, to recipients right across the EEA) while only requiring the business to comply with the laws of the country in which it is established. A place of establishment means a fixed establishment where the business carries out its economic activities over an indefinite period.
After the end of the Brexit transition period, UK businesses will no longer benefit from this protection. This means that in order to continue offering goods and services online within EEA countries, UK businesses will be required to:
- Comply with local laws applicable to the “coordinated fields”, in every jurisdiction that it operates. The "co-ordinated fields" of legislation cover online information, online advertising, online shopping and online contracting.
- Obtain prior authorisation if operating in certain regulated fields, for example in the financial services sector.
The deadline for making any necessary changes is fast approaching. In order to avoid business disruption, it is important that online businesses take steps to identify any divergences between applicable UK laws and the laws of any EEA countries that it operates in. As an indication, it may be necessary to make changes to the information provided to customers about the goods and services available via a website or platform, or to update customer terms and conditions.
Going forward, it will also be important to keep abreast of new legal developments within all relevant EEA countries.
At Ashfords we have established a network of trusted partner firms within the EEA, which facilitates the sharing of local legal updates. If you need any advice on what changes you may need to make to your online business, please contact Suzie Miles.