European Legal Issues for US Enterprise    Robert Blamires    Senior Associate    4 April 2013                            ...
European legal issues for US businesses• Introduction• European Law – A Quick Guide• Doing business in Europe    – Contrac...
European Law – A Quick GuideSupranational European Institutions - A Complicated Set Up!
European Law – A Quick GuideEuropean Union:•27 Member States (soon to be 28)•5 Candidate Countries•3 Potential Candidates(...
European Law – A Quick GuideEuropean Institutions:• European Parliament• European Council• European Commission• European C...
European Law – A Quick Guide                                                                     “United [?] in diversity”...
Entering the European Market• Establishment in Europe will give rise to exposure to local law• Even without physical estab...
Entering the European MarketKey areas (but out of scope today):•   Business organization / establishment•   Employment / p...
Entering the European MarketKey areas (in scope today):•   Country of origin•   Unfair contract terms•   B2B contracting• ...
Entering the European MarketCountry of origin principle:• Applies to cross-border trade in a number of areas, including au...
Unfair Contract Terms• Deals with:    – Exclusions and limitations of liability in all contracts (business and consumer)  ...
Unfair Contract TermsB2B ContractsLiability cannot be excluded or       Subject to reasonableness test:limited for:       ...
Unfair Contract TermsB2C Contracts Liability cannot be excluded or limited for:                                        Sub...
Unfair Contract TermsImportant exemptions:• International contracts for the sale of goods or under which or in furtherance...
B2C Contracting and Consumer Protection in Europe• General contract law• General consumer protection law / regulation• Law...
B2C Contracting and Consumer Protection in EuropeUnfair Terms in Consumer Contracts• Standard terms which unfairly imbalan...
B2C Contracting and Consumer Protection in EuropeUnfair Commercial Practices• General prohibition on unfair commercial pra...
B2C Contracting and Consumer Protection in EuropeDistance Selling / Electronic CommerceCurrent position:• Information obli...
European Privacy and Data Protection• Comprehensive European and individual Member State privacy regimes• Applies to all p...
European Privacy and Data ProtectionKey Principles:•   Fair and lawful processing•   Limited purposes•   Adequate, relevan...
European Privacy and Data ProtectionConsequences of compliance failures:• Fines – currently up to £500,000 in the UK and m...
European Privacy and Data Protection‘Cookie consent’ rule (art. 5(3) of revised e-privacy directive):A user’s consent is r...
Proposed new EU data protection framework•   Extraterritorial reach. Non EU-based controllers potentially “in scope” if th...
European RegulatorsIn most Member States, there will be one (or more) regulatoryauthorities or bodies responsible for:• Co...
European RegulatorsLike regulators around the world• Created by Statute:    – Limited Remit    – Limited Powers• Typical P...
European RegulatorsEffective engagement:• Early legal involvement• Is process being followed?• Valid exercise of powers?• ...
Multi-territory European Roll-outs• Important to recognise these can be     • Do homework – for example:  substantial proj...
Key contacts           Robert Blamires           Senior Associate           Mob (US): +1 (408) 335 9167           Mob (UK)...
EU legal issues for US enterprise
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EU legal issues for US enterprise

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EU legal issues for US enterprise

  1. 1. European Legal Issues for US Enterprise Robert Blamires Senior Associate 4 April 2013 Robert Blamires Mob (US): +1 (408) 335 9167 Mob (UK): +44 (0)7872 822 353 Email: robert.blamires@ffw.comBrussels | Düsseldorf | Hamburg | London www.linkedin.com/in/robblamiresManchester | Munich | Palo Alto | Paris | www.ffw.com
  2. 2. European legal issues for US businesses• Introduction• European Law – A Quick Guide• Doing business in Europe – Contracting in Europe – Business to business – Business to consumer – European Privacy and Data Protection – European Regulators – Multi-territory European Roll-outs
  3. 3. European Law – A Quick GuideSupranational European Institutions - A Complicated Set Up!
  4. 4. European Law – A Quick GuideEuropean Union:•27 Member States (soon to be 28)•5 Candidate Countries•3 Potential Candidates(13 other European Countries)Motto: “United in diversity”
  5. 5. European Law – A Quick GuideEuropean Institutions:• European Parliament• European Council• European Commission• European Court of JusticeLaw-making:• New Legislation - Parliament, Council and Commission• Cases - Court of Justice
  6. 6. European Law – A Quick Guide “United [?] in diversity”Implementation:• Member States’ individual interpretation and implementation• Choice of form and method for implementation• Minimum and maximum harmonizationImplications:• Inconsistencies across Europe• Legal questions - mixture of European and national legislation
  7. 7. Entering the European Market• Establishment in Europe will give rise to exposure to local law• Even without physical establishment, there may be exposure: – Reputational – Legal• Beware risk of ‘inadvertent’ establishment…
  8. 8. Entering the European MarketKey areas (but out of scope today):• Business organization / establishment• Employment / pensions / immigration• Real estate / environment / planning• Marketing / advertising regulation• Agency / distribution arrangements• Competition (antitrust)• Taxation
  9. 9. Entering the European MarketKey areas (in scope today):• Country of origin• Unfair contract terms• B2B contracting• B2C contracting and the consumer protection regulatory regime• Electronic commerce / distance selling• Privacy and data protection
  10. 10. Entering the European MarketCountry of origin principle:• Applies to cross-border trade in a number of areas, including audiovisual broadcasting and e-commerce• Applicable law = law of European Member State in which the provider is established (other Member States must allow provider’s services without further regulation)• BUT, in consumer contracts, the consumer still has the benefit of mandatory rules of his home country
  11. 11. Unfair Contract Terms• Deals with: – Exclusions and limitations of liability in all contracts (business and consumer) – Terms claiming to enable a supplier to render substantially different contractual performance or no contractual performance at all – Indemnities given by consumers• Reverses the burden of proof with regard to establishing reasonableness
  12. 12. Unfair Contract TermsB2B ContractsLiability cannot be excluded or Subject to reasonableness test:limited for: • Always:• Death / personal injury caused by – Exclusion / limitation of liability for loss / negligence damage, other than death / personal injury,• Breach of implied terms in goods caused by negligence contracts re title – Exclusion/limitation of liability for breach of implied terms in goods contracts re conformity of goods with description or sample, or as to their quality or fitness for a particular purpose – Exclusion/limitation of liability for pre- contractual misrepresentation • When dealing on the other party’s standard terms of business: – Exclusion/limitation of liability for breach of contract – Terms claiming to render a substantially different contractual performace or no contractual performance at all
  13. 13. Unfair Contract TermsB2C Contracts Liability cannot be excluded or limited for: Subject to reasonableness test: • Death / personal injury caused by • Exclusion / limitation of liability for loss / negligence damage, other than death / personal injury, caused by negligence • Loss caused by goods ordinarily supplied for private use or consumption which • Exclusion / limitation of liability for prove defective while in consumer use or breach of contract which results from the manufacturer’s / • Terms claiming to render a substantially distributor’s negligence different contractual performace or no • Breach of implied terms in goods contracts contractual performance at all re title • Indemnities given by consumers for • Breach of implied terms in goods contracts negligence or breach of contract re conformity of goods with description or • Exclusion/limitation of liability for pre- sample, or as to their quality or fitness for contractual misrepresentation a particular purpose (business to consumer contracts).
  14. 14. Unfair Contract TermsImportant exemptions:• International contracts for the sale of goods or under which or in furtherance of which the title in goods passes• Where applicable law is UK law only by choice of the parties (and UK law would not otherwise apply)• But: – the choice of law imposed wholly or mainly for avoiding UCTA, or – one party is a consumer habitually a resident in the UK (at time of contract), and the essential steps necessary for making the contract were taken in the UK
  15. 15. B2C Contracting and Consumer Protection in Europe• General contract law• General consumer protection law / regulation• Law / regulation governing online transactions
  16. 16. B2C Contracting and Consumer Protection in EuropeUnfair Terms in Consumer Contracts• Standard terms which unfairly imbalance the parties’ rights to the consumer’s detriment• Indicative list of terms which may be regarded as unfair(UK Unfair Contract Terms Act)• Unfairly excluding / limiting liability
  17. 17. B2C Contracting and Consumer Protection in EuropeUnfair Commercial Practices• General prohibition on unfair commercial practices• Misleading actions/omissions• Aggressive practices• Banned practices – bait advertising – bait and switch – advertorials – presenting legal rights as part of the offer – ‘closing down’ promotions – pyramid schemes
  18. 18. B2C Contracting and Consumer Protection in EuropeDistance Selling / Electronic CommerceCurrent position:• Information obligations• Mandatory cancellation rights – few exceptions• Prescriptive procedures / formalities for returning goods• Requirement to provide a refund within 30 days• Prohibition on charging for return of faulty goodsFrom June 2014:• Updated EU-wide consumer rights law will take effect• Cancellation period harmonized across Europe to 14 days (extends UK position)• “Intangible” digital content – new information requirements and cancellation right• Refund period shortened to within 14 days• Strengthens consumer rights if supplier fails to deliver
  19. 19. European Privacy and Data Protection• Comprehensive European and individual Member State privacy regimes• Applies to all personal data, not just certain types of data• Applies to all businesses, not just consumer-facing businesses• European data protection framework: enormous changes in the pipeline
  20. 20. European Privacy and Data ProtectionKey Principles:• Fair and lawful processing• Limited purposes• Adequate, relevant and not excessive• Accurate• Kept no longer than necessary• Processing in accordance with the data subjects rights• Secure• No transfer to countries without adequate protection
  21. 21. European Privacy and Data ProtectionConsequences of compliance failures:• Fines – currently up to £500,000 in the UK and may be more in other EU jurisdictions• Disruption to business critical data processing• Complaints from customers, employees, suppliers etc.• “Naming and shaming” – brand damage• Loss of business!
  22. 22. European Privacy and Data Protection‘Cookie consent’ rule (art. 5(3) of revised e-privacy directive):A user’s consent is required before placing non-essential cookies.“Consent”=1. Freely given2. Specific3. Informed4. Indication of wishes“Non-essential” = all cookies other than:1. Shopping basket2. Security3. Server workload distribution
  23. 23. Proposed new EU data protection framework• Extraterritorial reach. Non EU-based controllers potentially “in scope” if they process personal data of EU residents for the purpose of offering goods or services or monitoring• Fines of up to 2% of annual worldwide turnover• Stronger and wider rights – Information and access – Right to be forgotten, to erasure and to object• Data protection by design and by default• Documentation and cooperation• Security and notification of breaches• Data protection impact assessments and Data Protection Officers
  24. 24. European RegulatorsIn most Member States, there will be one (or more) regulatoryauthorities or bodies responsible for:• Competition / antitrust• Consumer protection• Privacy and data protection• Communications and broadcasting• Financial services• Gambling• UtilitiesBroad scope of regulation in Europe arguably results in:• Compliance achieved more through regulatory action than litigation• Potentially different imperatives and styles in terms of effective regulatory engagement
  25. 25. European RegulatorsLike regulators around the world• Created by Statute: – Limited Remit – Limited Powers• Typical Powers: – Information Gathering – Injunctive Action – Fines – Formal / Informal Publicity
  26. 26. European RegulatorsEffective engagement:• Early legal involvement• Is process being followed?• Valid exercise of powers?• Consultation / CooperationProactive engagement:• Specific duties typically include: – To consider complaints – To take enforcement action – To publish reasons for action / inaction
  27. 27. Multi-territory European Roll-outs• Important to recognise these can be • Do homework – for example: substantial projects – B2B / B2C?• Determine overall approach – impacted – Offlline / online? by: – Which territories / target markets? – Risk tolerance – How is data used / where is it held / how is it shared / where is it – Budget transferred to? – Emphasis on: • Develop templates • maximum uniformity? Or • Achieve buy-in – then roll-out • maximum local operational • Manage the process freedom? • Keep under review – Working in practice? – Developments – changes in model / changes in law
  28. 28. Key contacts Robert Blamires Senior Associate Mob (US): +1 (408) 335 9167 Mob (UK): +44 (0)7872 822 353 Email: robert.blamires@ffw.com www.linkedin.com/in/robblamires

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