The new EU-wide Online Dispute Resolution platform requires action to be taken by all traders entering into online sales or service contracts with consumers.

A new interactive and multilingual Online Dispute Resolution platform (ODR Platform) has been launched as part of the European Commission’s initiative to encourage cross-border trade and Alternative Dispute Resolution (ADR).

How will the process work?

This initiative, requiring compliance by 9 January 2016 and with the ODR Platform going live on 15 February 2016, aims to allow consumers who have bought a product or service online to submit a complaint in a prescribed form to the ODR Platform.

This facility will seek to connect the consumer and the relevant trader with a recommended ADR provider in order to resolve complaints outside the courtroom with minimal cost and maximum efficiency. The ODR platform will be completely multilingual and the ADR provider selected will handle the complaint or dispute entirely online, seeking to reach an outcome within 90 days.

Who do these regulations apply to?

These regulations apply to any trader who will “intend to enter into online sales contracts or online service contracts with consumers”. Therefore, any online trader who sells goods, services or digital content to consumers through their website within the EU and any market must abide to these obligations.

As an online trader, what obligations must be complied with?

• There is an obligation for an online trader to inform consumers of the existence of the ODR Platform and the possibility to use the facility. This should be included in any standard terms of business of the trader and any emails sent to the consumer offering goods or services should incorporate a link to the ODR Platform.
• An online trader must provide an easily accessible contact email address and link to the ODR Platform on their website.
• A trader must confirm whether or not they are obliged to use an approved ADR provider (for example because of a contract or trade union). If so, the trader must provide this additional information to the consumer.
• The trader must inform the consumer (via a durable medium) if the trader’s internal complaint handling procedure has been exhausted. In this situation, there is an obligation on the trader to inform the consumer: (a) that it cannot settle the complaint; (b) the details of a competent ADR entity; and (c) whether the trader submits to such ADR.

What are the consequences of non-compliance?

Non-compliance to the regulations could result in Trading Standards enforcement and potentially a court order requiring the trader to comply. If the order is not complied with, there is an unlimited maximum penalty fine and potentially two years’ imprisonment.

How effective will these regulations be in practice?

It is important to note that the ODR Platform will only transfer a complaint to an ADR provider if both the consumer and the trader can agree on such an ADR entity to handle their dispute. The ODR Platform will not be able to process the complaint any further if a trader is unwilling to use a recommended ADR provider. Further, the obligations do not oblige traders to use ADR, only to provide notice of the ODR Platform.

See the ODR platform here and the European Commission factsheet here.