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The eCommerce Directive, the Digital Single Market and mCommerce

Mike Essex

by Mike Essex on 8th June 2011

Westminster eForumOn the 7th June 2011 the Westminster eForum held a seminar on ‘The eCommerce Directive and the Digital Single Market’. The eCommerce directive governs the usage of the Internet and businesses selling on it, whilst the concept of a digital single market is one where any company can sell anywhere easily. The seminar bought together policy makers, government officials and the likes of Dell, Yahoo, MasterCard and PayPal to discuss the issues. We share the best parts of the day.

For those interested in online regulations, policies and how to drive a business in to Europe it was an interesting morning seminar if one a little tight for time. 18 speakers shared their views across a four hour session, and in this post we’ve taken away the core parts of information for those who couldn’t attend

eCommerce today and into the future

The first presentation was chaired by Philip Virgo, and kicked off with a talk by Virginie Alloo, the E-commerce Senior Analyst at Cullen International. She showed the size of the European ecommerce market ($536bn) and highlighted a 10% growth year on year. This growth was put down to improved e-retailer offers, better transport to customers and low switching costs for customers. In these figures the UK and Germany led the way in sales, then France, with Spain and Italy lagging behind.

Despite this, sales from one region to another (cross border sales) are low, and people still have more confidence in domestic sellers.

eCommerce Directive – towards a digital single market?

So with trust low, can brands sell their products in Europe with a UK base of operations? Tristan Rogers (Chief Executive – Concrete) felt not, especially as money and stock can now flow in both directions. Instead local bases are needed in each country. In addition with 30% of online garment orders returned, in that market in particular, managing stock across countries and stores is essential.

Professor Patrick van Eeecke (Partner, DLA Piper) then took a look at the legal barriers preventing growth of a single market selling in Europe. The eCommerce Directive, was one such area he felt needed to be renewed, so that legal hurdles can be minimised. He called the directive old fashioned, unclear and inconsistent.

One such example is social networks and search engines being liable for the content they display. This is unrealistic, and under a new directive shouldn’t occur. However they do need to protect customers from buying poor quality or counterfeit goods.

Andrew McClelland (Director of Operations and Regulatory Affairs, IMRG) took a more positive view, stating that online is as close to a perfect market as you can get because the cost for customers to switch is so low. He held ASOS up as a great example of selling in Europe, who have seen half of their sales come from overseas.

Yahoo also spoke at the event with Emma Ascroft their director of public policy. She saw the directive as not broken but in need of clarification. The issue for Yahoo is that they can be liable for content in different regions. We need to strike a balance between rights and responsibilities for those who add content and others who provide a platform for this content.

We asked the panel to what extent is it the responsibility of platform holders to regulate content. Emma responded that this is ultimately the responsibility of users. Patrick then highlighted that a lot of legal cases are currently looking at this and that perhaps instead users should be able to filter what they see.

The UK in the single European online marketplace

The Head of EU and International ICT Policy, Nigel Hickson, was next to speak. More positive industry stats were shared (10% of all retail sales are now through e-commerce. There will be a £500m investment in broadband in next few years.) He focused on how the Internet is governed by directives written before eBay, Facebook and user content.

Although there are bad websites on the Internet, and we could all think of sites we would like blocked, Nigel feels that is a bad road to go down. Instead we need to focus on which laws to keep rather than adding extra laws for the sake of it. Laws on net neutrality for example are not met in a positive way.

Tackling Obstacles to a Digital Single Market

Harrie Temmink (Deputy Head, Online and Postal Unit, European Commission) walked us through the future of ecommerce and predicted by 2015, 20% of ecom sales should be across borders. Any legislation that is added should enhance the competitiveness of European service providers, provide legal certainly to businesses and citizenes, whilst removing obstacles to cross border online services.

In a shocking statement he highlighted how it is easier for policy holders to remove websites that have copyright infringement than child abuse. More reason for a policy change.

eConsumer rights in the Digital Single Market and beyond

Brigitte Acoca (Secretariat to the Committee on Consumer Policy, OECD) started this debate by stressing that behavioral advertising and social commerce are two areas in need of extra concern. Consumers needs to be aware on the rules, who to turn to and the redress. Another factor is that digital products (especially in the cloud) must have the same consumer protection as tangible and intangible products.

Dell EMEA was represented by Angus Cormie, their marketing director. This was one of the best talks, although sadly only five minutes long. Dell have a separate business in each of the companies they sell. That’s 70 countries, 70 legal entities and 70 unique sets of terms and conditions.

All of their sites have a similar look and feel, the only difference is the legal framework. To make all of this work and ensure compliance in each region Dell need 12 full time lawyers and they have a 180 page document on trading in those markets. Because of this he felt it would be very hard for small retailers to setup in a new country.

When asked about cookies by the audience Angus stated that they are not building anything or scoping anything out about cookies yet as they are waiting to see what member states do. They are concerned it will be different in each state. Dell will not implement the policy until they hear what will happen and get clearer guidelines. It’s great to see Dell standing firm on this change, and that put some of the audiences mind at rest.

Johan Lindstrom, the Business Leader in eCommerce for MasterCard Europe, looked at why the US is so far ahead of us. They have an eCommerce market the same size as Europe but with half the number of people. The obstacles holding us back are shipping issues, logistics and to a lesser extent language. Even MasterCard face issues and despite there being 300 million debit cards in circulation only half work online. Then have to persuade merchants to make these work in the stores and banks across Europe.

Dr Mike Short (Vice President of Public Affairs in Telefónica Europe) felt the biggest players in an industry should help develop technology that pushes a market forward. For example they allowed their mobile phones to act as Oyster cards. There is a need to reinforce and protect customers with a consistent experience online

The panel closed with Mike O’Connor (Chief Executive, Consumer Focus). He feels customer trust is being ruined online due to non delivery, poor customer service and misleading advertising. To control this he also feels we need better regulation and not more regulation.

The future for mCommerce

The final seminar of the day was chaired by Steve Ranger of Silicon.com, and kicked off with Emma Robertson (Managing Consultant at Transform). This was the first presentation to break away from policy, and to have a more casual conference feel about it, which was a nice way to add variety to the day. Emma explained how the value chain is destroyed by mobile commerce. The customer journey is no longer linear in terms of channels or thought process and customers can drop in or out of your site at various points of their journey. In short don’t use every channel unless you can tie them back to your own site.

David Glennie (Chief Innovation, MIG) took the baton from Emma and ran with it. Again, another fun upbeat presentation. He told marketers to stop looking at mobiles as a distant dream. Sub phones (smart phones / tablets) will own all of the market in no time. Customers were promised mobile comms for so long, that now it is here they can’t get enough. This led to a rapid growth and uptake.

Another good point made by David is that people store so much information (from credit card details to photos of our children) that you have to be careful what you deliver to their phones. Would you want your app / site next to a photo of someone ones kids? He wrapped up by saying that customers want to be treated unequally, i.e. they want to feel special and have a service that suits them.

Bradley Brady (Directory of Strategy and Communications for PhonepayPlus) explained that we need to be aware of scammers and the impact this has on customers. Every new technology leads to new scams and therefore laws need to be flexible or they will be too late to make any difference. Likewise people need to know there is a regulator who they can report offences to.

PayPal UK had the last word with a talk from Carl Scheible their Managing Director. He reminded companies that we all face the same issues, and that we are in a time of rapid change. With more innovation in the last 2 years than the previous 12 in Ecommerce and m-commerce. Pay pal view m-commerce as something totally beyond what they originally expected.

Customers now want to access the Internet as often as possible, and Cisco predict 15 billion connected devices by 2013. Brands have more opportunities to get noticed, but also shorter attention spans from customers. His final point was that digital should offer no less value than physical products. Customers want the same price and service and quality. In fact digital is better due to instant delivery, so don’t underpriced digital items.

Summary

One of the main issues of the day is that there were some moments where presenters would have contradictory stats of the size of various markets, and many presenters had no slides. This led to the seminar feeling more like an informal chat, or debate. On many occasions there was speculation on how laws may change, but not actual data or concrete answers.

In addition before the show we spoke to several attendees all of whom stated their reason for attending was to learn about Cookie law. However this wasn’t mentioned by a single presenter (apart from Dell responding to an audience question). Other legal issues such as the ASA’s increased involvement in online were left out. Clearly the seminar was focused on the eCommerce Directive, but with so many legal policy experts in place, it seemed like a missed opportunity to just focus on the revamping of a 10 year old policy.  These types of issues would have been a more natural fit than m-commerce which didn’t have an obvious connection to the previous talks.

However there were some things to take-away from the day. Hearing big brands discuss their problems was useful for anyone looking to sell across borders. The m-commerce section was also excellent, despite being an odd fit next to the other topics. The talks by Emma Robertson and David Glennie had great style, and even talks devoted solely to policy such as Professor Patrick van Eecke and Harrie Temmink had real value. With the exception of Harrie these speakers only have five minutes to talk and you could tell they would have plenty more to say in a larger session.

On the whole the seminar was helpful, but it left us with more questions than answers. It was great for raising awareness of issues, and making everyone feel they weren’t the only ones frustrated by legal implications. With high profile speakers from major brands and key Government roles hearing a mixture of both was insightful. Hopefully the best presenters will get more time to shine in the future and the audience feedback forms will led to more hot topics discussed in future sessions.

Mike Essex

Mike Essex

Mike Essex specialises in digital marketing and everything search. A recent project of Mike’s was featured on BBC News, Radio 5Live and the Times here in the UK, whilst also featuring on USA Today and ABC News in the US. He will be writing throughout the month about digital marketing and much more...

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