Can I do EU business from the USA?

Online trade with the USA, does the German online retailer have to comply with US law?

The USA is the largest online market in the world. This market is therefore an enormous opportunity for the German online retailer. However, the risks of online trading with the USA become imponderable if the German online retailer is subject to US law and US courts. However, the German online retailer, which also delivers goods to the USA from Germany, does not have to deal with US law and US courts.

Applicable Law

In contrast to the EU, where distance selling law is now regulated in many areas across the EU, the USA has largely left the legal regulation of online trading to the individual US states and the case law. The risk of litigation in US courts depends largely on the case law of the individual US state court. In contrast to EU law, there is no legal principle in the USA that the consumer can insist on the application of the law of his home country in distance sales.

Tip: The IT law firm is now offering terms and conditions for amazon.com - including a data protection declaration and imprint and all for just 24.99 euros / month. The legal texts take into account the peculiarities of US law and in particular the Amazon regulations that are mandatory for Amazon retailers in the USA.

The legal situation is fragmented.

In principle, the country of origin principle applies to online business in the USA. In principle, the seller can determine the applicability of German law in his terms and conditions. From the few publicly available US court rulings on the question of the applicability of US law in e-commerce disputes against defendants who are not resident in the US, it can be inferred that a US court may only have jurisdiction if when a foreign online retailer targets customers in a specific US state.

A German online retailer who only delivers goods to the USA, among other things, and does not establish any presence in a certain US state (be it e.g. via local advertising or a local representative) is in any case not exposed to the risk of submission to the local justice system. Disputes before a US court can pose an existential risk for a German online retailer, as a US court can issue considerable claims for damages, especially in the case of consequential damage.

Design of the website of the German online retailer, which among other things wants to deliver goods to customers in the USA

The German online retailer who also wants to deliver goods to customers in the USA should offer an English language version of its website and keep an English version of its German terms and conditions there. The English language version should be written in a general manner and not explicitly aimed at US customers. The IT firm offers a general, English-language translation of the terms and conditions, in which the applicability of German law is clearly regulated. Please do not hesitate to contact us.

The legal risk of litigation in US courts increases when German online retailers want to target US customers

However, only a few US customers will “get lost” on the website of a German online retailer. The normal US customer will usually only order goods through an online retailer based in the USA. At least there should be some local contact point in the US. The German online retailer, who wants to conquer a presentable market share in the USA for its products, will not be able to avoid a branch in the USA. By then, at the latest, he will also be subject to the US courts. In addition to logistical considerations, the German online retailer will then have to think about which state is particularly seller-friendly.

Necessity of a safe harbor regulation at a US branch of the German online retailer

Directive 95/46 / EC (data protection directive) fundamentally prohibits the transfer of personal data from EU member states to states that do not have a level of data protection comparable to EU law. This applies to the USA, as it does not have comprehensive legal data protection regulations that correspond to the standards of the EU. An agreement has been concluded between the USA and the EU according to which US companies are recognized as complying with EU data protection standards if they undertake to observe the principles of "safe harbor" laid down in this agreement and to comply with them on an appropriate list from the US Department of Commerce.

A German online retailer who sets up a company as a subsidiary in the USA and sells goods in the USA through this company would therefore have to have his US company entered on this list.

Conclusion

For the German online retailer, the USA is a different world with enormous opportunities. However, disputes before a US court can pose an existential risk, especially for a small German online retailer. If the German online retailer does not want to take any legal risk of being exposed to US jurisdiction, it will have to forego serving the US market in a targeted manner. If he wants to work seriously in the US market, he will not be able to avoid establishing a branch in the USA. Then, however, he is also exposed to the US judiciary.

Tip: The IT law firm is now offering terms and conditions for amazon.com - including a data protection declaration and imprint and all for just 24.99 euros / month. The legal texts take into account the peculiarities of US law and in particular the Amazon regulations that are mandatory for Amazon retailers in the USA.

tip: Do you have any questions about the contribution? Feel free to discuss this with us in the entrepreneurial group of the IT law firm on Facebook.

Image source:
© niroworld - Fotolia.com