Protection of the e-consumer in Europe
There was a time when marketing consisted of hanging out one's shingle and word of mouth. The Internet has brought marketing to new dimensions. By setting up a Web site, you can gain access to potential customers from all over the world. I wouldn't be a lawyer, however, if I only talked about the upside. Even in cyberspace, certain time-honored rules, like there's no such thing as a free lunch, are as valid as ever. Phenomenal opportunities to make sales to consumers in far-flung places can lead to sticky problems for the unwise vendor.
The Internet's ability to transcend national borders has generated a lot of discussion in legal circles. One of the foundations of traditional basic international commercial principles is a premise that sales take place physically in a certain territory between parties that realized where the sale was occurring. With the advent of e-commerce, national boundaries are far less relevant to business transactions. A contract for the sales of goods can be concluded over the Internet between two persons that have never met and may not have any good reason to meet, much less deal with trifling matters such as finding out the nationality and country of residence of the other.
This laissez-faire attitude may be for the most part an acceptable way of doing business between companies: Of course, I would encourage you to consult your lawyer to make sure that you have appropriate agreements in place, particularly when engaging in e-commerce. However, the law in various countries takes a paternalistic attitude toward consumers. To the extent that you are making direct sales to consumers, you may be running the risk of being hauled into court in some foreign country.
Various lawmakers and interpreters in different parts of the world have been looking into the question of the ability of consumers to enforce their rights under consumer protection laws in e-commerce transactions. For example, let's say that a consumer residing in Germany orders widgets online based on an offer expressed in German marks and posted on the German-language Web site of a Spanish company. After paying for and receiving the widgets, the German consumer discovers that they are defective. The Spanish company refuses to do anything. What can the German consumer do? Does he need to plan his summer vacation in Madrid, instead of on Mallorca, to sue the Spanish company?
In December, the council of the European Union (EU) adopted a regulation with the sweeping title of "On jurisdiction and the recognition and enforcement of judgments in civil and commercial matters." Among other things, this regulation establishes the principle that vendors (including e-commerce vendors) that "direct" their "commercial or professional activities" to a member state in which a consumer resides open themselves up to jurisdiction in that member state. In other words, referring to my earlier example above, the German consumer most likely would have a choice of whether to sue the Spanish company in Germany or Spain. Maintaining a German-language Web site and quoting prices in German marks may be good indications that the Spanish company is actively seeking customers in Germany.
This is not a matter of black hat vs. white hat, but rather a matter of looking at whether a company is taking an active approach to seeking business in a particular country. Reversing this example, let's say that the Spanish company sends high-quality widgets, but the German consumer just doesn't pay. The Spanish company, in general, will need to sue the German consumer in Germany as it chose to seek German customers.
Of course, no law is complete without a few exceptions to the general principles. As examples, the regulation would allow the German consumer and Spanish company to agree that in addition to jurisdiction in Spain and Germany, the German consumer could also bring suit against the Spanish company in another country, for example, Greece. I'm not quite sure how often companies will take advantage of this particular exception, but I suppose that it serves as an extension of the logic behind this provision. Additionally, once a dispute has arisen, both parties have the right to agree that they want to resolve it someplace else. Why spend the winter litigating matters in Germany when you could go to Florida? Finally, if both parties "habitually reside" or were "domiciled" in the same EU country at the time they entered into the agreement, under certain conditions, that country's courts could have jurisdiction.
Polish law has not yet addressed this issue specifically, but, as usually occurs, it is most likely just a matter of time before this EU doctrine will be incorporated into Polish law. Currently, general principles of Polish civil procedure law provide that the proper venue for a dispute in a civil matter (such as a claim under a contract) is the court having jurisdiction over the place of residence/business of the defendant. In other words, a consumer in Bialystok suing a Szczecin-based business on a contractual matter would need to travel to the other side of Poland to bring suit in Szczecin. However, across Poland may be as far as consumers need to travel. Under the new consumer protection law that was enacted last year (the Act on Protection of Certain Consumer Rights and Responsibility for Damages Caused by a Dangerous Product), agreements with consumers may not contain clauses that would purport to exclude the jurisdiction of Polish courts or require consumers to agree to dispute resolution by domestic or foreign arbitration court or a court that would not otherwise have jurisdiction over the matter.
Judith Y. Gliniecki is of counsel with and the head of the technology group at Hunton & Williams' Warsaw office.
