January 14, 2019

The guidance explains that the e-Commerce Directive was introduced to facilitate e-commerce across EEA countries, and remove barriers to trade. To achieve this, the Directive establishes a “Country of Origin principle”, which is a reciprocal arrangement so that any EEA-based information society service should only be subject to relevant laws in the EEA state in which it is established.

The laws in scope of this principle fall in what the Directive calls the “coordinated field”. This refers to legal requirements in individual EEA states that apply to information society services, regardless of whether those requirements are of a general nature or specifically designed for them. The Directive explains that it covers “requirements relating to online activities such as online information, online advertising, online shopping [and] online contracting”.

The guidance says that immediately following the UK’s exit from the EU in a “no deal” scenario, the Government will “minimise disruption by prioritising continuity and stability”. Therefore the UK’s policy approach will continue to align with the provisions contained in the Directive, except in relation to the Country of Origin principle.

Therefore, in a “no deal” scenario, information society services established in the UK will cease to benefit from the Country of Origin principle when operating in EEA states. This means they will be required to adhere to the rules that govern online activities in each EEA state in which they operate, from which they were previously exempt under the Directive.

The Government says that it intends to fully remove the Country of Origin principle from all UK legislation that implements the Directive. As the principle is implemented via various pieces of legislation it will be removed at different points following a “no deal” Brexit when parliamentary time allows.

Removing the principle will bring EEA-based information society services in scope of UK laws from which they were previously exempt.

It also means that the requirement that UK-based information society services adhere to UK law falling within the “coordinated field” when operating in the EEA would be removed. Therefore, UK-based information society services would not have to simultaneously adhere to their UK requirements when providing services in EEA states after exit day. UK legislation would continue to apply to UK-based information society services when providing services to users in the UK.

The Government encourages UK and EEA information society services to check for any compliance issues resulting from the loss of the Directive’s Country of Origin principle. It advises building on existing processes for ensuring compliance with the legal requirements relating to online activities in each individual EEA country.

Organisations should also ensure that they have processes in place for ongoing compliance in the event that individual EEA states change their requirements governing online activities.

The Government also suggests that organisations should determine their online service’s “place of establishment”. This should be considered in relation to each information society service the organisation provides (if it offers more than one).

Finally, the guidance explains that the Directive prevents EEA states from subjecting the taking up and pursuit of the activity of an EEA-based information society service to a “prior authorisation” scheme (e.g. a licensing regime) where that authorisation scheme is specifically and exclusively targeted at information society services. If the UK leaves the EU without a deal, information society services established in the UK may be subjected to any such prior authorisation regimes which are established in EEA states and which operate with respect to “third country” providers. To access the guidance in full, click here.