This week’s tech law round-up

June 21, 2024

EU Law

European Commission reports on Enforcement and Modernisation Directive compliance

The European Commission has reviewed the Enforcement and Modernisation Directive which updated various EU consumer laws to reflect the digital world and to improve enforcement. The Commission found that all member states have introduced the required minimum fines of 4% of global turnover (or EUR2 million if higher) for infringements subject to cross-border coordinated actions. Some countries have introduced fines of up to 10%. No such fines have yet been imposed and member states have concerns about how to impose them. The Directive requires sellers of goods who announce a price reduction to indicate the lowest price they had applied in the last 30 days. The legislation permits member states to derogate from this requirement in specific circumstances (including for perishable goods) and this has led to national differences, with varying consequences. The report also mentions that there has been an increase in traders making out-of-scope price comparisons with the market (rather than with their own previous prices). The Directive also requires disclosure of ranking parameters used to order online search results. The report states that compliance is low (35% of websites in one study) and enforcement should be improved. In addition, traders providing consumer reviews must tell consumers about if and how they ensure that they are genuine. The report discusses compliance difficulties and encourages increased enforcement activity. The report also considers “dual quality” marketing, unsolicited doorstep selling and commercial excursions, marketplaces’ transparency about contractual parties, personalised pricing, and ticket bots. The report states that it complements the ongoing fitness check of EU consumer law on digital fairness, the final report on the fitness check is due in the second half of 2024.

European Commission and CPC Network secure consumer protection commitments from online marketplace Vinted

Following a dialogue with the European Commission and the national consumer authorities of member states, Vinted, an online marketplace for the second-hand sale of goods, has improved its pricing information to bring its practices more in line with EU consumer protection law. Vinted will now informing consumers upfront about the total price of goods offered for sale on Vinted, including the so-called “buyer protection fee” which is added automatically to every purchase. It will also remove misleading advertisements that create the impression that purchases on Vinted are free of additional charges. In addition, it will inform consumers more clearly about the process to claim a refund under Vinted’s “buyer protection policy” if their purchase does not arrive at its destination. It will also provide more transparent and detailed information about Vinted’s counterfeit review process, including the steps consumers must take to claim a refund in case their purchase turns out to be counterfeit. As well as this, it will provide more transparent and detailed information on the identity verification process that consumers must go through when they want to sell second-hand goods on Vinted. Finally, it will be informing consumers more clearly about Vinted’s review policy, including how average user ratings are calculated, the difference between automated reviews and user-generated reviews, as well as how users can report suspicious reviews. However, Vinted did not agree that it should amend how it informs consumers about delivery fees. If Vinted’s commitments are not implemented properly or if Vinted fails to address concerns raised, national consumer authorities may take measures to enforce compliance, including sanctions.

Council of the EU adopts amendment to EuroHPC to include AI factories

The Council adopted an amendment to the regulation on the European High-Performance Computing joint undertaking to expand its objectives to include the development and operation of “AI factories”. AI factories are entities which provide an AI supercomputing service infrastructure. The amended regulation will make the EU’s supercomputing capacity further available for innovative European start-ups and SMEs to train their AI models and develop their projects. It was published in the Official Journal of the EU on 19 June 2024.

Law Society of Ireland publishes note on e-signatures

The Business Law Committee of the Law Society of Ireland has published an update on the current use and adoption of electronic signatures. The Committee has previously identified barriers to use and items for consideration in relation to e-signatures, which should be considered in each instance. The Committee highlights the following to lawyers. There are diverging views between firms regarding the use of e-signatures on certain documents, in particular, documents that are required to be signed in the presence of a witness, for example, deeds. The usage and status of e-signatures have not been considered by the Irish courts, and so there is an absence of judicial guidance to assist lawyers. Given the diverging views, the absence of judicial guidance, and the other barriers to adoption of e-signatures highlighted in the Guidance Note, lawyers should, as early as possible in a transaction, discuss and agree the planned method of execution of the documents with the solicitors for other parties to the transaction. If it is proposed that any documents will be electronically signed, the parties should carefully consider and agree the type of e-signature that is to be used, for example, simple, advanced or qualified electronic signature. Section 13 of the Irish Electronic Commerce Act 2000 makes the use of an e-signature subject to the consent of the parties. Therefore, neither parties nor their solicitors can insist on a document being electronically signed or that the other party accept an electronically signed document. The Committee is conscious of the issues restricting full adoption of e-signatures. It is preparing a submission to the Irish government, advocating changes to the underlying legislation to better facilitate the use of e-signatures on documents. Updates on this will be provided in due course.