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E-commerce directive background

The Electronic Commerce (EC Directive) Regulations 2002 (SI 2002 No. 2013) (“ECR”) came into force on 21 August 2002 (regulation 16 on 23 October 2002). The regulations implement the EU Directive on electronic commerce (Directive 2000/31/EC of the European Parliament and of the Council of 8 June 2000 on certain legal aspects of information society services, in particular electronic commerce, in the Internal Market) (“the E-commerce Directive”).

Among the reasons cited by the E-commerce Directive for its enactment are:

* The development of electronic commerce within the information society offers significant employment opportunities in the Community, particularly in small and medium-sized enterprises, and will stimulate economic growth and investment in innovation by European companies, and can also enhance the competitiveness of European industry, provided that everyone has access to the Internet

* Community law and the characteristics of the Community legal order are a vital asset to enable European citizens and operators to take full advantage, without consideration of borders, of the opportunities afforded by electronic commerce; this Directive therefore has the purpose of ensuring a high level of Community legal integration in order to establish a real area without internal borders for information society services

* The development of information society services within the Community is hampered by a number of legal obstacles to the proper functioning of the internal market which make less attractive the exercise of the freedom of establishment and the freedom to provide services; these obstacles arise from divergences in legislation and from the legal uncertainty as to which national rules apply to such services; in the absence of coordination and adjustment of legislation in the relevant areas, obstacles might be justified in the light of the case-law of the Court of Justice of the European Communities; legal uncertainty exists with regard to the extent to which Member States may control services originating from another Member State.

The E-commerce Directive includes an “Internal Market” clause so that if a service provider established in one member state of the <EEA> provides an information society service in another member state, the provider needs to comply with laws relating to the take up and provision of information services in its home state but not those of other member states. The member state in which the information society service is received cannot restrict incoming services.

Certain fields are excluded from the internal market rule such as intellectual property rights, electronic money, real estate transfers and unsolicited commercial communications [such as “spam” email].

A member state may derogate from the internal market rule and require service providers established in other member states to comply with its national laws, subject to certain conditions, where necessary for reasons of:

* public policy , in particular protection of minors and incitement to hatred on grounds of race, sex, religion or nationality, and violations of human dignity

* protection of public health

* public security, national security and defence

* protection of consumers including investors

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