The Council of the EU on 19 November 2024 adopted, in its first reading, the text of a regulation abolishing the European Online Dispute Resolution Platform (EU ODR Platform), planning to replace it with a more modern and effective tool. This decision follows nearly a decade of limited success with the current platform.
Ineffectiveness of the Existing ODR Platform
The European Online Dispute Resolution (ODR) Platform was introduced as part of the 2013 legislative package, which included the implementation of Directive 2013/11/EU of the European Parliament and the Council of 21 May 2013 on alternative dispute resolution for consumer disputes and amending Regulation (EC) No. 2006/2004 and Directive 2009/22/EC (hereinafter referred to as the “Directive on Consumer ADR”), as well as the implementation of Regulation (EU) No. 524/2013 of the European Parliament and the Council of 21 May 2013 on online dispute resolution for consumer disputes and amending Regulation (EC) No. 2006/2004 and Directive 2009/22/EC (Regulation on Consumer ODR). Established in 2016, the platform aimed to provide swift, out-of-court solutions for disputes between consumers and traders arising from online transactions. It offered options such as direct negotiations between the trader and the consumer or referral to a dispute resolution body. Despite a significant number of visits, the platform’s effectiveness was entirely lacking. According to available data, only about 200 cases were processed annually across the EU through the platform.
Recognizing the platform’s limitations, the European Commission proposed a new package of measures in October 2023 to modernize and simplify the rules for out-of-court dispute resolution.
Resolving Dispute Using the Existing ODR Platform
Under the current regulations, a consumer may use the ODR platform provided that the following conditions are cumulatively met:
- if the consumer resides in an EU Member State, Norway, Iceland, or Liechtenstein;
- if the trader is established in an EU Member State, Norway, Iceland, or Liechtenstein;
- if the complaint pertains to goods or services purchased online, via the internet.
The online dispute resolution through the ODR platform allows consumers to address the trader for direct resolution of the dispute, with a 90-day period for reaching an agreement. Additionally, there is the option of addressing a dispute resolution body with a request to resolve the dispute. In this case, the consumer must contact the trader within 30 days and reach an agreement with them on selecting a dispute resolution body, chosen from a list of such bodies available on the European Commission’s website.
A trader established in the EU, Norway, Iceland, or Liechtenstein can use the ODR platform to forward a consumer dispute related to an online purchase to an authorized dispute resolution body. However, the trader can only submit a complaint after registering in the ODR platform system and only against consumers who reside in Belgium, Germany, Luxembourg, or Poland.
End of the Existing ODR Platform – Decision-Making Process
The replacement of the Online Dispute Resolution platform with a new digital tool was first highlighted in the proposals of the European Commission (the aforementioned legislative package of measures from 2023). These proposals were then incorporated into the EU Council’s negotiating position adopted on 25 September 2024, regarding amendments to the existing Directive on Consumer ADR.
The development of the new digital tool is expected to be completed no later than three months after the adoption and entry into force of the revised Directive on Consumer ADR, with the European Commission responsible for promoting the new tool and its technical maintenance.
The Council then formally adopted the proposal for a regulation to abolish the ODR platform – the European Online Dispute Resolution Platform. In the next step, the text of the proposed regulation must pass a second reading and vote in the European Parliament. If no further amendments to the proposal are made during the second reading, the adopted text of the regulation will be published in the Official Journal of the European Union and will come into force 20 days after publication, upon which the ODR platform will be officially abolished.
Revision of the Directive on Consumer ADR
Simultaneously, a revision process of the Directive on Consumer ADR is underway,
during which the Council of the EU has formalized its stance, serving as the basis for negotiations between the Council presidency and the European Parliament.
The key points of the EU Council’s negotiating position regarding the revision of the Directive on Consumer ADR are as follows:
- the scope of the directive is limited to disputes arising from contracts, but with a clear emphasis that contractual obligations include pre-contractual stages (e.g., advertising, provision of information), as well as stages after its expiration (e.g., in relation to the use of digital content);
- member states are allowed to decide, within the framework of their national legislation, on the application of alternative dispute resolution procedures in the case of disputes with traders from third countries;
- access to alternative dispute resolution is possible in both digital and non-digital formats;
- traders are obliged to inform consumers in advance if automated decision-making systems are used in alternative dispute resolution procedures – of any kind, including those not considered and classified high-risk under European Artificial Intelligence Act;
- member states independently determine the conditions related to the allocation of cases to the competent authorities at the national level, thereby enabling the implementation of the directive within the framework of different national complaint resolution systems;
- in the case of complex disputes or exceptional circumstances, the deadline for the trader’s response to a request for alternative dispute resolution is extended from 20 to 40 working days, and if the trader fails to respond within this period, the consumer initiating alternative dispute resolution may consider the trader to have refused to participate, though it will not be considered that the trader refused to participate even if their response is absent, provided that it is prescribed that their participation is mandatory, if the outcomes can be achieved without their consent to participate, or if they have previously contractually committed to alternative dispute resolution;
- member states are granted an additional year to establish all necessary national legislative procedures to adapt to the new requirements.
It is expected that the adaptation of alternative dispute resolution, as well as the introduction of a new digital tool for resolving disputes arising from online transactions, which today undoubtedly predominate over other forms of purchasing, will be at least a step closer to overcoming the challenges of the digital world and will ultimately result in greater efficiency compared to the existing ODR platform.
Klara Mrčela, Valentina Plantić
