EC Tests Show Online Single Market Is Broken

Sixty percent of cross-border online shopping attempts fail, because many retailers refuse to ship products to key countries within the European Union, according to an undercover shopping experiment run by the European Commission.

The finding is a double embarassment because uses expect the internet to transcending national borders – and the European nations are working to remove barriers to commerce. To find that the single market is failing online is a blow to the EC goal of having e-commerce flowing freely within the region.

The study placed around 11,000 test orders on items such as books, CDs, cameras and clothes – and only 40 percent were succesful. Latvia, Belgium, Romania and Bulgaria were found to be hit hardest by barriers to online commerce.

“The results of this research are very striking, we now have concrete facts and figures showing the extent to which the European single market for consumers is just not happening in online retail,” said European Commissioner for consumer protection Meglena Kuneva. “Better deals and greater product choice for consumers on our vast European market could be just a click of a mouse away. But in reality online shoppers are still largely confined within national borders.”

Kuneva added that European consumers were being denied better choice and value for money from the restrictions on online commerce. “They deserve better. We must simplify the legal maze that is preventing online traders from offering their goods in other countries,” she said.

The EC said that internet is the fastest growing retail channel and in 2008, 51 percent of EU retailers sold online. However the EC said that the gap between domestic and cross-border e-commerce is widening as a result of barriers to online trade. While the share of EU consumers who shop online grew from 27 percent to 33 percent between 2006 and 2008, the share of those who bought anything online from another EU country was stagnant at 6 percent during the same time period.

“Achieving a Digital Single Market is a top priority for Europe”, said Viviane Reding, EU Commissioner for Information Society and Media. “We won’t have a real Digital Economy until we remove all barriers to online transactions, also for end-consumers. This must be on top of the list of all policy initiatives to re-launch the single market project.”

The EC added that it is taking several measures to improve online commerce across Europe including simplyfying cross-border rules for retailers. “Currently some retailers must deal with several tax authorities, face different national rules on recycling electronic waste, and may end up paying copyright levies in several countries for the same goods,” the EC said in a statement.

Earlier this month, business experts said that online technologies would be boosted by the difficulties small businesses would have getting physical material around the country due to the growing discontent in the UK’s postal service which resulted in strike action last week.