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Small businesses could have their Internet ambitions crushed by EU legislation due to be drafted this week.
Small businesses looking to exploit the Internet as a channel to a global market could have their ambitions crushed by EU legislation due to be drafted this week.
Lobbyists are up in arms over the EU's proposed Rome II Regulation, which will mean that any business setting up a Web site will need to ensure its content, products and claims about those products comply with legislation in each European member state.
Sara Price, the head of public affairs at the Advertising Association, said that if the regulation goes ahead then it will cause a "nightmare" for SMEs. "It's absolutely critical that this legislation doesn't go through in its current form, or else we may as well all pack up and go home," said Price. "Any small business which is seeking to operate on the Internet may just as well give up."
Rome II will seek to establish in law the principle that companies should be sued in the consumer's own country, under the laws in that country, in all cases where disputes over non-contractual liabilities arise.
The legislation is effectively an addition to the controversial Brussels Regulation agreed by EU ministers at the end of last year (NMA 18 January) which established the principle for contractual relations.
According to Price and others, Rome II will be even more damaging for SMEs, which lack the resources to carry out the necessary compliance research or the financial weight to fight legal defences in different countries.
"The industry will need to get a hold of this quickly, or else its going to be caught out," said Mike Pullen, partner at DLA Upstream. "A UK company advertising a buy-one-get-one-free offer on its site will be breaking the law in Germany, for example, where such offers are banned," he explained.