Legal Prerequisites and Conditions for Electronic Commerce and Sanctions for Non-Compliance with Regulations

With the expansion of modern information technologies, smartphones and broadband internet, our life, the way we communicate, and the way we are buying, have changed.

Business at the global level has changed significantly, and the turning point is the electronic trade. For example, on the list of the richest individuals in the world of the Forbes magazine Mr. Jeff Bezos, owner of Amazon, which is currently engaged in e-commerce, is taking the first place.

The world media are “charging” Amazon with accusations that, in particular in the United States, is responsible for the closure of shopping malls and retail chains due to the large and increasing volume of electronic commerce.

Therefore, the impact of the e-commerce phenomenon is indisputable, its expansion is strong and fast, and how is such a progressive industry found its foothold in the traditional lackadaisical Serbian regulation, we will see from the following text.

In Serbia, electronic commerce is regulated through a number of laws of which the following are most important:

  • Law on Electronic Commerce (“Official Gazette of the Republic of Serbia”, No. 41/2009 and 95/2013);
  • Law on Trade (“Official Gazette of the Republic of Serbia”, No. 53/2010 and 10/2013 and 44/2018);
  • Law on Electronic Document, Electronic Identification and Trusted Services in Electronic Commerce (“Official Gazette of the Republic of Serbia”, No. 94/2017);
  • Law on Consumer Protection (“Official Gazette of the Republic of Serbia”, No. 62/2014 and 6/2016 – other law);

The Law on Electronic Commerce is the first legal act in the history of Serbian legislation that regulates this matter and in fact sets the foundation for electronic business in general, and therefore electronic commerce, as one of the elements of such business.

This Law sets the preconditions for the development of electronic commerce by, first of all, protecting participants in this process. The service provider in this type of trade is obliged to provide both users of services and competent authorities, in a form that is directly and permanently accessible, information on the basis of which he can be identified and contacted, and to specify its offer in a manner that does not contain hidden costs, to enable users to access the text of the contract and general business conditions in a way that enables the user of the service to store and reproduce them. If he fails to comply with these provisions of the electronic commerce law, the service provider risks being punished by a fine of RSD 100,000 to as much as RSD 1,500,000, and if the service provider is an entrepreneur, a fine ranging from RSD 10,000 to RSD300,000.

As the protection of participants in electronic commerce cannot be founded solely on the right of the competent authorities to sanction those who do not comply with the law, as well as traditional forms of trade, the provisions of the Consumer Protection Act apply to electronic commerce. This law offers consumers a different level of protection in relation to the Electronic Commerce Act, and the most specific provisions of this law are related to the protection of consumers in exercising rights from distance contracts and contracts that are concluded outside the business premises. When it purchases goods through e-commerce, the consumer has the right to change his mind and to opt out from the contract within 14 days and return the goods to the trader, which leaves the buyer a way of determining whether the product he had bought comply with what was presented to him, whether it has the characteristics that are presented and whether, ultimately, it fits the buyer.

In relation to this right of the consumer, i.e. the buyer, the seller’s obligation is to return the paid price to the buyer. However, in order to prevent misuse of such a provision, the seller has the right to reduce the refunded price if he assesses that the item has been used in a manner that exceeds the use for the purpose of determining the properties of the product and which reduced the use value of the product.

This right does not apply to all products. In Article 37 of the Consumer Protection Act, there are clear exceptions that state that the right to opt out from the contract if the service is fully executed and its provision started after explicit prior consent of the consumer and his confirmation that he knows that he loses the right to withdraw from the contract when the trader fully executes the contract; Delivery of goods produced according to the specific requirements of the consumer or clearly personalized; Delivery of goods subject to deterioration of quality or has a short duration; Delivery of sealed goods that cannot be returned for protection of health or hygienic reasons and which is unsealed after delivery; Delivery of sealed audio, video or computer software, which are unsealed after delivery, as well as in other cases regulated by Article 37 of the Law on Consumer Protection.

According to this Law, the consumer is also entitled to receive an invoice from Article 12 of the Law on Consumer Protection, which represents a written clue about the conclusion of the contract through electronic communications. The invoice can also be issued in the form of an electronic document and must be delivered to the buyer at the latest at the moment of delivery of the goods, due to the calculation of deadlines.

In the case of sales through e-commerce, the trader is obliged, according to Article 31 of this Law, to submit to the permanent holder of the record a form for the cancellation, pre-notification and contract or document of the contract.

The obligation of the trader to deliver to the consumer in accordance with Article 47 of this Law, to provide the consumer with instructions for use in the case of the sale of technical goods, additionally protects the customers from the possibility that the functionality of the product will be reduced and will prevent the full refund of the price in case of withdrawal from the contract.

It is unnecessary to talk about the responsibility for violating the rights of consumers under this Law, because the consumer has a wide range of mechanisms and measures available to him to receive satisfaction for his violated right, while the trader threatens high fines (even up to 2,000,000 dinars) for violating the above and other, non-compliant provisions of the Law, while for him a violation of certain provisions may also be imposed a protective measure prohibiting the performance of certain activities in a period of up to one year.

What consumers need to keep in mind is that the protection of the institutions of the Republic of Serbia can only be enjoyed if the goods are purchased by e-commerce from a seller registered in the Republic of Serbia, since for a contract on the sale of movable items, unless the applicable law is contracted, law of seller’s residence country is applied (Article 20 of the Law on the Resolution of the Conflict of Law with the Regulations of Other Countries (“Official Gazette of SFRY”, No. 43/82 and 72/82 – eg, “Official Gazette of FRY” “, No. 46/96 and” Official Gazette of the Republic of Serbia “, No. 46/2006 – other law)). In these situations, the consumer cannot count on protection by inspection and other authorities and courts of the Republic of Serbia, so that the above does not apply to electronic commerce when the customer is registered abroad.

Bearing this in mind, we can conclude that the legislative framework in which electronic commerce is being developed in Serbia is developing and adapting and that there are measures and mechanisms that protect primarily users, while service providers have clear legal frameworks for doing business. All this represents only the laying of the foundation for the development of electronic commerce in Serbia, because through the adoption of new laws and the elaboration of the old ones and the introduction of new institutes, it increases security and guarantees the consumer that his rights will be respected. Only further development of legislation in this area and better protection of users of services we can expect greater popularization of e-commerce in Serbia and some Serbian Jeff Bezos.