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.com
Brussels | Düsseldorf | Hamburg | London www.linkedin.com/in/robblamires
Manchester | Munich | Palo Alto | Paris | www.ffw.com

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. European Law – A Quick Guide
Supranational European Institutions - A Complicated Set Up!

4. European Law – A Quick Guide
European Union:
•27 Member States (soon to be 28)
•5 Candidate Countries
•3 Potential Candidates
(13 other European Countries)
Motto: “United in diversity”

5. European Law – A Quick Guide
European Institutions:
• European Parliament
• European Council
• European Commission
• European Court of Justice
Law-making:
• New Legislation - Parliament, Council and Commission
• Cases - Court of Justice

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 harmonization
Implications:
• Inconsistencies across Europe
• Legal questions - mixture of European and national legislation

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. Entering the European Market
Key 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. Entering the European Market
Key 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. Entering the European Market
Country 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. 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. Unfair Contract Terms
B2B Contracts
Liability 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. Unfair Contract Terms
B2C 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. Unfair Contract Terms
Important 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. B2C Contracting and Consumer Protection in Europe
• General contract law
• General consumer protection law / regulation
• Law / regulation governing online transactions

16. B2C Contracting and Consumer Protection in Europe
Unfair 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. B2C Contracting and Consumer Protection in Europe
Unfair 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. B2C Contracting and Consumer Protection in Europe
Distance Selling / Electronic Commerce
Current 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 goods
From 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. 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. European Privacy and Data Protection
Key Principles:
• Fair and lawful processing
• Limited purposes
• Adequate, relevant and not excessive
• Accurate
• Kept no longer than necessary
• Processing in accordance with the data subject's rights
• Secure
• No transfer to countries without adequate protection

21. European Privacy and Data Protection
Consequences 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. 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 given
2. Specific
3. Informed
4. Indication of wishes
“Non-essential” = all cookies other than:
1. Shopping basket
2. Security
3. Server workload distribution

24. 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

25. European Regulators
In most Member States, there will be one (or more) regulatory
authorities or bodies responsible for:
• Competition / antitrust
• Consumer protection
• Privacy and data protection
• Communications and broadcasting
• Financial services
• Gambling
• Utilities
Broad 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

26. European Regulators
Like regulators around the world
• Created by Statute:
– Limited Remit
– Limited Powers
• Typical Powers:
– Information Gathering
– Injunctive Action
– Fines
– Formal / Informal Publicity

27. European Regulators
Effective engagement:
• Early legal involvement
• Is process being followed?
• Valid exercise of powers?
• Consultation / Cooperation
Proactive engagement:
• Specific duties typically include:
– To consider complaints
– To take enforcement action
– To publish reasons for action / inaction

28. 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

29. 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