Small businesses fight changes to EU Directive

Proposed amendments to the EU Consumer Rights Directive could have a significant impact on UK businesses if approved—and will see some companies forced out of business, say its critics. The Directive, which is currently being considered by the EU Parliament Internal Market and Consumer Protection Committee, could come into effect as early as 1st January 2013. It proposes that web-based retailers should sell their wares into every country in the EU. Further, businesses are obliged to cover the cost of postage if a customer returns goods worth more than €40 (approximately £35) within two weeks of purchase date.

Tamebay, a community of eBay and Amazon sellers, is fiercely opposed to the changes. In a post on its website, Tamebay’s cofounder Chris Dawson writes, “The EU want to take away the right to choose which territories you are willing to supply to. The draft regulations insist that consumers from the entire EU have the right to purchase from you and you have to ship to them if possible, regardless of where in the EU they are based.” Dawson also argues that “arranging courier contracts to recover goods from any of the 27 EU countries at a reasonable price will be beyond the resources of most businesses.”

To put a figure on the costs, industry body IMRG estimates the move could rack up an additional €10 billion per year in delivery charges. The organisation’s chief executive James Roper said in a statement that these amendments are “some of the most disastrous for the online industry yet”. They would “inevitably lead to significant price increases being forced onto already hard-pressed consumers, pushing up prices across all retail channels, and disadvantaging small and midsize enterprises to the point where many would be forced to cease trading online altogether.”

The Forum of Private Business has joined the fight in urging the EU to abandon the proposals, calling them ill-advised, “being obliged to sell to every single country in the EU may not be a problem for multinational companies,” says the Forum’s chief executive Phil Orford, “but it could spell the death knell for countless SMEs in the ecommerce industry.”

The draft amendments were voted through at the end of March. The Directive will now enter a period of negotiations before final amendments are agreed.