REGULATING ELECTRONIC COMMERCE IN THE NETHERLANDS Coren prins Intellectual property The Dutch legal system of intellectual property rights is highly determ ined by European legislative initiatives. Both the European Directive on software protection and the European Directive on Data base protection have been implemented into Dutch law. This implied an amendment of the Copyright Law as well as the introduction of a sui generis aw on the protection for those databases that do not meet the requirement of originality under the Dutch Copyright Law. Since the introduction of the new legislative measures, court rulings have been issued on several of their provisions. In particular the case lw on data base protection is of interest, since the legislative framework merely works with vague protection criteria such as substantial investment and leaves their specific interpretation up to the courts. In general, it becomes clear that apply ing the criterion of substant al is not a matter of simple reasoning. The court rulings show different interpretations, whereby the more recent rulings of the courts of appeal have shown to be more strict as regards the criterion thus requiring considera ble effort from the relevant party to qualify for substantial investment 2 At present, the Dutch legislature is preparing for yet another series of amendments to the Copyright Law. As known,on I May 1999, in response to the amendments submitted by the European Parliament, the European Commission issued a draft copyright directive. The final text of this directive was adopted in 2001. The Directive claims that it a ms to adjust and complement the existing EU framework on copyright and related rights to respond to the new challenges of technology and the information society, to the benefit of both right holders and users. Furthermore, it envisages establishing a level play ing field for copyright protection in the new environment, and in particular covering the reproduction right, the communication to the public right, the distribution right, and legal protection of anti-copy ingand rights managementsystems Center for Law, PublE Adminstration and Informatisation. Coren Prins partic pates in a large research proect on e-commerce related matters, establshed by the University of Tilburg and the Techncal University of Eindhoven under the Co-operation Centre of Brabant Universities shttp://www.urvtnl/sobu> The Software Directive was mplemented n 1994 (Stb. 1994, 521) The Database Directive was implemented in 1999(Stb. 1999, 303) District Court Den Haag, 14 January 2000, Computerrecht, 2000/3, p. 154; Dstrict Court Haarlem, 21 April 2000, Computerrecht 2000A4, p 209, Dstrict Court Rotterdam, 22 August 2000, Commputerrecht 2000/5, p. 259; Ditrict Court Den Haag, 12 September 2000, Computerrecht 20006, p. 297; Court of Appeal Den Haag, 21 December 2000, Mediafonam 2001/2, p. 87. See for a dicussion of several rulng: P B Hugenholtz, The New Database Right: Early Case Law from Europe,FordhamUniversitySchoolofLawNewYorkapril2001,availableat:. Amended Proposal for a European Parliament and Council directive on the harmonisation o ertain aspects of copyright and related rights in the Informaton Society,( draft copyright directive ) COM(99)250fmal, OJC 1806, 25.06. 1999. 200129C,OJLl67/5,22062001
REGULATING ELECTRONIC COMMERCE IN THE NETHERLANDS Corien Prins* VI 1 Intellectual property The Dutch legal system of intellectual property rights is highly determined by European legislative initiatives. Both the European Directive on software protection and the European Directive on Database protection have been implemented into Dutch law. This implied an amendment of the Copyright Law as well as the introduction of a sui generis law on the protection for those databases that do not meet the requirement of originality under the Dutch Copyright Law. 1 Since the introduction of the new legislative measures, court rulings have been issued on several of their provisions. In particular the case law on database protection is of interest, since the legislative framework merely works with vague protection criteria such as substantial investment and leaves their specific interpretation up to the courts. In general, it becomes clear that applying the criterion of substantial is not a matter of simple reasoning. The court rulings show different interpretations, whereby the more recent rulings of the courts of appeal have shown to be more strict as regards the criterion thus requiring considerable effort from the relevant party to qualify for substantial investment . 2 At present, the Dutch legislature is preparing for yet another series of amendments to the Copyright Law. As known, on 21 May 1999, in response to the amendments submitted by the European Parliament, the European Commission issued a draft copyright directive3 . The final text of this directive was adopted in 2001.4 The Directive claims that it aims to adjust and complement the existing EU framework on copyright and related rights to respond to the new challenges of technology and the information society, to the benefit of both right holders and users. Furthermore, it envisages establishing a level playing field for copyright protection in the new environment, and in particular covering the reproduction right, the communication to the public right, the distribution right, and legal protection of anti-copying and rights management systems. * Center for Law, Public Administration and Informatisation. Corien Prins participates in a large research project on e-commerce related matters, established by the University of Tilburg and the Technical University of Eindhoven under the Co-operation Centre of Brabant Universities 1. The Software Directive was implemented in 1994 (Stb. 1994, 521). The Database Directive was implemented in1999 (Stb.1999, 303). 2. District Court Den Haag, 14 January 2000, Computerrecht, 2000/3, p. 154; District Court Haarlem, 21 April 2000, Computerrecht 2000/4, p. 209; District Court Rotterdam, 22 August 2000, Computerrecht 2000/5, p. 259; District Court Den Haag, 12 September 2000, Computerrecht, 2000/6, p. 297; Court of Appeal Den Haag, 21 December 2000, Mediaforum 2001/2, p. 87. See for a discussion of several rulings: P.B. Hugenholtz, The New Database Right: Early Case Law from Europe , Fordham University School of Law, New York, april 2001, available at: . 3. Amended Proposal for a European Parliament and Council directive on the harmonisation of certain aspects of copyright and related rights in the Information Society, ( draft copyright directive ), COM(99) 250final, OJ C 180/6, 25.06.1999. 4. 2001/29/EC, OJ L 167/15, 22.06.2001
PRINS In anticipation of the European Directive, the Dutch govemment opened in 2000avirtualdiscussiononitssitewww.minjust.nl/auteursrecht.Here,companies representative organisations, citizens and other interested parties could express their opinion on the position and future of copyright in an online environment. In providing for this online discussion, the Dutch legislature intended to start the implementation process of the Directive in an early phase and collect the different views on society on the European measures In mplementing the European rules, the Dutch legislature is advised by a special commission on copyright matters, Commissie Auteursrecht. Since its establishment, this commission has published several reports on among others the effects of the European copyright directive on the Dutch system. Both the commission as well as the dutch govemment took a rather critical opinion on the European Directive, in particular the proposed articles 5(provisions on exceptions to the exclusive rights of reproduction and communication to the public, including the right to make available )and 6 (protection of technological measures against circumvention) of the Directive. In general, the Dutch government was not in favor of lim iting several of the traditional exceptions to the exclusive rights of users. In December 2001, the dutch cabinet approved a Bill that implements the European Copyright Directive. It was send to the Raad van State for comments, after which it is expected to be send to Parliament in 2002. Prior to the cabinet s approval, the Minister of Justice send a letter to Parliament in which he took a position on an earlier advice of the Commissie Auteursrecht as well as a draft proposal for the implementation of the Directive Dutch case aw has not dealt extensively with the copyright status of hyperlinking. In the August 2000 ruling on the website Kranten. com, the court found that linking and deeplinking on a frequent basis does not constitute an infringement of copyright. However, a company that links to a website it knows to contain infringing copyright material, acts not in accordance with the aw. 9 Although not dealing with the status of hyperlinking, the November 2001 court decision in KaZaa against the Dutch copyright organisation Buma/Stemra is of interest, because it shows that the Amsterdam court ruled in line with the US Napster decision thatnew techniques for distributingmusic on the Internet infringe copyright law. 0 At present, there is some debate in Dutch legal doctrine on the status of patent protection for e-commerce related inventions. As known, much of the technology underly ing online commerce, whether in the form of equipment or computer software, is subject to patent protection. While the granting of patents for computer See: Commisse Auteursrecht Advies over auteursrecht, naburige rechten en de nieuwe meda, The Hague, 18 August 2998. The report s dscussed by EJ. Arkenbout im Informatierecht/AMI 1998/9, p. 161 ee: EJ. Arkenbout, Richtliin auteursrecht ennaburige rechten in de nformatemaatschappij naar een Europees auteursrecht, Computerrecht 2001 B pp. 126-130. TK 2001-2002. 26538nr. 5. Voor het advies van de Commissie Auteursrecht evenals een roorontwerpvanwetljn-nr.Ad6395)
PRINS 2 In anticipation of the European Directive, the Dutch government opened in 2000 a virtual discussion on its site www.minjust.nl/auteursrecht. Here, companies, representative organisations, citizens and other interested parties could express their opinion on the position and future of copyright in an online environment. In providing for this online discussion, the Dutch legislature intended to start the implementation process of the Directive in an early phase and collect the different views on society on the European measures. In implementing the European rules, the Dutch legislature is advised by a special commission on copyright matters, Commissie Auteursrecht. Since its establishment, this commission has published several reports on among others the effects of the European copyright directive on the Dutch system.5 Both the commission as well as the Dutch government took a rather critical opinion on the European Directive, in particular the proposed articles 5 (provisions on exceptions to the exclusive rights of reproduction and communication to the public, including the right to make available ) and 6 (protection of technological measures against circumvention) of the Directive. In general, the Dutch government was not in favor of limiting several of the traditional exceptions to the exclusive rights of users.6 In December 2001, the Dutch cabinet approved a Bill that implements the European Copyright Directive. It was send to the Raad van State for comments, after which it is expected to be send to Parliament in 2002.7Prior to the cabinet s approval, the Minister of Justice send a letter to Parliament in which he took a position on an earlier advice of the Commissie Auteursrecht as well as a draft proposal for the implementation of the Directive.8 Dutch case law has not dealt extensively with the copyright status of hyperlinking. In the August 2000 ruling on the website Kranten.com, the court found that linking and deeplinking on a frequent basis does not constitute an infringement of copyright. However, a company that links to a website it knows to contain infringing copyright material, acts not in accordance with the law.9 Although not dealing with the status of hyperlinking, the November 2001 court decision in KaZaA against the Dutch copyright organisation Buma/Stemra is of interest, because it shows that the Amsterdam court ruled in line with the US Napster decision that new techniques for distributing music on the Internet infringe copyright law.10 At present, there is some debate in Dutch legal doctrine on the status of patent protection for e-commerce related inventions. As known, much of the technology underlying online commerce, whether in the form of equipment or computer software, is subject to patent protection. While the granting of patents for computer 5. See: Commissie Auteursrecht, Advies over auteursrecht, naburige rechten en de nieuwe media , The Hague, 18 August 2998. The report is discussed by E.J. Arkenbout in Informatierecht/AMI 1998/9, p. 161. 6. See: E.J. Arkenbout, Richtlijn auteursrecht en naburige rechten in de informatiemaatschappij: naar een Europees auteursrecht , Computerrecht 2001/3, pp. 126-130. 7. . 8. TK 2001-2002, 26538, nr. 5. Voor het advies van de Commissie Auteursrecht evenals een voorontwerp van wet: 9. District Court Den Haag, 9 June 1999, Computerrecht 1999/4, p. 200. 10. District Court Amsterdam, 29 November 2001 (KaZaA versus Buma/Stemra). Available at: LJN-nr. AD6395)
REGULATINGELECTRONIC COMMERCE IN THE NETHERLANDS programs which produce a commercially useful outcome is no longer an overly ontentious issue, attention has turned to the patent bility of business methods implemented by means of digital technology. Also in the Netherlands, questions arise as to whether business methods should be granted patent protection. No case erall, the conclusion is justified that intellectual property rights in the technology which supports electronic commerce, the materials which are made availa ble or transmitted online in digital form and the identifiers used by individuals and entities trading on the Internet have been an important focus of legalattention at the Dutch national level in recent years. Together with the issue of privacy(which is being dealt with undemeath in this report )intellectual poperty rights is an issue of high importance on the Dutch policy agenda Internet governance Internet Governance is a topic that is often addressed in reltion to domain names From, this perspective the issue has not draw much attention at the Dutch policy level Court proceedings are, however, countless. At various instances, the Dutch courts are issuing rul ings on the status of doma in names under the dutch trademark awas well as the rules on unfair competition. In general, these rulings shows a very unfriendly attitude toward the so-called domain grabbers. A well-known doma in grabber in their tra demark and subsequently held to violate the rights of these companies. 3 the Netherlands is Namespace, which was sued by various com panies for violat The Dutch State itself was also involved in court cases, try ing to protect its right to various govemment-related terms such as troonrede. nl, prinsjesdagnl regeringnl en miljoenennota. nl. The court of Amsterdam ruled in favor of the Dutch State. In comparison with other years, the 2001 number of court rulings on domain name grabbing was limited In the Netherlands, the mana gement of doma in names is under the e resTo of the Stichting Intemet Domeinnaamregistratie Nederand (SIDN). It is a private non-govenmental entity. Thusfar, the position of this organisation is undisputed. No such extensive debate as on the intemational forum regarding the constitutional and organisational status of ICANn is being held in the Netherlands with respect SIDN. Also, only a handful of publications point to regulatory questions surrounding Intemet doma in name govemance. 4 Under the present registration procedure for the See for a recent analysis: D. W.F. Verkade, D.J.G. Visse, LD. Brunng, Ruimere octroo iering van computerprogmmma s techmicalityof reohtie?, ITeR- recks no 37, The Hague 2000. See also Parliamentary Papers, nr. 216 See for a discuss ion on the protecton of software and bus ness methods under the Dutch patent system: T. Overdijk, Octrooirecht en ICT, Recht en Infnmatietechnobgie. Handboek oor iken beleid, chapter 7H, February 2001 13 Seeonalltheserulingshttp://www.domeinnaam-jurisprudentie.nl ee: E. Dommering, Het adres in cyberspace heeft geen plats, ITeR-reeks no. 15, Deventer 1999, pp 3-24; T. Clarkson, H. FEcher, R Hes, J. Smits, Mechanisnen oor de verdeling lan telecommunicatientammers, ITeR-reeks no. 15, Deventer 1999, pp 27-179.N. Sitompoel, et. AL
REGULATING ELECTRONIC COMMERCE IN THE NETHERLANDS 3 programs which produce a commercially useful outcome is no longer an overly contentious issue11, attention has turned to the patentability of business methods implemented by means of digital technology. Also in the Netherlands, questions arise as to whether business methods should be granted patent protection. No case law is, however, available.12 Overall, the conclusion is justified that intellectual property rights in the technology which supports electronic commerce, the materials which are made available or transmitted online in digital form and the identifiers used by individuals and entities trading on the Internet have been an important focus of legal attention at the Dutch national level in recent years. Together with the issue of privacy (which is being dealt with underneath in this report) intellectual property rights is an issue of high importance on the Dutch policy agenda. 2 Internet governance Internet Governance is a topic that is often addressed in relation to domain names. From, this perspective the issue has not draw much attention at the Dutch policy level. Court proceedings are, however, countless. At various instances, the Dutch courts are issuing rulings on the status of domain names under the Dutch trademark law as well as the rules on unfair competition. In general, these rulings shows a very unfriendly attitude toward the so-called domain grabbers . A well-known domain grabber in the Netherlands is Namespace, which was sued by various companies for violating their trademark and subsequently held to violate the rights of these companies.13 The Dutch State itself was also involved in court cases, trying to protect its right to various government-related terms such as troonrede.nl , prinsjesdag.nl , regering.nl en miljoenennota.nl . The court of Amsterdam ruled in favor of the Dutch State. In comparison with other years, the 2001 number of court rulings on domain name grabbing was limited. In the Netherlands, the management of domain names is under the responsibility of the Stichting Internet Domeinnaamregistratie Nederland (SIDN). It is a private, non-governmental entity. Thusfar, the position of this organisation is undisputed. No such extensive debate as on the international forum regarding the constitutional and organisational status of ICANN is being held in the Netherlands with respect to SIDN. Also, only a handful of publications point to regulatory questions surrounding Internet domain name governance.14 Under the present registration procedure for the 11. See for a recent analysis: D.W.F. Verkade, D.J.G. Visser, L.D. Bruining, Ruimere octrooiering van computerprogramma s: technicality of revolutie?, ITeR-reeks no. 37, The Hague 2000. See also: Parliamentary Papers, nr. 21670. 12. See for a discussion on the protection of software and business methods under the Dutch patent system: T. Overdijk, Octrooirecht en ICT , Recht en Informatietechnologie. Handboek voor rechtspraktijk en beleid, chapter 7H, February 2001. 13. See on all these rulings: http://www.domeinnaam-jurisprudentie.nl. 14. See: E. Dommering, Het adres in cyberspace heeft geen plaats, ITeR-reeks no. 15, Deventer 1999, pp. 3-24; T. Clarkson, H. Fischer, R. Hes, J. Smits, Mechanismen voor de verdeling van telecommunicatienummers, ITeR-reeks no. 15, Deventer 1999, pp 27-179. N. Sitompoel, et. Al
PRINS top level doman nl, foreign companies and citizens cannot file for a domainname In a report, published by Sidn in Novem ber 2001, it is proposed to extend the registration of nI doma ins to foreigners. Another proposal is to introduce a dispute resolution system similar to the well known UDRP-procedure for the nl domain names. At present, domain name conflicts can only be solved in The Netherland through an formal court procedure(kort geding) A more fundamental debate on Intemet govemance is that on the required regulatory framework for commercial and other activities on the Internet and the organizations, existing or yet to be formed, which are to develop, implement and enforce those principles. Should the Internet be treated asa separate jurisdiction, is a new international governance structure required and what kinds of models of govemance should apply? The answer to these questions centers in the Netherlands around the question whether legislative projects should be based on the adage"what holds offline should also hold online" On severaloccasions, the Dutch govemment has held that in discussions on how to regulate developments like electronic commerce, the Internet, and, more in general, the electronic highway, the leitmotiv should be: what holds offline, should in principle also hold online. In the 1998 Memorandum on Legislation for the Electronic Highway, the cabinet puts it thus: In the first pace, the council of ministers chooses as a starting point that the noms that hold for the electronic highway must be the same as the noms in the physical world. o In some situations, however, this starting point can not be met. For example, in situations in which the traditional legal provisions result in problems when applied to an electronic environment(e.g. in the areas of consumer protection or private international law), one will have to consider whether other rules have to apply. Besides, existing and future European and intermational agreements sometimes do not leave room maintaining the adage. 7 Thus, the desire to create an international approach t certain ICT-related problems will result in different rules apply ing to the offline and the online worlds 1& Thus, a more detailed look at the legislative developments in the Nethera nds as well as abroad shows that it is getting increasingly problematic to uphold the adage consistently when dealing with the various specific problems. The ada ge appears to have to taste defeat when concrete topics are worked out, because given certain interests (such as consumer protection, legal certa inty, promoting electronic commerce) specific rules for the online world are being introduced nonetheless One can also perceive this tendency at an intemational level (in any case, in the n, ITeR-reeks nr. 46, The Hague 2001 15 niEindrapportdOmeinnaamdebat.Availableat: See, for instance, the Miniter of Justice s answer to questions by the standing committee on 18. Nota Weggeving voorde elektronische srehveg, TK (Parliamentary Papers)1997-1998, 25880
PRINS 4 top level domain .nl, foreign companies and citizens cannot file for a domainname. In a report, published by SIDN in November 2001, it is proposed to extend the registration of .nl domains to foreigners.15 Another proposal is to introduce a dispute resolution system similar to the well known UDRP-procedure for the .nl domain names. At present, domain name conflicts can only be solved in The Netherland through an formal court procedure (kort geding). A more fundamental debate on Internet governance is that on the required regulatory framework for commercial and other activities on the Internet and the organizations, existing or yet to be formed, which are to develop, implement and enforce those principles. Should the Internet be treated as a separate jurisdiction, is a new international governance structure required and what kinds of models of governance should apply? The answer to these questions centers in the Netherlands around the question whether legislative projects should be based on the adage "what holds offline, should also hold online". On several occasions, the Dutch government has held that in discussions on how to regulate developments like electronic commerce, the Internet, and, more in general, the electronic highway, the leitmotiv should be: what holds offline, should in principle also hold online. In the 1998 Memorandum on Legislation for the Electronic Highway, the cabinet puts it thus: In the first place, the council of ministers chooses as a starting point that the norms that hold for the electronic highway must be the same as the norms in the physical world. 16 In some situations, however, this starting point can not be met. For example, in situations in which the traditional legal provisions result in problems when applied to an electronic environment (e.g. in the areas of consumer protection or private international law), one will have to consider whether other rules have to apply. Besides, existing and future European and international agreements sometimes do not leave room for maintaining the adage.17 Thus, the desire to create an international approach to certain ICT-related problems will result in different rules applying to the offline and the online worlds.18 Thus, a more detailed look at the legislative developments in the Netherla nds as well as abroad shows that it is getting increasingly problematic to uphold the adage consistently when dealing with the various specific problems. The adage appears to have to taste defeat when concrete topics are worked out, because given certain interests (such as consumer protection, legal certainty, promoting electronic commerce) specific rules for the online world are being introduced nonetheless. One can also perceive this tendency at an international level (in any case, in the (Zelf)regulering van nummers en domeinnamen, ITeR-reeks nr. 46, The Hague 2001. 15. .nl Eindrapport Domeinnaamdebat. Available at: . 16. Nota Wetgeving voor de elektronische snelweg, TK (Parliamentary Papers) 1997-1998, 25880, nrs. 1-2, p. 114. All Parliamentary Papers are available in Dutch at 17. See, for instance, the Minister of Justice s answer to questions by the standing committee on judicial affairs in: TK (Parliamentary Papers) 1999-2000, 26538, nr. 2, p. 5. 18. Nota Wetgeving voor de elektronische snelweg, TK (Parliamentary Papers) 1997-1998, 25880, nrs. 1-2, p. 114
REGULATINGELECTRONIC COMMERCE IN THENETHERLANDS European Union). 19 Therefore, as is argued in Dutch legal doctrine, it is unwise, when thinking bout regulation, to hold on to the concrete rules of the offline world as a starting point. The approach should not so much equa te in principle the concrete rules of the online world with those of the offline world, but rather, the level of protection in both worlds should be the same. Thus, the government should pay much more attention to the interests and goals that(should) underpin the rules of the offline and online worlds respectively. The question one is to pose oneself is why certa in rules prevail in the offline world and why these rules should be ma inta ined in the online world If the online world introduces specific differences with the offline world, one will have to analyse the effect of these differences on the existing rules, considering the rationale of these rules Rather than automatically transposing the rules of the physical world to the online world, the legislator should be creative in finding solutions to the pecific problems of the online world. It is this conclusion that was a lso drawn by the Dutch legislature in its May 2000 policy document on internationalisation and aw.20 An interesting point that should be mentioned here is that the offline =online approach can of course also work the other way around: what holds online, must also hold offline. In short the legislator will have to observe the interaction betweer the rules of the two worlds, and not merely argue from out of the framework of the offline-world rules a point that should be mentioned here is that as regards the discussion whether a general Lex Internet, an overall Act that would regulate various issues related to the Intemet, should be introduced, the Dutch govemment takes the position that a Lex Intemet is not expedient for the moment, but that it is an interesting option in the longer run.2 Finally, it should be mentioned here that, based on the work of Lawrence Lessig, several Dutch publications ha ve recently dea lt with the issue that the technology and architecture which make up the intemet can, in themselves, act as a regulator of activ ity on the internet. 22 3 The digital divide As regards the digital divide, there is some discussion on the access of indiv iduals to ICTand their use of the Internet. However, the prime focus of the discussions in See for an extensive analys s and discussion of varous countries: EJ. Koops, J.E.J. Prns, M hellekens, S. Girath, E. Schreuders, Governments on Intemational iation and ICT Law. The positions of Germany, France, the United Kingdom, and the United States, in: ICT Law and Internationalisation A Suney of Govemment views(EI Koops, J.EJ Pns, H Himans, eds. h Kluwer Lawlntemational, The Hague 2000, pp. 73-192 20. Notitie Intemationalserng en recht m de Informatemaatschappij, TK(Parliamentary Papers) 1999-200,25880,mr.10,p.13 Nota Wetgeving voor elektronische smehweg, TK1997-1998, 25880, nrs. 1-2, P 1 19 K.J. Koelman, Bescherming van technische voorzieningen, AM 2001/1, pp 9-15; B van Klink, J.E.J. Prns, W. Witteveen, Het concepmuele tekon, Infodrome/Amsterdam University Press
REGULATING ELECTRONIC COMMERCE IN THE NETHERLANDS 5 European Union).19 Therefore, as is argued in Dutch legal doctrine, it is unwise, when thinking about regulation, to hold on to the concrete rules of the offline world as a starting point. The approach should not so much equate in principle the concrete rules of the online world with those of the offline world, but rather, the level of protection in both worlds should be the same. Thus, the government should pay much more attention to the interests and goals that (should) underpin the rules of the offline and online worlds respectively. The question one is to pose oneself is why certain rules prevail in the offline world and why these rules should be maintained in the online world. If the online world introduces specific differences with the offline world, one will have to analyse the effect of these differences on the existing rules, considering the rationale of these rules. Rather than automatically transposing the rules of the physical world to the online world, the legislator should be creative in finding solutions to the specific problems of the online world. It is this conclusion that was also drawn by the Dutch legislature in its May 2000 policy document on internationalisation and law.20 An interesting point that should be mentioned here is that the offline = online approach can of course also work the other way around: what holds online, must also hold offline . In short, the legislator will have to observe the interaction between the rules of the two worlds, and not merely argue from out of the framework of the offline-world rules. A point that should be mentioned here is that as regards the discussion whether a general Lex Internet, an overall Act that would regulate various issues related to the Internet, should be introduced, the Dutch government takes the position that a Lex Internet is not expedient for the moment, but that it is an interesting option in the longer run.21 Finally, it should be mentioned here that, based on the work of Lawrence Lessig, several Dutch publications have recently dealt with the issue that the technology and architecture which make up the internet can, in themselves, act as a regulator of activity on the internet.22 3 The digital divide As regards the digital divide , there is some discussion on the access of individuals to ICT and their use of the Internet. However, the prime focus of the discussions in 19. See for an extensive analysis and discussion of various countries: E.J. Koops, J.E.J. Prins, M. Schellekens, S. Gijrath, E. Schreuders, Governments on Internationalisation and ICT Law. The positions of Germany, France, the United Kingdom, and the United States, in: ICT Law and Internationalisation A Survey of Government views (E.J. Koops, J.E.J. Prins, H. Hijmans, eds.), Kluwer Law International, The Hague 2000, pp. 73-192. 20. Notitie Internationalisering en recht in de Informatiemaatschappij, TK (Parliamentary Papers) 1999-2000, 25880, nr. 10, p. 13. 21. Nota Wetgeving voor de elektronische snelweg, TK 1997-1998, 25880, nrs. 1-2, p. 119. 22. K.J. Koelman, Bescherming van technische voorzieningen , AMI 2001/1, pp. 9-15; B. van Klink, J.E.J. Prins, W. Witteveen, Het conceptuele tekort, Infodrome/Amsterdam University Press 2001
PRINS the Netherlands is not so much on the infra structure but rather on the content as regards the infrastructure, the Dutch Telecommunications Law provides for several mechanisms that ensure that Internet access is broadly a vailable on an equitable and reasonable basis. Also, the Dutch govemment as well as the supervising authorities OPTA and NMa published documents dealing with Intemet access. 23 The documents and discussions resulted by the end of 2001 in a Bill on ensuring accessibility to and availa bility of Intemet 4 The Bill was approved by the dutch cabinet and send for consideration to the raad van state In the Netherlands. access to internet and thus internet content is considered essential for the sound development of the information society. Here, the Dutch govemment in particular focuses on access to public sector infommation. It is argued that without such access some citizens and consumers will not be a ble to reap the enefits of the infomation society. Also, access to public sector infomation, is regarded to bean mportant instrument in enhancing citizens and consumers rights in the infomation society. Under dutch aw rights citizens have been provided with access rights to infomation being held by the public sector. ICTallows public sector bodies to provide access to a massive amount of infomation, enabling citizens to exercise their legit imate(democratic)rights more effectively. Simultaneously, public sector bodies discover that the (large repositories of) information they hold, represent a vast economic value, tempting them to exploit their resources. These two developments can easily lead to tensions. Also, other interests such as intellectual property rights and privacy rights, may hinder the free a vailability of public sector information In 2000, the Dutch government issued several policy documents on this matter 25 The documents have chos information must be easily and widely accessible and avalable, In particular the that ICT(in the long tem) will have on the relationship between the government and the citizen Also, the Comm ission on Constitutional Rights in the Digital Era proposed in its 2000 report to codify a new fundamental right on access to and openness as well as availa bility of govemment infomation. Finally, in August 2001, another govemment advisory commission (the Commission allage) stressed the importance of a transparent andaccessible public sector. The publication ofall public ector infomation on the Internet, could be an important instrument in establishing Kabel en consument marktwerk en digitalserng TK(Parliamentary Papers)1999-2000, TK 2000-2001. 27008 nrs. 1-18. Consultation document ofoPTA and Nr Naar een optmale beschkbaarheid van overheidsinfomatie, TK 1999-2000, 26387, nr. 7: Nota Contract met de toekomst, TK(Parliamentary Papers)1999-2000, 26387, nr. 8 The afore-mentioned document Contract mete toekomst For an over iew and d scuss ion of the vanous Dutch policy plans, see the reportpublshed by the Rathenau Institut(an advsory body of the Parlament): M. de vries, et elektronische overheidsinformatie het nieinre milennium in, Rathenau Instituut, mei 2001 28 Commission on Constitutional Rights in the Digital Era, Report, May 200
PRINS 6 the Netherlands is not so much on the infrastructure, but rather on the content. As regards the infrastructure, the Dutch Telecommunications Law provides for several mechanisms that ensure that Internet access is broadly available on an equitable and reasonable basis. Also, the Dutch government as well as the supervising authorities OPTA and NMa published documents dealing with Internet access.23 The documents and discussions resulted by the end of 2001 in a Bill on ensuring accessibility to and availability of Internet.24 The Bill was approved by the Dutch cabinet and send for consideration to the Raad van State. In the Netherlands, access to Internet and thus Internet content is considered essential for the sound development of the information society. Here, the Dutch government in particular focuses on access to public sector information. It is argued that without such access some citizens and consumers will not be able to reap the benefits of the information society. Also, access to public sector information, is regarded to be an important instrument in enhancing citizens and consumers rights in the information society. Under Dutch law rights citizens have been provided with access rights to information being held by the public sector. ICT allows public sector bodies to provide access to a massive amount of information, enabling citizens to exercise their legitimate (democratic) rights more effectively. Simultaneously, public sector bodies discover that the (large repositories of) information they hold, represent a vast economic value, tempting them to exploit their resources. These two developments can easily lead to tensions. Also, other interests such as intellectual property rights and privacy rights, may hinder the free availability of public sector information. In 2000, the Dutch government issued several policy documents on this matter.25 The documents have chosen an ambitious perspective: all government information must be easily and widely accessible and available. In particular the policy document Contract with the future 26 provides a clear analysis of the impact that ICT (in the long term) will have on the relationship between the government and the citizen.27 Also, the Commission on Constitutional Rights in the Digital Era proposed in its 2000 report28 to codify a new fundamental right on access to and openness as well as availability of government information. Finally, in August 2001, another government advisory commission (the Commission Wallage) stressed the importance of a transparent and accessible public sector. The publication of all public sector information on the Internet, could be an important instrument in establishing 23. Kabel en consument: marktwerking en digitalisering , TK (Parliamentary Papers) 1999-2000, TK 2000-2001, 27008, nrs. 1-18. Consultation document of OPTA and Nma. 24. . 25. Naar een optimale beschikbaarheid van overheidsinformatie , TK 1999-2000, 26387, nr. 7; Nota Contract met de toekomst , TK (Parliamentary Papers) 1999-2000, 26387, nr. 8. 26. The afore-mentioned document Contract met de toekomst . 27. For an overview and discussion of the various Dutch policy plans, see the report published by the Rathenau Institut (an advisory body of the Parliament): M. de Vries, Met elektronische overheidsinformatie het nieuwe millennium in, Rathenau Instituut, mei 2001. 28. Commission on Constitutional Rights in the Digital Era, Report, May 2000
REGULATINGELECTRONIC COMMERCE IN THENETHERLANDS this transparency. 29 Validity and security of electronic(commercial) transactions Electronic commercal transactions are different from tradit ional commerca activities in that they no longer require the exchange of paper-based documents and written signatures. Electronic transactions are marked out by various unprecedented features, which companies, indiv iduals and regulators to their fascinationand dismay annot tackle by means of the traditional paradigms. The well-known paradigms have all developed along the lines of physical and local bounds of space and time These confines have, however, lost their meaning in a society that is characterised by timeless, borderless and virtual communication and interaction. Thus, legislative bodies at both an international and national level are working on a new regulatory framework to overcome the new problems and thus provide for trust and legal certa inty with respect to electronic transactions From this perspective, the European Union has adopted several Directives ddressing e-commerce reated problems, such as the formation of contracts that take place by means of digital communications. Also, a legal framework has been made towards the development of rules on the recognition of electronic signatures that meet certain criteria. All European measures are at present being implemented into Dutch law, meaning that either a bill is pending in Parliament, or a proposed text is being considered in governmental bodies 4.1 Signatures On 17 May 2001, the Bill on the implementation of the European Electronic Signatures Directive was put forward to the Dutch Parliament. 30 The Bill introduces a legal framework for electronic signatures that is to amend the civil Code, the Telecommunications Law and the lawon Econom ic Crimes In line with the European Directive, the provisions are designed to ensure that an electronic signature cannot be lega lly discrim inated aga inst solely on the ground that it is in electronic form. Interestingly, the Dutch proposal includes a more broad and open provision concerning the legal recognition of electronic signature compared to the European Directive. In defining electronic signatures the Dutch provision follows the example of the UNICTRAL Model Law on Electronic Commerce. Already in March 1998, a special working group of the Ministry of Justice had advised to introduce the so-called functiona lly equivalent appoach taken by UNCITRAL in its Model Law. Key objective of this approach is that the electronic document and the electronic signature must be functionally equivalent or In other words, fulfill the same relevant functions as a paper document and a manua signature. Amongst these functions are: the evidental function, the infomation and communicationfunction and the protection of third parties In the Netherlands, the establishment of a voluntary accreditation scheme for CAs is at present under consideration. CA's wishing users of their certificates to See:<http://wwwminaznl/wallage 30 TK (Parliamentary Papers)2000-2001, 27743, nrs. 1-2
REGULATING ELECTRONIC COMMERCE IN THE NETHERLANDS 7 this transparency.29 4 Validity and security of electronic (commercial) transactions Electronic commercial transactions are different from traditional commercial activities in that they no longer require the exchange of paper-based documents and written signatures. Electronic transactions are marked out by various unprecedented features, which companies, individuals and regulators to their fascination and dismay cannot tackle by means of the traditional paradigms. The well-known paradigms have all developed along the lines of physical and local bounds of space and time. These confines have, however, lost their meaning in a society that is characterised by timeless, borderless and virtual communication and interaction. Thus, legislative bodies at both an international and national level are working on a new regulatory framework to overcome the new problems and thus provide for trust and legal certainty with respect to electronic transactions. From this perspective, the European Union has adopted several Directives addressing e-commerce related problems, such as the formation of contracts that take place by means of digital communications. Also, a legal framework has been made towards the development of rules on the recognition of electronic signatures that meet certain criteria. All European measures are at present being implemented into Dutch law, meaning that either a bill is pending in Parliament, or a proposed text is being considered in governmental bodies. 4.1 Signatures On 17 May 2001, the Bill on the implementation of the European Electronic Signatures Directive was put forward to the Dutch Parliament.30 The Bill introduces a legal framework for electronic signatures that is to amend the Civil Code, the Telecommunications Law and the Law on Economic Crimes. In line with the European Directive, the provisions are designed to ensure that an electronic signature cannot be legally discriminated against solely on the grounds that it is in electronic form. Interestingly, the Dutch proposal includes a more broad and open provision concerning the legal recognition of electronic signatures compared to the European Directive. In defining electronic signatures the Dutch provision follows the example of the UNICTRAL Model Law on Electronic Commerce. Already in March 1998, a special working group of the Ministry of Justice had advised to introduce the so-called functionally equivalent approach taken by UNCITRAL in its Model Law. Key objective of this approach is that the electronic document and the electronic signature must be functionally equivalent or, in other words, fulfill the same relevant functions as a paper document and a manual signature. Amongst these functions are: the evidential function, the information and communication function and the protection of third parties. In the Netherlands, the establishment of a voluntary accreditation scheme for CA's is at present under consideration. CA's wishing users of their certificates to 29. See: 30. TK (Parliamentary Papers) 2000-2001, 27743, nrs. 1-2
PRINS benefit from the legal recognition of electronic signatures based on their certificates would, however, have to meet the essential requirements(as stipulated in article 15a of the Bill). In order to establish such an accreditation scheme, a National Action Plan Trusted Third Parties(TTPs)has been set up. Also, a text concerning the Dutch Policy with respect to TTPs has been issued and a national TTP project group, under responsibility of the ministry of Transport and Communications, has worked out preconditions for TTPs. 3 In this project group both representatives of government and industry participate. The group performs several pilot projects. As re gards the Dutch Policy on TTPs, a number of preconditions are proposed or those TTPs who want to be accredited. 32 For TTPs offering confidentiality services, there is a precond ition of legal access (ie. government access to encrypted data). To detem ine what criteria and instruments should apply such lega access, the Dutch govemment opted for a"partnership approach", meaning that ernment and industry work together in developing a set of instruments acceptable to all parties. This project, called Legal Access (Rechtmatige toegang), now appears to propose that TTPs are free in choosing the mechanism that allows for legal access(a term, by the way, that is not clearly defined ) It was decided in the summer of 2001 that the final outcome is dependent on an economic-effect analysis, so there is not yet a definitive recommendation. Earlier, in 1998, the Dutch government had stated that a future mechanism for legal access to data encrypted with the aid of confidentiality TTPs is to be supported by legislation: If industry does not participate sufficiently actively in developing sa id set of instruments, the government will em phatically consider to fulfil the need for legalaccess with further legislation Finally mention should be made of the plans of the Dutch government to introduce a national Public Key Infrastructures(PKI). This infrastructure is intended to be used for authentication of electronic communications by government bodies No final decisions have been made as regards the broader application of the infrastructure as well as its role in limiting the lia bil ity of Ca s and providing legal advantage for electronic signatures issued under this PKI 4.2 Implementation of the European E-Commerce Directive On 6 July 2001, the Dutch cabinet has approved the Bill for the implementation of the European E-Commerce Directive. 33 The Bill was subsequently send for consultation to the Dutch governmental counsel( Raad van State ) Although itwas expected to be sent to Parliament some time autumn 2001, the Bill was still not in Parliament by January 1, 2002. Hence, the Netherlands will surely not meet the implementation date of 17 January 2002. The Dutch Bill amends the Civil Code and follows in many provisions the wordingof the European Directive 4.3 Electronic government communications Allrelevantdocumentscanbefoundthrough Under the Bill it s proposed that a CA registers with OPTa (the independent authority that superv ises the telecommunications market). 3 Zie:
PRINS 8 benefit from the legal recognition of electronic signatures based on their certificates would, however, have to meet the essential requirements (as stipulated in article 15a of the Bill). In order to establish such an accreditation scheme, a National Action Plan Trusted Third Parties (TTPs) has been set up. Also, a text concerning the Dutch Policy with respect to TTPs has been issued and a national TTP project group, under responsibility of the Ministry of Transport and Communications, has worked out preconditions for TTPs.31 In this project group both representatives of government and industry participate. The group performs several pilot projects. As regards the Dutch Policy on TTPs, a number of preconditions are proposed for those TTPs who want to be accredited.32 For TTPs offering confidentiality services, there is a precondition of legal access (i.e. government access to encrypted data). To determine what criteria and instruments should apply such legal access, the Dutch government opted for a "partnership approach", meaning that government and industry work together in developing a set of instruments acceptable to all parties. This project, called Legal Access (Rechtmatige toegang), now appears to propose that TTPs are free in choosing the mechanism that allows for legal access (a term, by the way, that is not clearly defined). It was decided in the summer of 2001 that the final outcome is dependent on an economic-effect analysis, so there is not yet a definitive recommendation. Earlier, in 1998, the Dutch government had stated that a future mechanism for legal access to data encrypted with the aid of confidentiality TTPs is to be supported by legislation: If industry does not participate sufficiently actively in developing said set of instruments, the government will emphatically consider to fulfil the need for legal access with further legislation. Finally mention should be made of the plans of the Dutch government to introduce a national Public Key Infrastructures (PKI). This infrastructure is intended to be used for authentication of electronic communications by government bodies. No final decisions have been made as regards the broader application of the infrastructure as well as its role in limiting the liability of CA s and providing legal advantage for electronic signatures issued under this PKI. 4.2 Implementation of the European E-Commerce Directive On 6 July 2001, the Dutch cabinet has approved the Bill for the implementation of the European E-Commerce Directive. 33 The Bill was subsequently send for consultation to the Dutch governmental counsel ( Raad van State ). Although itwas expected to be sent to Parliament some time autumn 2001, the Bill was still not in Parliament by January 1, 2002. Hence, the Netherlands will surely not meet the implementation date of 17 January 2002. The Dutch Bill amends the Civil Code and follows in many provisions the wording of the European Directive. 4.3 Electronic government communications 31. All relevant documents can be found through 32. Under the Bill, it is proposed that a CA registers with OPTA (the independent authority that supervises the telecommunications market). 33. Zie:
REGULATINGELECTRONIC COMMERCE IN THE NETHERLANDS In Apri 200 1 the Dutch govemment distributed for consultation draft text to amend the Administrative Procedure Act 34 Once in force this text will adapt Dutch adm inistrative law to the digital era and authorize and facilitate the use of electronic communications for the perfomance of administrative procedures In decem ber 2001, the Dutch cabinet fomally approved a Bill that adopts most of the proposals presented n the text distributed in April. The Bill was send for consideration to the Raadvan State So far Dutch adm inistrative bw contains fomal requirement, which seem increasingly anachonistic in an era where electronic commerce is booming and electronic govemment is high on the political agenda From the present Dutch proposal fora Bill, it is clear that the legislature opts for a simple amendment of the general adm inistrative procedure act(Awb ). A limited set of provisions is proposed to be introduced at the general level, thus acknowledging the possibility to issue an electronic administrative comm unication(besluit). The specifics are left to more detailed guidelines( dea ling among others with additional ecurity measures)as well as the relevant statutes that cover specific topics(such as the environmental statutes, etc. ) This means thatall topic-specific statutes will in the future be amended when such specific regulations are deemed necessary It should be noted at this point that the ICT-related legislative developments under civil law may also havean impact on adm inistrative a w Characteristic for the Dutch legal system is that all civil law rules also apply to the public sector(art. 6: 162 Civil Code). Hence, all public bodies have to act in accordance with both the rules of the Civil Code as well as specific rules in administrative law. This means that when adm inistrative law gives no ruling on a specific topic or interpretation question courts may interpreteadministrative law in light of the civil lawrules. In other words, both systems are seen as complementary. This characteristic of Dutch law is important in situations where no rules are available under adm inistrative law on electronic communication, whereas such rules have been provided for under civil law. Italso means thatamendments to the adm inistrative procedure act do not always need to be highly detailed because they can be interpreted in light of the civil law rules and case law 4.4. On-line Dispute resolutio In the Netherlands, efforts have also begun towards developing online altemative dispute mechanisms to offer fast, low cost and accessible redress for the arge num ber of small claims arising from business to consumer online transactions. In July 2001, the Dutch cabinet decided to introduce specific measures that allow for Voorontwerp van Wet Aanvulling van de Algemene wet bestuursrecht met regels over erkeer tussen burgers en bestuursorganen langs elektronische weg(Wet elektron isch bes tuurlijk .for an extensive discuss ion on similar developments n France, germany, Norway and the United States, see:JEJ. Prins, et al Taking Administrative law to the DgitalEra. Regulatory Initiaties m Frmce, GermanyNonwayandtheUs,DenHaagSdu2002(seealsowww.now/iter.nl>
REGULATING ELECTRONIC COMMERCE IN THE NETHERLANDS 9 In April 2001 the Dutch government distributed for consultation a draft text to amend the Administrative Procedure Act. 34 Once in force this text will adapt Dutch administrative law to the digital era and authorize and facilitate the use of electronic communications for the performance of administrative procedures. In december 2001, the Dutch cabinet formally approved a Bill that adopts most of the proposals presented in the text distributed in April. The Bill was send for consideration to the Raad van State. So far Dutch administrative law contains formal requirement, which seem increasingly anachronistic in an era where electronic commerce is booming and electronic government is high on the political agenda. From the present Dutch proposal for a Bill, it is clear that the legislature opts for a simple amendment of the general administrative procedure act (Awb). A limited set of provisions is proposed to be introduced at the general level, thus acknowledging the possibility to issue an electronic administrative communication (besluit). The specifics are left to more detailed guidelines (dealing among others with additional security measures) as well as the relevant statutes that cover specific topics (such as the environmental statutes, etc.). This means that all topic-specific statutes will in the future be amended when such specific regulations are deemed necessary. It should be noted at this point that the ICT-related legislative developments under civil law may also have an impact on administrative law. Characteristic for the Dutch legal system is that all civil law rules also apply to the public sector (art. 6:162 Civil Code). Hence, all public bodies have to act in accordance with both the rules of the Civil Code as well as specific rules in administrative law. This means that when administrative law gives no ruling on a specific topic or interpretation question, courts may interprete administrative law in light of the civil law rules. In other words, both systems are seen as complementary. This characteristic of Dutch law is important in situations where no rules are available under administrative law on electronic communication, whereas such rules have been provided for under civil law. It also means that amendments to the administrative procedure act do not always need to be highly detailed because they can be interpreted in light of the civil law rules and case law. 4.4. On-line Dispute Resolution In the Netherlands, efforts have also begun towards developing online alternative dispute mechanisms to offer fast, low cost and accessible redress for the large number of small claims arising from business to consumer online transactions. In July 2001, the Dutch cabinet decided to introduce specific measures that allow for 34. Voorontwerp van Wet Aanvulling van de Algemene wet bestuursrecht met regels over verkeer tussen burgers en bestuursorganen langs elektronische weg (Wet elektronisch bestuurlijk verkeer) . The text can be found at: . For an extensive discussion on similar developments in France, germany, Norway and the United States, see: J.E.J. Prins, et. al Taking Administrative Law to the Digital Era. Regulatory Initiatives in France, Germany, Norway and the US, Den Haag Sdu 2002 (see also: www.now/iter.nl>
PRINS the establishment of low-threshold (on-line)dispute resolution mechanism Within the framework of the Dutch Electronic Commerce Platform(ECP. NL), a project on on-line dispute resolution is initiated, titled ODR NL. At the time this report was written, no clear indications were available as regards the future of on-line dispute resolution in the Netherlands. What is clear is that providers of altemative dispute resolution mechanisms have to get used to the idea that these mechanisms can also be delivered by using electronic facilities Jurisdiction The Netherlands is a mem ber to the brussels conventi and the Rome Convention. 36 Both conventions hold special provisions on intemational consumer contracts in order to protect consumers when contracting with foreign professionals, offering them access to a nearby forum and familiar legal system. Clearly, the existing consumer rules in both conventions have been written fora paper world and provide legal uncerta inty with respect to on-line consumer contracts. One of the inciple problems resulted from the distinction between active and passive onsumers. The general idea behind the distinction is to solely protect the consumer who is solicited by the foreign business and not the consumer that looks actively for the foreign merchant or service prov ider himself. However, the question arises how to qualify a consumer who is looking for the website at its own initative? Can the website itself be considered an advertisement in the consumer s country? Does the shopkeeper s intention with respect to the range of the website(world wide or lim ited to a certa in number of countries)play a role? Can circumstances such as language, urrency and choice-of-law or choice-of-forum chuses be of relevance? There is no unambiguous answer to any of these questions When interpreting the rules strictly, the Internet-consumer, in many cases will not be protected, whilst protection may especally be important exactly in on-line situations. Secondly, legal uncerta inty is detrimental to the development of electronic commerce, which development may be to the benefit of businesses as well as onsumers. In 2000 the European Comm ission adopted a Regulation on jurisdiction, recognition and enforcement of judgements in civil and commercial matters, which intends to replace and upda te the Brussels convention. 37 The Netherlands will adhere to the provisions of this Regulation. In the Regulation, which will come into force at a ater date, the European Commission remed ies the inadequacies by including on-line consumer contracts in the specal consumer protection rules on jurisdiction expressly deciding in favour of the Internet-consumer. Clearly, this choice is not welcomed by industry, Dutch industry included. Industry, among them Dutch providers of Internet services, fears huge econom ic consequences as a result of this new legislation. Admittedly, the chance of being haled into third country courts can Brussels Convention on jurisdiction and the enforcement of judgements n civil and commercial matters of27 September 1968, OJC27/1, 26.01 1998(consolidated Rome Convention on the law applicable to contractual obligations of 19 June 1980, OJ C27/34 Council Regulation(EC) No 44/2001 of 22 December 2000on jur diction and the recognition and enforcementof judgments n civil and commercalmaters, OJL 012, 1601/2001 P. 0001-0023
PRINS 10 the establishment of low-threshold (on-line) dispute resolution mechanisms. Within the framework of the Dutch Electronic Commerce Platform (ECP.NL), a project on on-line dispute resolution is initiated, titled ODR.NL. At the time this report was written, no clear indications were available as regards the future of on-line dispute resolution in the Netherlands. What is clear is that providers of alternative dispute resolution mechanisms have to get used to the idea that these mechanisms can also be delivered by using electronic facilities. 5 Jurisdiction The Netherlands is a member to the Brussels Convention 35 and the Rome Convention.36 Both conventions hold special provisions on international consumer contracts in order to protect consumers when contracting with foreign professionals, offering them access to a nearby forum and familiar legal system. Clearly, the existing consumer rules in both conventions have been written for a paper world and provide legal uncertainty with respect to on-line consumer contracts. One of the principle problems resulted from the distinction between active and passive consumers. The general idea behind the distinction is to solely protect the consumer who is solicited by the foreign business and not the consumer that looks actively for the foreign merchant or service provider himself. However, the question arises how to qualify a consumer who is looking for the website at its own initiative? Can the website itself be considered an advertisement in the consumer s country? Does the shopkeeper s intention with respect to the range of the website (worldwide or limited to a certain number of countries) play a role? Can circumstances such as language, currency and choice-of-law or choice-of-forum clauses be of relevance? There is no unambiguous answer to any of these questions. When interpreting the rules strictly, the Internet-consumer, in many cases will, not be protected, whilst protection may especially be important exactly in on-line situations. Secondly, legal uncertainty is detrimental to the development of electronic commerce, which development may be to the benefit of businesses as well as consumers. In 2000 the European Commission adopted a Regulation on jurisdiction, recognition and enforcement of judgements in civil and commercial matters, which intends to replace and update the Brussels convention.37 The Netherlands will adhere to the provisions of this Regulation. In the Regulation, which will come into force at a later date, the European Commission remedies the inadequacies by including on-line consumer contracts in the special consumer protection rules on jurisdiction, expressly deciding in favour of the Internet-consumer. Clearly, this choice is not welcomed by industry, Dutch industry included. Industry, among them Dutch providers of Internet services, fears huge economic consequences as a result of this new legislation. Admittedly, the chance of being haled into third country courts can 35. Brussels Convention on jurisdiction and the enforcement of judgements in civil and commercial matters of 27 September 1968, OJ C 27/1, 26.01.1998 (consolidated version). 36. Rome Convention on the law applicable to contractual obligations of 19 June 1980, OJ C 27/34, 26.01.1998 (consolidated version). 37. Council Regulation (EC) No 44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters, OJ L 012 , 16/01/2001 P. 0001-0023