Weakness of Consumer in E-Commerce and Jurisdiction Issue Approach in EU Region
Transaction Types in E-Commerce
In e-commerce, it can be separated two different type which are business to business transactions and business to consumer transactions. Those types have involved several differences among each other. Basically, when business to consumer transactions one of the party which is consumer make this trade without his profession as it stated in Brussel Regulation. However, in business to business transactions, both of parties make it a trade with their commercial knowledge and they seek to profit-income from the transactions. Moreover, there are some different measures which are stated by US courts which can be a guide to understand whether the transaction is business to business or business to consumer transactions. Thus, legally it is needed to separate their responsibility because of their situation in the commercial actions.
No doubly, international trade has existed before the internet, but with e commerce, individuals who don’t seek any business can start to make transaction beyond the borders in theirs every day life.
Regardless the commercial action has been done via cyberspace or not, if both of party of the commercial actions make the trade to purpose of profit and if they do it with their experiment professions, it must be called a business to business transactions which can also be called performance to performance. The business to business has also defined in Brussel Regulation as a performance to performance of obligation. İt is clear that when it qualified as a business to business transactions, it should be admitted that there no “weaker party” than other. Thus, it means none of the party in the transaction need to protect more than other. In this point, shortly it can be said that parties should have known their responsibility and they should make provisions for disputes which may arise in future. However, it has been also covered in Brussel Regulations but the regulation just valid in European Union jurisdiction. In borderless nature of internet, no doubly, it is an insufficient regulation regard to the territory which is applicable.
On the other hand, even the jurisdiction is stated via any regulation regardless Brussel Regulation or not, it has just provided to trial and not considerable enforcement facilitation . Although, any national court which has been authorised legally make judgement, the enforceability of judgement become another issue but also the significant part of the judgement. However, as it stated above, although because of borderless nature of internet, parties in business to business commercial action cannot enforce the judgement of the court, they should have made provisions in all way.
1.1.2 Business to Consumer Transactions in Cyberspace
As it stated in business to business transaction, if there are legal issues in international trade in business to business commercial actions, it has also existed regardless invention of internet. Companies or individuals from different jurisdiction have already made transaction to seek profit. The parties of those type of transactions are doing that by their professions. Although it should be admitted business to business transaction in international area is facilitated by using electronic space, the legal issues of those kind of transactions are not new and has already existed before international trade start. However, it is not same for business to consumer transactions in international trade. Via usage of cyberspace, every individual who don’t seek any profit from transactions can do international transactions.
In business to consumer transaction, when vendor seek to make profit from the transaction and do this act with using his experience and profession, the buyer who is consumer doesn’t target to make profit from this action and also he doesn’t make it as a “business”. It has also been demonstrated and admitted in Brussel Regulation : “In matters relating to a contract concluded by a person, the consumer, for a purpose which can be regarded as being outside his trade or profession” For instance, an individual can buy a computer, or something about his or her hobbies or a plane ticket from seller from different jurisdiction. As it seem, it cannot be said that parties in business to consumer transactions are equal. No doubly, there is a party which is weaker than other who is consumer. It has also been stated in Brussel Regulation, the consumer is weaker side and thus he need to be protected.
1.2 Contact-Mediator Sites in E-Commerce
Today, most of companies carried their business to electronic platform. Basically, it can be separated two varied internet sites to seek commercial action. Companies may start online transactions by establish their own sites. For commercial sites which does their trade in domestic may be solved with domestic legislation and also the enforceability doesn’t become a different issue, however for international commercial sites the situation is different than domestic companies. Most of clothes companies, accessory companies, music markets and several more kind of them make trade beyond border via cyberspace. Additionally, there are several commercial sites which are only exist in cyberspace to seek to sell thousands of different products in online. Amazon.com may be given an instance for those kinds of sites which does international trade. In all of them, customer can reach product whether the company which sells the product exist in the country of customer. This variety of commercial sites also brings liability issue if disputes arise between customer and vendor. No doubly, the liability issue can arise if the purchasing is done from vendors’ sites directly, however, when any product or services is provided by a mediator site, the liability can arise again. Particularly, several commercial sites buy the products or services from the first seller and sell it again in their sites. For instance, today several commercial internet sites sell holiday packet after they bought it from the hotels. Or, again several sites buy the number of different products and sell it for the favor of their profit. However, if there is a dispute arises between customer and seller, it cannot be said easily which vendor should shoulder the burden or should both of them be charged severally. Moreover, this confusion may be done by contrived maliciously. Even the post-judgment, they may try to refuse the liability in their jurisdiction tends to not pay the indemnity
On the other hand, another issue about the commercial sites which sells different brands good is about recourse problem. This sites such as e-bay hasn’t got a power to enforce the brand to absorb the loss of consumer if any dispute arises because of the product sold online. This means consumer may face another obstacle while he attempts to resolve the dispute. Thus, as it will be stated under the different title in this paper, frailties of consumer who make online transaction are more than a traditional customer make transactions physically.
Consumer as a Weaker Side in E-commerce
As mentioned before in this paper, e-commerce facilitates international transactions and moreover, it makes international transactions as an everyday process for consumers. The international dimension of business to consumer transactions brings different obstacles and thus weaknesses to the consumer if a dispute arises with a seller from a foreign country. Firstly, because of the nature of the business to consumer transactions in e-commerce, it is very rare or cannot be seen as a seller sue any consumer due to a purchasing done in cyberspace. Because, transactions in cyberspace, the consumer pays the cost of the product or service firstly, then the product or service is delivered to him or provided. Moreover, unlike business to business transactions, consumers cannot make negotiation about the contract regard to purchasing in e-commerce. In e-commerce, “take it or leave it” principle has been adopted in relationship with consumers. Thus, after the transaction, the consumer has already done his duty, and the seller has taken his benefits from the transaction before he does his duty of the transactions.
Regardless any transaction relationship whether it has been done via cyberspace and thus e-commerce, if the purchasing has been done by consumer which means someone doesn’t utilize profit by using his profession, the consumer is stated “weaker side” of the transactions. However, in e-commerce business to consumer transactions, consumer may face a lot of different obstacles which is uncommon for an offline consumer may face. The borderless nature of e-commerce no doubly brings several advantages for both of seller and consumer. The vendor can sell his goods beyond of the country who domicile easily, on the other hand the consumer can reach several different goods all around the world easily by e-commerce as well. However, for consumer, the obstacles can be more than a traditional offline consumer.
Firstly, an international transaction kindly means a purchasing from different jurisdiction, which also mean the other party may be bind totally different substantial rules than consumer, moreover unlike an offline consumer, e-commerce consumer may face traditional or linguistic differences. Particularly, when a dispute arises between consumer and vendor, linguistic obstacles may cause of loss for consumer. And the other issue which make consumer weaker is about post-award issues. It means, even consumer win a legal suit against seller in national court or an arbitration institute, the enforceability of the award is uncertain in reality. The consumer may need to approve the award in the domicile of seller, and it may make impossible or worthless to achieve his legal rights against defendant vendor. Although there are regulations and directives to protect consumer, it is insufficient about solving enforceability issues.
When it is mentioned about business to consumer transactions, the cost of the subject about transaction is not worth to strive to enforce the award in different country. Because mostly, awards of consumer-seller dispute cannot absorb the cost of legal process in different country to enforce the seller to carry out the award of national court. Thus it is become another weakness of consumer in the international electronic transactions.
Worth of Disputes Subject to Enforce İn Foreign Country
Today, there are global, local multinational and bilateral agreements for facilitating enforceability of awards of national courts or alternative dispute resolution in foreign countries. New York Convention is an instance on global base and Brussel Regulation is another instance that seek facilitation of enforceability of awards of EU Member States’ Courts in other member states territories. However, those multilateral agreements only facilitate the procedure of the court where the award is required to enforce. In other words, still it is needed to apply the foreign countries where it is needed to enforce and follow the legal steps of the foreign countries that may be not acquaintance for the party who needs to enforce the award in a foreign state. Moreover, after the recognition and approve has been provided by court of foreign state, most of country require another enforcement procedure. In this point, state of jurisdiction for favour of consumer or facilitation of enforcement in foreign country remain incapable for consumer. Because, in business to consumer international transactions, the cost of product or service which is the subject of the transaction is mostly remain less than then the cost of applying a foreign state’s cost. An ordinaire consumer cannot be expected to know the legal system in foreign country and thus he needs to legal consultation in the foreign country. Moreover, the distance between consumers’ country and the foreigner country where the award should be enforced and may be linguistic issues may be extra burden for consumer. When it is compared the cost of all needs for consumer and what he earns from the award, it mostly become worthless to enforce it in foreign country although the agreements favour for him. Thus, there is needed an alternative dispute resolution system which is globalized and provide enforceability automatically in the county of consumer. Otherwise in this circumstances, although multilateral conventions provide facilitation for consumer, in reality an award resource from a consumer dispute remain worthless to enforce in foreign state because of the reason which are mentioned extra burden consumers’ shoulders.
Cyberspace and thus electronic commerce render possible to make transaction from different country for customers very easier. However, in international transactions, consumer may face some hardships to reach his rights in legally if any dispute arise between seller and consumer. Consumer may need to be objected with a foreign states legal system to enforce the award of national court where he domicile. Consumer may not afforce to seek his right if the other party of transaction is in different jurisdiction. Although he sue the seller in his country and awarded by national court, he may not be enforce to carry out the judgement of national court if the other side of dispute doesn’t exist in jurisdiction of the court. No doubly, via recognition and approval, the award of court can be enforced in country of seller. However, unlike a business to business transactions, consumer may not effort for this legal procedure. Moreover, it may cost more than loss of consumer. As it seen, international transactions in business to consumer relations, consumer may not reach his rights in reality if seller hasn’t got any asset in the country of consumer. Due to this reason, in international transactions, consumer is weaker than thought he is weaker. Although, Brussel Convention admit consumer is weaker and regulate the rules for favour of consumer, it is not touch the enforceability issue enough and its only cover EU.
Critic of Regulations influence e-commerce in European Region
In Europe Union Region, for international trade there are two fundamental regulations which are Rome Convention and Brussel Regulations. On the other hand there is a directive for regulating e commerce also. Firstly, its needed to explain the differences between Rome Convention and Brussel Regulation. In fact, although both of them seek to regulate international trade in European Union Region, their targets are totally different. When Rome Convention focus on substantive law, Brussel Regulation seek to regulate procedural law. The significant feature of Brussel Regulation is the regulation of jurisdiction. Thus, authorised court is stated according to Brussel Regulation. However, in Rome Convention, it is sought to regulate choice of law. In this point, because of this paper focus enforceability in different jurisdiction issue, Rome Convention has became irrelevant. The first point is which court of state should be authorised and this question has been responded in Brussel Regulation at least for European Union Region.
The regulations have been done to authorise the court when disputes arise in parties from different member state. The regulation has accepted that customer is weaker party and thus regulations to authorise the party has been done for favour of customer: “A consumer may bring proceedings against the other party to a contract either in the courts of the Member State in which that party is domiciled or, regardless of the domicile of the other party, in the courts for the place where the consumer is domiciled. 2. Proceedings may be brought against a consumer by the other party to the contract only in the courts of the Member State in which the consumer is domiciled.” No doubly, the protection of customer in terms of jurisdiction, however, although it is stated in the regulation that award of any members’ court is enforceable automatically, it doesn’t remove the consumers issue about enforceability. Firstly, still consumer need to be object of another foreigner member state to enforce the award and he cannot rescue the extra burdens which this situation brings. Secondly, the Brussel Regulation is not applicable for the award of an alternative dispute resolution. Thus, consumer cannot choose arbitration which may be more fast and cheap way to take award. If he demands to get benefit from Brussel Regulation. The regulation has only sought to state the court which should be authorised. In article 1, it is stated the regulation is valid for which disputes, on the other hand it is also stated which court is authorised according to situation.
In fact, the jurisdiction issues in international trade has been foreseen by European Union Members, and because of this concern, its needed to make a regulation to state the rules to how to authorise the court if parties of the trade from different member state’s jurisdiction. However, the regulation hasn’t solved the problem of enforceability of awards of national courts for consumers. Even the judgement has been done in domicile of consumer, the necessity of enforcement of award in foreign country doesn’t bind that. The lack of asset of seller in the country where the judgement done, it is needed to enforce the award in state where the seller has got an asset which provide to payment. Authorising a court cannot assure the enforceability of the awards of national courts.
On the other hand it should be admitted that The Brussel Regulation has lighted pre dispute and post dispute issues for business to business international transactions. It is a guide for traders who are from member states, when they made trade business in EU territories. It can be said that Brussel Regulation can be light for business to business international trade. Because, in this kind of trade, both sides of the transaction should have foreseen the disputes among them .Or the facilitation of Brussel Regulation doesn’t prevent to spending requirement of consumer to enforce the award in foreign country. Brussel Regulation may light where the disputes could be carried the court. Although enforceability issue has been still on the table, in those kinds of trades, parties act with their professions and thus they provide their precautions about the enforceability issues. At least, parties can know where the court is authorised and they can do their trade in light of the regulation in European Union Region. However, in consumer transactions, the consumer hasn’t got a chance to change the conditions of the purchasing contract. It is demanded from consumer to accept all conditions of the purchasing contract which is basically call ”take it or leave it”. Particularly precaution in contract and regulations can made according to brussel. Brussels cannot provide sufficient confidence for consumer. In reality its solve issues traders who has a dispute with another trader, it boost confidence between traders and make more securely to trade in EU territory among member states. However it is not proper for consumers. For enforceability still consumer needs to be objected with foreigner member state’s legal system and still they need to spend time and money. Its beyond the expectation which may be expected from a customer. Moreover, jurisdiction issue is still on the table if the sellers country is not member of EU. Unlike Brussel Regulation, e-commerce is global.
As it mentioned above, enforceability can be significant issue for customer, and it can become the weakest part of consumer. It cannot be expected from customer to foresee all legal issues which can be happened between seller and him or her. Jurisdiction authorisation cannot provide enforceability assurance for customer. In fact, the point is, in consumer disputes, it is needed to provide to consumer that carry out the award without be objected any foreigner state for e-commerce consumer transactions. For example, as a hypothetical situation, when a consumer from UK has got two disputes against sellers from France and Bulgaria, the total worth of dispute subject is 500 Euro, although the Brussel Regulations facilitation about enforceability, if he is objected with those foreigner states, it cannot be said that consumer earn more than he strived.
On the other hand, in borderless nature of internet, e-commerce provides borderless trade regardless jurisdiction area of member states. As it doesn’t assure enforceability reality even in European Union Region, but also its insufficient to solve jurisdiction issues if the disputes will rise between parties from member states’ jurisdiction and another states’ jurisdiction.
If the weaker who is consumer cannot be motivated that he can enforce to carry out the award of national courts to the buyer, he may give up to sue the seller because it can be cost of additional lost for him.
Shortly, working of Brussel Regulation is up to enforceability of the awards of the national court. However, the facilitation for customer to enforce the judgement of the court is insufficient in Brussel Regulation. Because Still consumer need to object with another states’ legal system. Find of authorised jurisdiction can be light for particularly in business to business transactions however only finding the authorised jurisdiction cannot be sufficient to reach the legal right for consumers, nowadays, by electronic commerce consumer can do transactions from around of world and the regulation remain insufficient to facilitate enforceability of awards and also its insufficient from region which covers.
The Electronic Commerce Directive
The Electronic Commerce Directive has been adopted in 2000. The directive hasn’t step in the national laws of the Member States directly. It is required that the vendor of the goods should provide information about the purchasing to customer. In the directive, due to structure of e-commerce, technical information also has been required from vendor to send the consumer such as technical steps in order to complete the purchasing process. The product services which are provided by seller via online has been charged to deliver on time the product and without any defect. As it seen, the directive tends to protect consumer in e-commerce transactions. However, as it same in Brussel Regulation neither international nor in local base, post-award issues in e-commerce hasn’t been handled.
When The Brussel Regulation and The Electronic Commerce Directive are overviewed, both of them seek to protect the consumer. The Brussel Regulation authorise the jurisdiction for favour of consumer and in electronic commerce directive the regulations have been done for procedural and substantial law. However, when it has been looked both of them as a whole, the regulations have covered pre and during the dispute course. Moreover, as it was mentioned in the Brussel Regulation part of this paper, it is insufficient because of the jurisdiction area which is covered when it is compared with e-commerce which is valid in all around the world. Consequently, the directive also cannot solve or facilitate the enforceability issue in business to consumer transactions.
There are significant differences between business to business transactions and business to consumer transactions. As it defined and mentioned in this Chapter, business to business transaction has been done between parties who use their professions and target to profit from the transactions and because of that it should be admitted both parties are equal in legal ground. The Regulations and international conventions can be light for preparing their contracts and it may also demonstrate them how can they take their precautions legally. And all the results of actions should be endured by them in legal ground thus there is no weaker party. However, in business to consume transactions, there is a weaker party consumer who doesn’t purpose any profit form the transactions. Consumer cannot be expected to being capable in every jurisdiction where he has done. Moreover, the legal and economic capability can not be enough to proceed the legal procedure in everywhere he needs.
In conclusion, the consumer has been accepted as a weaker side in e-commerce transactions by EU. However, either scope of the territory which covers of Brussel Regulation and E-commerce or regulations for favour of consumer has been remained insufficient regard to enforceability. Although article 39. Brings facilitations about enforceability, it doesn’t prevent to waste of money and time for consumer because the consumer still needs to be objected with a foreign country and its’ legal system. Moreover when it compares with e-commerce’s field, no doubly the regulation remain as ”domestic” which are valid only in EU, not globalized