Federation of European Direct and Interactive Marketing (FEDMA)

Summary of the initiative

Name
Federation of European Direct and Interactive Marketing (FEDMA)
Objective(s)
Remove barriers to e-commerce cross-border services through common rules on commercial communication; Create the trust and confidence needed for the development of e-commerce; Minimise the need for legal restrictions. In order to remove barriers to the development of cross-border services within the Community which members of the regulated professions might offer on the Internet, it is necessary that compliance be guaranteed at Community level with professional rules aiming, in particular, to protect consumers or public health.
The EU has considered that codes of conduct at Community level would be the best means of determining the rules on professional ethics applicable to commercial communication; the drawing-up or, where appropriate, the adaptation of such rules should be encouraged without prejudice to the autonomy of professional bodies and associations. Therefore the Directive (article 8.2) provides that Member States and the Commission should "encourage the drawing-up of codes of conduct; this is not to impair the voluntary nature of such codes and the possibility for interested parties of deciding freely whether to adhere to such codes."
It also provides (article 8.3) that, when drawing up proposals for Community initiatives which may become necessary to ensure the proper functioning of the Internal Market with regard to the information given for the purposes of commercial communication, the Commission shall take due account of codes of conduct applicable at Community level and shall act in close cooperation with the relevant professional associations and bodies.
Article 10. 2 Information to be provided Member States shall ensure that, except when otherwise agreed by parties who are not consumers, the service provider indicates any relevant codes of conduct to which he subscribes and information on how those codes can be consulted electronically. The Directive also seeks to facilitate the setting up of effective, alternative cross-border on-line dispute settlement systems.
Article 17 Out-of-court dispute settlement: Member States shall ensure that, in the event of disagreement between an information society service provider and the recipient of the service, their legislation does not hamper the use of out-of-court schemes, available under national law, for dispute settlement, including appropriate electronic means. Member States shall encourage bodies responsible for the out-of-court settlement of, in particular, consumer disputes to operate in a way which provides adequate procedural guarantees for the parties concerned. Member States shall encourage bodies responsible for out-of-court dispute settlement to inform the Commission of the significant decisions they take regarding information society services and to transmit any other information on the practices, usages or customs relating to electronic commerce.
The code of conduct set up by FEDMA in 2000 is part of the wider FEDMA initiative "Ring of Confidence", whose overall aim is to establish a comprehensive self-regulatory system for e-commerce. The code, which is based on existing international, European and national codes, and relevant European Union regulations, covers commercial offers, contractual information, the need for financial security, data protection, the protection of children, redress mechanisms, monitoring and enforcement.The code is intended as both a stand-alone European code for FEDMA's members and any other organisation doing business by e-commerce, as well as a basis for national codes operated by the direct marketing associations.
The Code contains provisions on the following: Operational Transparency; Commercial Offers and Contractual Information; Commercial Communications; Transactional Security; Data Protection and Consumer Privacy; Protection of Children; Redress Mechanism; Monitoring and Enforcement; Applicable Law.

Description of the Initiative

    Sector

    Sector

    Contact Point - Commission
    GROW E2, Other: CNECT F1, JUST A2

    Self/Co-Regulation Basic Act

    LEGISLATIVE ACT
    Year
    2000
    Title of Act
    Directive 2000/31/EC of the European Parliament and of the Council of 8 June 2000 on certain legal aspects of information society services, in particular electronic commerce, in the Internal Market (Directive on electronic commerce), Official Journal L 178, 17/07/2000, p. 1-16.
    Review, Revision or Sunset Clause Year
    2003
    PRIVATE ACT
    Year
    2000
    Title of Act
    Code of Conduct on e-Commerce & Interactive Marketing
    Review, Revision or Sunset Clause Year
    2001

    Geographical Coverage

    Participating Countries
    Austria

    Description

    Problems that lead to the introduction of Self/Co-Regulation and the adoption of the Founding Act
    Low confidence of some consumers in e-commerce. The development of information society services within the Community is hampered by a number of legal obstacles to the proper functioning of the internal market which make less attractive the exercise of the freedom of establishment and the freedom to provide services; these obstacles arise from divergences in legislation and from the legal uncertainty as to which national rules apply to such services. This affects negatively consumer´s confidence.
    Target Group(s)
    Direct marketing sector, consumers.
    Type of Instrument(s)
    Code of conduct.
    Level(s) at which private rules should be defined and applied
    Type of Financing
    -
    Type of Monitoring
    Conduct an initial survey of compliance capacity of future regulateesConduct regular visits and spot checksInitiate complaints proceduresMaintain database of those bounded by the normsProduce regular reportsReceive complaints and verify if norms were breached or notReflexive dialogue with the - stakeholdersOther
    European Commissionyesyes
    National public authority
    International public authority
    Private regulator (code owner)yesyesyes
    Private independent party with a mandate (e.g. auditors)
    Self-appointed private parties (e.g. NGOs)yes
    Succinct description of the type of Monitoring
    Extract from Directive "Article 16 - Codes of conduct Member States and the Commission shall encourage:
    (a) the drawing up of codes of conduct at Community level, by trade, professional and consumer associations or organisations, designed to contribute to the proper implementation of Articles 5 to 15;
    (b) the voluntary transmission of draft codes of conduct at national or Community level to the Commission;
    (c) the accessibility of these codes of conduct in the Community languages by electronic means;
    (d) the communication to the Member States and the Commission, by trade, professional and consumer associations or organisations, of their assessment of the application of their codes of conduct and their impact upon practices, habits or customs relating to electronic commerce;
    (e) the drawing up of codes of conduct regarding the protection of minors and human dignity. Member States and the Commission shall encourage the involvement of associations or organisations representing consumers in the drafting and implementation of codes of conduct affecting their interests and drawn up in accordance with paragraph 1(a). Where appropriate, to take account of their specific needs, associations representing the visually impaired and disabled should be consulted."
    Extracts from FEDMA code of conduct
    "8. 5 Monitoring and Enforcement at national DMA level
    8. 5. 1 The national Direct Marketing Associations are responsible for the strict application of the code provisions amongst members and/or incorporation into their national selfregulatory initiatives if such exist. Where national self-regulatory initiatives do exist, sanctions applicable to a breach of the national code of conduct should be extended to the provisions of the FEDMA Code. Where there is no national self-regulatory system, DMAs should use an existing, or establish a procedure to ensure compliance with the FEDMA Code provisions at the national level.
    8. 5. 2 Any contravention of the provisions of the FEDMA code, which cannot effectively be dealt with at the national level, should be referred for consideration to the FEDMA Monitoring Committee. Similarly, any decision taken at the national level to sanction a serious and/or consistent breach of the FEDMA provisions by removing a FEDMA recognised guarantee seal from a member´s website, should be referred to the FEDMA Monitoring Committee for approval before execution.
    8. 5. 3 A person should be nominated within each national DMA to assume responsibility for liaison with FEDMA on matters pertaining to the application and enforcement of the FEDMA Code provisions.
    8.6 Monitoring by FEDMA members and other accredited marketers
    8. 6. 1 Marketers adhering directly to this code of conduct must assume direct responsibility for compliance at all times. Companies should have, or establish, an effective internal enforcement procedure, which can cover the enforcement of the FEDMA provisions. A person should be nominated within the organisation to act as a liaison with the FEDMA Monitoring Committee on matters pertaining to the application and the enforcement of the FEDMA Code provisions. The FEDMA Monitoring Committee must be informed of any serious and/or consistent breach of any of the Code provisions. Companies are subject to any decision taken by the FEDMA Monitoring Committee.
    8.7 FEDMA Monitoring Committee
    8. 7. 1 A Committee should be established within FEDMA to monitor the overall application of the FEDMA Code. The Committee will report to the FEDMA Board. The Committee will be composed of an independent chairman, the contact persons from the national DMAs as established in article 8. 5. 3 a contact nominee within FEDMA; and three representatives from companies who are members of the FEDMA Board. The Committee should adopt its own internal rules of procedure.
    8. 7. 2 The functions of the Committee are: To review regularly the code and consider on an annual basis if a revision of the Code is necessary; the first review of the code should take place six months after the date of adoption; to resolve any outstanding cross-border complaints in co-operation with IFDMA (International Federation of Direct Marketing Associations) and EASA (European Advertising Standards Alliance), as appropriate in accordance with the procedures of the Consumer Complaints Resolution Mechanism (CCRM); to consider any contravention of the Code brought to its attention by a national DMA; a direct member company nominated staff member, or an individual consumer. The Committee, with due regard to the type of contravention, may decide to recommend to the FEDMA Board sanctions or the expulsion of the member, according to its rules of procedure.
    8. 8 FEDMA may consider the possibility of initiating action against a member or a non-member in order to safeguard the ethics of the profession.
    8. 9 Non-compliance with the provisions of this Code may also result in specific legal actions from the national supervisory authorities."
    Type of Enforcement
    Faming, shaming and blamingJudicial sanctionsMembership suspension/exclusionPrivate finesOther
    Private Regulatoryes
    Private independent party with a mandate (e.g. auditors)
    Court systemyes
    Alternative dispute resolution (ADR) / Online dispute resolution (ODR)
    Succinct description of the type of Enforcement
    No specification in the Directive. Extracts from FEDMA code of conduct "7. 1 Marketers should provide clear information on their compliant procedures, in particular how to go about making a complaint and who to contact. 7. 2 Complaints 7. 2. 1 Marketers should operate effective in-house complaint procedures. They should be confidential, free to use, easy to access and to operate. Where possible, they should seek to acknowledge complaints. 7. 2. 2 Every effort should be made to resolve complaints to the satisfaction of the consumer within a specified time limit. This time period should not exceed 30 days of receipt of the complaint. Marketers should inform the consumer in good time of any necessary extension to a specified time period. They should also endeavour to record and monitor complaints. 7. 2. 3 In the event that a complaint cannot be satisfactorily resolved directly with the marketer, the consumer should have redress to the national Direct Marketing Association (DMA) or the relevant equivalent body at the national level. 7. 2. 4 Where the marketer adheres to a national code of practice in e-commerce, the marketer should inform the consumer of, and abide by the complaints redress procedure as provided for in that code. The FEDMA provisions on consumer redress should be incorporated into any national procedures. 7. 2. 5 The marketer should inform the consumer of any Alternative Dispute Resolution Systems (ADRs) to which the consumer can refer a complaint for resolution if he/she wishes. 7. 3 Transnational complaints 7. 3. 1 FEDMA recognises that increasing e-commerce means an increased probability of cross-border or transnational complaints. FEDMA defines such a complaint as one raised against a marketer whose country of origin is other than the country of residence of the consumer at the time the complaint is lodged. 7. 3. 2 In resolving such complaints, marketers should apply the same provisions as in the case of national complaints. This refers in particular to the time period accorded to the resolution of complaints, obligations to inform of any necessary delay, and of the existence and right to use ADRs. 7. 3. 3 Given the " borderless " nature of e-commerce and the linguistic and cultural differences existing between European countries, FEDMA recognises the difficulties which marketers and consumers face in terms of the satisfactory resolution of transnational complaints. 7. 3. 4 To help marketers overcome this obstacle to providing satisfactory online customer service, FEDMA proposes to develop an online Consumer Complaints Resolution Mechanism (CCRM), complete with a multilingual facility. This should be easily and obviously accessible through a hyper-link on the marketer´s homepage. 7. 3. 5 Marketers should use this mechanism when it becomes available."

    Results of Commission Monitoring

    Link / Reference of Evaluation
    -

    Downloads

    SMO self- and co-regulation database - private code 48