Hi, this is our series on how to lawfully run a business. Today, you will learn how to avoid breaking EU law as e-commerce business.

The 5 typical ways how e-commerce businesses break European Union law are:

  1. No representative for the EU

  2. Not providing consumers with their rights

  3. No adequate personal data protection

  4. User discrimination, including geo-blocking

  5. Not complying with tax and customs regulations

How to avoid them? Let’s find out!

When do I need an EU representative?

If you run business outside the EU, but target natural persons in the EU and do not process their data occassionally, most likely you need to hire a GDPR representative. This can be a lawyer or any other person who can be trusted. You need to establish representative in writing in one of EU member states where the data subjects, whose personal data you process, are.

How to comply with consumer laws?

EU law sets our many consumer law requirements that are safeguarded by supervisory authorities and possible fines. The key consumer rights include:

  • truthful advertising,
  • a minimum 2-year guarantee as a protection against faulty goods, or goods that don’t look or work as advertised,
  • fair contract terms written in plain, understantable language,
  • right to return most products bought remotely within 14 days for a full refund.

Make sure to provide terms and conditions that meet EU consumer rights plus possible national law requirements.

How to ensure adequate data protection?

EU’s general data protection regulation (GDPR) applies to all entities that target natural persons in the EU. So if your services are designed for EU market, you must implement EU’s privacy laws, not just have some privacy policy and consent forms. In short, data must be processed on valid legal basis, with adequate security and transparency. Data subjects enjoy many rights, including right to be forgotten.

When does user discrimination break EU law?

All EU consumers must be treated equally. According to European Commission data, over 63% websites do not let shoppers buy from another EU country. In general, if you make a service or product available to the public at large, you should not discriminate clients basing on nationality, place of residence or place of establishment. If you provide different conditions for access, these should be directly justified by objective criteria, such as technical limitations or specific legal requirements.

How to comply with EU tax and customs regulations?

If you ignore customs and tax requirements, sooner or later you will be in trouble and get complaints from customers. If you are unable to prove lawfulness of your transaction, best case scenario, you will get negative comments from those who can’t get proper invoices.

The easiest way to comply with tax and customs requirements hire an accountant in the EU state you registered your business or representative. Starting from January 2021, e-commerce businesses will be able to use VAT One Stop Shop, including the Import One Stop Shop, and for the VAT One Stop Shop return. Also, consulting a tax lawyer can save you a lot of money in the long run.

What were other legal requirements you had trouble with? Leave a message & let us know your questions.