The Directive on alternative dispute resolution (ADR) for consumer disputes and Regulation on online dispute resolution (ODR) for consumer disputes entered into force in July 2013.
What is the problem? Difficult to solve online cross-border shopping disputes
In 2009, only 8% of EU consumers bought goods and services online from a provider from another Member State. This could be down to a lack of trust in online cross-border shopping. About 70% of consumers also think it would be harder to resolve problems when shopping from another Member State. Consumers need reassurance that if things go wrong they can obtain redress, despite the involvement of different jurisdictions.
Alternative Dispute Resolution (both off- and on-line) is an out-of-court mechanism, usually involving a third party, which helps solve problems when the two parties to a dispute cannot agree. ADR can offer cheap, simple and quick redress for consumers and is also a vital tool for maintaining business reputation.
Why is EU action needed? To bolster current ADR schemes
Today, more than 750 ADR schemes exist in EU Member States, but ADR has not yet reached its full potential. Why? Firstly, there are both sectoral and geographical gaps in ADR coverage. Secondly, consumers and businesses often do not know about those schemes. Thirdly, not all businesses are ready to engage in the ADR process.
What has the Commission done so far and what are the next steps?
In November 2011, the Commission issued a package setting a framework for Alternative Dispute Resolution processes at the EU level and creating an EU-wide online dispute resolution system for the e-commerce transactions.
The ODR Regulation entered into force on 9 July 2013 and shall apply as of 9 January 2016. The ODR Regulation provides for the EU Commission to establish a free, interactive website through which parties can inititate ADR in relation to disputes concerning online transactions (offline transactions are excluded). National ADR entities will receive the complaint electronically and seek to resolve the dispute through ADR, using the ODR platform exclusively if they wish.