Laws and regulations from Germany and the EU - What will online retailers be facing in 2022?
In this podcast, we talk about laws and regulations at state and EU level that will become relevant for all online sellers this year, or already are. Rarely before have there been so many legislative initiatives on digital and sustainability policy on the agenda. We talk about the most important ones with Oliver Prothmann, Mark Steier and Nikolaus Lindner.
**Important links**
Wortfilter: https://wortfilter.de/
BVOH: https://bvoh.de/
eBay Main Street: https://www.ebaymainstreet.com/
Isabell: Hello and a warm welcome, dear listeners, to a new episode of our eBay Podcast. We’re really pleased that you’re joining us again today. My colleague David and I have prepared a topic today that may sound a little dry, but is super exciting. And for the first time ever, we have three guests joining us all at once today. And I’m delighted to welcome Mark Steier, Oliver Prothmann and Nikolaus Lindner here today. Hello, all three of you!
David: Hello from me too. Today we’re discussing a very important topic, namely which EU regulations and other laws will be coming our sellers’ way this year and what they will mean. We definitely won’t manage a complete list. We all know quite a bit is coming our way. So we’ve picked out the very most important ones from a seller perspective. Mark, let’s start with you. Would you like to tell us a bit about yourself?
Mark Steier: Yes, hello. My name is Mark Steier. I run the blog Wortfilter.de, which some of you may know. There I write about marketplace and e-commerce topics, critically, often very directly and, some say, provocatively. And some of those who cross my path have to toughen up a bit, because I do actually criticize them.
Isabell: Very nicely put. Oliver, would you like to say a few words about yourself too?
Oliver Prothmann: Yes, good day. My name is Oliver Prothmann. I am president of the Bundesverband Onlinehandel and have been in e-commerce for many, many years. My specialty is especially marketplaces and platforms. I once built a marketplace for Telekom, for example, and built up key account management for eBay back then and introduced Paypal in Germany. I’ll just mention the topic of bank statements. The old hands among you will know what that’s about. And for five years now I’ve also officially been taking care of Chinese marketplaces, but also for over seven years now, voluntarily as president of the BVOH. And in that field I’m in a lot of contact with online sellers.
Isabell: Before we hand over the floor any further, could you explain what exactly that is?
Oliver Prothmann: Very gladly. It was 2006, and seven sellers in Dresden founded the Bundesverband Onlinehandel. They were eBay sellers and thought, okay, in principle it would be good to network a bit and work together both towards marketplaces and politics. Yes, for six, seven years now I’ve been doing this as honorary president, and we see ourselves as a representative body for the honorable, medium-sized multi-channel seller. That means we are basically lobbyists, and we’re out and about in Brussels and Berlin trying to influence legislation and regulation so that politicians also understand what the new regulations really mean for the individual online seller.
David: So you definitely know your way around exactly what we want to talk about now.
Mark Steier: And I’d like to jump in right away and just cut in here, because I think Oliver doesn’t advertise himself nearly enough. You can all become members of the BVOH, and many sellers complain that they don’t feel sufficiently represented politically. The BVOH is actually the only association that represents the voice of small and medium-sized sellers. So go to the website BVOH.de and fill out the membership application. It’s not expensive to become a member there, but it’s damn important so that your voice is heard too.
Oliver Prothmann: The next beer’s on you, Mark. Thanks!
David: Then let’s turn finally to Nikolaus. Nikolaus, can you say a very quick word about yourself?
Nikolaus Lindner: Yes, gladly. I’ve been with eBay since 2007, I’m a lawyer by training, and I’m responsible for political communication at eBay.
David: That may not sound entirely clear to many people what you do. Could you say a bit more precisely what your tasks are and how they affect sellers?
Nikolaus Lindner: Very gladly. Yes, Oliver already explained it a little. What does a lobbyist actually do? Because that’s what I am. I’m responsible for interests, not just eBay’s interests, but also the interests of sellers and consumers who use the eBay marketplace. So I deal with political and legal developments and try to influence them in the interests of our sellers. That means if something is causing trouble somewhere and we hear about it from the sellers, then I’m the mouthpiece to politics and tell them that there are abuses. But it’s also the case that we sometimes do this together with the sellers. There are so-called “Fly Ins,” where we go together with the sellers to see politicians and discuss it with them.
Isabell: I find today’s round particularly exciting because all of you, in your own ways or through your work, represent the sellers and our sellers. Could you perhaps name a few successes that you can take credit for and from which sellers benefit?
Mark Steier: I’d like to jump in again briefly and add a little to what Nikolaus said. eBay has a really, really great program. You can google “Ebay Main Street.” There you can also see how eBay represents you internationally in politics. On the one hand, and on the other hand, if you actually want to reach Nikolaus, then follow him on LinkedIn or on Twitter. That way you can contact him quite easily. And really when something is going wrong. And that doesn’t necessarily have to be eBay-related. It can also be that you are generally dissatisfied with sales channels, and here too you can contact Nikolaus and he can pass these things on and also present them at both national and European level.
Nikolaus Lindner: You’ve earned yourself the next beer for that. Wonderful. But maybe I’d add to that straight away, because there is in fact one issue that we learned about especially from sellers, and that I basically knew since my first day at eBay. The issue is the so-called abuse of cease-and-desist letters. That means sellers who meticulously go through the web and find minor violations, for example in the legal notice, then send a chargeable cease-and-desist letter to the competitor, the other seller, and even turn it into a business model. And we have at least managed to get some legal changes now, so that it is much, much harder to send such an unlawful cease-and-desist letter to a competitor. So the business model of cease-and-desist abuse has definitely become much harder.
Isabell: And more on cease-and-desist letters: we recorded a separate episode with our colleague Tillmann for those who still don’t quite know what’s behind it. Feel free to listen in. So, and Mark, you were just about to say something too.
Mark Steier: Yes, especially the issue of cease-and-desist letters is quite important, because it’s now more clearly defined by this legal change, in which eBay also played a role, who is allowed to issue them and who isn’t. The cease-and-desist associations have had their wings clipped a little. On the one hand, but on the other hand it has also given sellers who legitimately want to challenge their competitors’ abuses the opportunity to proceed a little more seriously again.
David: Oliver, what are some things you would count as successes?
Oliver Prothmann: I still remember very well that in 2013 we handed over more than 15,000 signatures from sellers to the EU Commission. Back then it was about sales restrictions. That moment was basically the beginning of my political career in Brussels. And from that in 2016 came the fact that the EU Commission called me, because the then Commission President Jean-Claude Juncker had told a department at the EU Commission, “You need to do something about platforms.” And as a result, a department of the EU Commission called me and said, well, could I come by sometime? Then I sat in a little corner office with five ladies and gentlemen from the EU Commission. They said, so, we need to do something about platforms. But we don’t really know what. We had considered maybe regulating fees. And I said, stop, stop! I don’t think fees should be regulated. The market should decide that. But there are certainly other topics there that we can look into. And from that the so-called P2B regulation came about, P2B for “platform to business.” And we were very heavily involved from the very beginning. And one output from that is, for example, the so-called mediation. That means sellers who have a problem with a marketplace or a platform can, instead of going to court, start mediation with the platform, and we as the BVOH offer that, for example, for many marketplaces and in particular also for eBay. That means if one of the sellers has a problem and can’t solve it on their own with customer service or complaints management, then we’re happy to start mediation in order to facilitate an amicable settlement between both parties, reach a quick solution and avoid having to go to court.
Mark Steier: I think I also need to add something here. What is my success? My success was in 2015/16 that I brought the issue of VAT fraud, or rather the competitive disadvantages of sellers from third countries, by which I especially meant Chinese sellers, into the media spotlight, so that very, very many media outlets reported on it and then, as a result, politics also became interested in the issue. The consequence of that was that we then saw the regulations around VAT reporting for sellers from third countries change.
David: Very nice how you’ve already had so many successes in different areas, which can directly affect sellers. As I said earlier, today we want to talk with you about the laws and regulations from Germany and at EU level that will become relevant for our sellers this year, or already are. And rarely before have there been so many legislative initiatives on digital and sustainability policy on the agenda of the Commission, Parliament and member states as there are now. Of course, we can’t cover all the changes in one episode. So what, in your opinion, are the most important changes for our sellers?
Nikolaus Lindner: Yes, I think very concretely we can first mention the new rules on warranty and the Consumer Sales Directive here. So why is that so important? Warranty means that the consumer can send something back to me and I then either have to repair it or obtain a replacement, and the warranty period, the warranty, used to be two years and still is, but in the past it was the case that after 6 months the burden of proof shifted. That’s a bit of a difficult term, but it actually means that after 6 months I as a seller no longer had to prove that my goods were really flawless. And that has now changed. It’s now one year. That means for one year the consumer can send the goods back and say, “This was defective from the start, the device.” As I said, I then have the option to repair it or obtain a replacement. But only once now as well. So I only get one attempt. That’s brand new since 2022.
Isabell: And you just said the device, meaning the law applies to certain categories. 00:11:43 Nikolaus Lindner: No, it applies quite generally. That’s the general warranty.
Oliver Prothmann: It’s true that we have a tightening of the law here, and it also shows a bit how lawmakers and regulators think, because it’s a consumer right. In this respect, we have legislation here that is now being extended in the interests of consumer rights. And we have that with many regulations. And that always makes it a little harder for us to discuss, because in the end consumer rights are important and consumer rights will also be decisive in many regulations in the future. In this specific case, it’s like this: sellers who of course already have an internal process today to comply with the six-month deadline and offer a warranty there, that period is now being extended by six months to one year. That means sellers have to adapt their internal processes here so that they can guarantee that. And of course they have to do that in order to comply with this law.
Mark Steier: However, I also see it that way that laws sometimes nudge sellers in the right direction. Yes, so it’s true that consumer protection is in my view also sometimes placed very, very high, but on the other hand it is meant to ensure that online commerce actually becomes safer and more transparent for consumers.
David: Oliver, you already mentioned the Consumer Sales Directive. Could you maybe say a little about that? What is it? To what extent is it relevant for sellers to deal with it?
Oliver Prothmann: The Consumer Sales Directive is also a new regulation in the sense that under the law we now have a new definition for digital goods. That means products like mobile phones or music boxes or televisions don’t just have the product itself, but all have a software component and that needs to be updated. And now there is an obligation on the seller’s side that the customer must also be able to update these devices in terms of software. Accordingly, information has to be provided and that is basically a clear step forward in terms of product development that we are seeing. And the legislation results from that: as a seller, you have to give the customer the opportunity to keep these digital goods up to date.
Nikolaus Lindner: And that was also very important because there are of course mixed forms, for example with a television that has a software function. Is that digital now? Is that a physical object now? And it was important that there were new rules.
Mark Steier: I see it as particularly important that the Consumer Sales Directive has strongly intervened in our contract law, in how we as sellers, or how sellers now have to inform buyers here, especially regarding the agreed condition. If you now sell defective items that deviate from the agreed condition, then it is necessary for you to make an individual agreement with your buyers. And that has caused a lot of confusion on the various marketplaces, because sellers weren’t quite sure how to behave now. But here I think, and you can already say this after a few months, the storm has settled down a bit again. Sellers have understood that if they sell a used item, then the term used naturally also includes signs of wear and tear. On the one hand, and if an item is defective, then it is actually defective. That means in practice this agreement on condition is often not even needed.
Nikolaus Lindner: And now I’m going to try to earn myself a beer here, because Mark, huge praise to him too, because he helped clarify that. Because in fact, unfortunately there are also lawyers who use such a new legal change to spread a bit of panic and then sometimes voice interpretations that are particularly difficult. That means what Mark just described, that for example a used good is of course used and you don’t need to explicitly inform people about that again. That wasn’t clear at first. And Mark definitely helped ensure that clarity existed for sellers too.
Mark Steier: The Kölsch is on you. I also think what Nikolaus said here is important. Dear sellers, don’t let these client-fishing law firms and fear-mongering law firms impress you. Basically orient yourselves to publications that are free of vested interests. And those are basically the publications you receive from the various associations. That can definitely serve as orientation, and even if eBay, which they have indeed done very well, has published possibilities for handling it, especially with regard to the Consumer Sales Directive, then those are well thought out and in the sellers’ interests.
Isabell: That’s a very good point again. Thanks for that, Mark. I just heard that the right to repair is also coming as an upcoming change. Would you like to say a few words about that too?
Mark Steier: With the right to repair, we basically have a great opportunity for sellers at first, because it extends a product’s life cycle and creates new business models. And we can already see now, even though this will only come in the future and is still relatively unspecific, that manufacturers are already preparing for it in product development. Important for sellers who now import their own products is that they should also orient themselves accordingly and ask their manufacturers. Hey, what does this look like? But we also have, in the context of returns destruction or returns utilization, another thing that is quite important. We have consumer rights and the desire to protect consumers that stands a little in opposition to what is imposed on sellers. And here we have to make sure we always keep a good balance. And that’s where the associations and federations like the BVOH come in. But also the work of Nikolaus is very important
Nikolaus Lindner: And very concretely, it’s in the coalition agreement. That means we expect a draft law on the right to repair within the next few months at the latest.
Isabell: Are there also legal changes that are basically right at the door? Anything that will be coming soon?
Nikolaus Lindner: Yes, I think if I may jump in briefly. In any case, sellers should take a look at the Packaging Act and the Electrical Equipment Act. The obligations under the Packaging Act already apply anyway. But it will be especially exciting for marketplace sellers from July 1, because then the platforms will check whether the seller complies with the Packaging Act and, specifically, whether they have joined a dual system and registered with the central agency. So these are two obligations that I definitely have as a marketplace seller, as an online seller. And they will be checked by the platforms on July 1, 2022. For the Electrical Equipment Act I have a few more months. That’s January 1, 2023. But I should definitely have both topics on my radar if they affect me, and the Packaging Act will actually affect every seller, so I should definitely keep it in mind.
Mark Steier: I think we also need to look at another aspect here. The aspect that sellers comply with it. I honestly believe, and I’m speaking very positively here, that most sellers will comply with it. But we have every point, and this is particularly going to be a challenge for sellers from third countries, and in my view this legal change is once again a small building block towards competitive fairness for third-country sellers versus European sellers.
Oliver Prothmann: What we see here with the Packaging Register is the issue of platform responsibility. And that is a new topic that the legislator is making use of here. Although in fact the legislator is the one who has to monitor compliance with the laws, responsibility is being shifted to platforms, which I generally think is quite okay. The platform, meaning the marketplace, has to check whether a seller is registered, whether a brand is registered, or whether they are registered with the tax office and and and. That will happen more often in the future. We just need to be a little careful that this platform responsibility doesn’t go so far that the platform itself could actually become the seller. Because at certain points there are of course limits to what the marketplace can really control.
Nikolaus Lindner: And maybe one very important point, which we always strongly advocate for, is of course that harmonization takes place at least at European level. That means especially on the topic of the Packaging Act we have many national solutions. Which makes it particularly difficult for sellers, of course, to keep familiarizing themselves, without a legal department, I’d say, with the individual areas of law, with the individual regulations of the various countries. In some respects, we are unfortunately still a long way from a European single market.
David: We don’t have that much time left now. So I’d like to say let’s pick up a few more topics where you say we should definitely talk about them briefly again. Which regulations do you think are important and should definitely be mentioned?
Oliver Prothmann: Of course, one of my favorite topics is here. As I said earlier, the 15,000 signatures I handed over to the EU Commission in 2013. That was about sales restrictions. That’s exactly the topic we’ve been dealing with for a very long time and where, from our point of view, we still don’t have the right solution. We’d actually have to talk about it much more deeply and much more extensively.
Nikolaus Lindner: Certain things we as a platform obviously can’t do either, because we never actually hold the product in our hands. Another topic that’s important to me is the Vertical Block Exemption Regulation. A dreadful word, pretty long. But it regulates two things at European level, or several things, but two that are really very important. One is: can a brand manufacturer forbid me from selling on marketplaces? The so-called marketplace bans or platform balance issue? The other topic that is being discussed a lot right now is whether I can be told to charge different prices. In other words, can the manufacturer ensure that I have to be more expensive online than if I offer it offline, or vice versa. And those are two topics currently being discussed. There will be changes to the Block Exemption Regulation this summer. We still hope it will go in the right direction. But these are also things that will of course directly affect online retail.
Mark Steier: And I honestly think the topic is so big and also so important for sellers that we should discuss it in a joint appointment in a joint podcast.
David: That sounds good. What other topics are you both currently working on that should definitely be mentioned by the end?
Mark Steier: I still think platform liability is important. In my view, it is far too low. In my opinion there’s a small difference between Oliver’s view and Nikolaus’s as well. A platform is the provider of the business model. That means, especially in the context of international trade, a platform is extremely important for creating fair competition. And here, I think, platforms really need to be held a bit more accountable. That’s one point. The other point: we’ve just seen it in the current data leak that was discovered in the media at an interface service provider. We have a gap in the General Data Protection Regulation, the GDPR. Here, the consumer enters their data on the respective platform, on the marketplace, creates an account, and the platform passes the data on to an interface, relatively uncontrollably. And here we still have a leak. However, I also have to say that the international platforms, especially eBay and another American platform, have solved the problem excellently. You audit applications and you also protect yourselves with a contractual framework. On other European, especially German marketplaces, that is not the case. And here we need to find a solution for sellers, because in the end the sellers are the ones who suffer from it.
Nikolaus Lindner: The trend is definitely moving more and more toward responsibility, on all levels within the supply chain. There is the Supply Chain Act, the Due Diligence Act already at German level, but now also at EU level. So here too, the seller will increasingly have to keep an eye on where my goods come from, how they were made, and so on and so forth.
Oliver Prothmann: The Supply Chain Due Diligence Act is a law that is currently not really relevant for the target group we’re talking about here. Because the legislator has built in certain limits there so that it only applies to companies with several thousand employees. That means that in the next few years this Supply Chain Act will not really be relevant as a draft law for online sellers. But, and I’d like to point this out, what this shows is that sooner or later we will arrive at a legal situation that will also be relevant for online sellers, marketplace sellers who only have two employees or 100 employees. That’s why I can only appeal to all sellers to look at such laws and understand where the legislator wants to go and what they intend to achieve with them. Also in addition to consumer protection. And then become aware that this issue will sooner or later affect you too. So the Supply Chain Act currently has no real relevance, but it clearly shows where the legislator is heading. And that’s why I recommend everyone to look into it and start thinking today about how I structure my company, my products and the like. Because sooner or later I will also be forced to comply with these points through legislation.
Isabell: I think that was a wonderful closing statement. Thank you all three for definitely taking so much time today. I myself learned a great, great deal. We got exciting insights into a wide range of laws. I think this is an episode that you can definitely listen to two, if not three times. And I think it also became clear how important your work is. I think I can also pass on a thank you to the round on behalf of our sellers, or invite you to Kölsch. As you probably know, at the end there’s one more question for you that we brought along. Namely, what was the last thing you bought on eBay. Oliver, perhaps you’d like to start and tell us what your last purchase was.
Oliver Prothmann: Yes, of course I still know that question from my time at eBay. It’s customary there for new members to first tell us how many feedback points they have. That was many, many years ago now. What did I buy? The last thing I bought on eBay was mooring lines. Proper mooring lines for my old boat, with which I cruise around the waters of Berlin. That was my last purchase.
David: Okay, I wasn’t expecting that. But then smooth sailing. Mark, what was the last thing you bought?
Mark Steier: That’s a damn good question. I think I do know what I last bought. I bought socks and underwear. I mean, that’s totally unsexy, but yes, I really like buying fashion on eBay. I find it easy. You can browse better and I like the search.
Isabell: Nice to hear. Nikolaus, what was the last thing you bought?
Nikolaus Lindner: Yes, that’s relatively easy because it was last night, namely the sixth volume of Harry Potter for my daughter. And I also sold a children’s book at the same time, namely The Dragon Coconut.
David: Wonderful. Then we’ll say goodbye for today. We hope you enjoyed the episode as much as we did, and above all that it took away a little of the fear of the regulations coming your way and showed how important it is to deal with them. Many thanks at this point to our dear guests and especially for your time. And with that, we’ll say goodbye for this week.
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