Mutual recognition of national laws under the principle of ‘country of origin’ of the Electronic Commerce Directive

Abstract

For financial services provided by electronic means, the principle of country of origin of the E-Commerce Directive, also known as the ‘internal market’ clause, was advertised as a decisive contribution to legal certainty and one-stop home country control. The Directive established the mutual recognition of the law relating to electronic commerce in the hope to eliminate legal obstacles arising from divergences in legislation and from the legal uncertainty as to which national rules apply to online services. Article 3 of the E-Commerce Directive introduces the ‘country of origin’ rule in the following terms: Each Member State shall ensure that the information society services provided by a service provider established on its territory comply with the national provisions applicable in the Member State in question which fall within the coordinated field. Member States may not, for reasons falling within the coordinated field, restrict the freedom to provide information society services from another Member State. Scope of application of the ‘country of origin’ rule The ‘country of origin’ rule has been drafted in carefully chosen terms of art. It applies to information society services (ISS) and only within the scope of the ‘coordinated field’ as defined by the Directive. Its outer limits are also dictated by the general scope of application of the Directive, the applicable exceptions and the general derogations from the ‘country of origin’ rule as set out in the Annex to the Directive.