New Internet/E Commerce Law in Spain
- Spain
- 08/26/2002
The new Law 34/2002, dated July 11, 2002, and which goes into effect in October 2002, regulating Information Society Services and Electronic Commerce (denominated “LSSI”), was enacted for the purpose of establishing a new and extensive legal framework governing activities carried out in Spain through the Internet. The LSSI establishes in Spain an Internet regime in line with the European Directive 2000/31/EC, of 8 June, regarding electronic commerce activities and transactions within the European market, as well as European Directive 98/27/EC, 19 May, regarding cessation measures for the protection of consumers. Finally, the LSSI was enacted to foster public confidence in the use of information products and services, and in carrying on electronic commerce in Spain.
Scope of Application
The LSSI applies to commercial activities carried out by “information society service providers.” A broad definition of this designation is set forth which encompasses all types of telecommunications and internet operators, such as:
(1) Telecommunications operators;
(2) Internet access providers;
(3) Operators of portals and search engines; and
(4) “Any other operator which, through the Internet or other electronic means, carries on commercial activities, supplies information, or distributes videos upon individual request.”
Of the activities expressly excluded from the scope of the LSSI, the following are noteworthy:
(1) The exchange of information through the Internet or other electronic means for non-economic purposes;
(2) Legal services provided by notaries, lawyers and court procurators; and
(3) The provision of medical services, including the prescription of medications and other medical products.
The geographic scope of the LSSI extends to service providers established in Spain, in other countries within the European Union or European Economic Space, or in countries outside the European Union or European Economic Space. A service provider will be considered to be established in Spain in accordance with following alternative criteria:
(1) The service provider maintains a residence or domicile in Spain, provided that the residence or domicile corresponds to its administrative and commercial headquarters, failing which, the residence or domicile will be deemed established where such headquarters exist;
(2) The service provider does not maintain a residence or domicile in Spain, but offers information services through a permanent establishment, which will be considered to be established when the service provider habitually or continually maintains in Spain, a plant or physical facility, for the purpose of carrying on its business activities in whole or in part; and
(3) The service provider or one of its branches is registered with the Mercantile Registry or other public registry for the purpose of establishing a legal presence.
The mere use of technological resources located in Spain, without more, will not constitute a permanent establishment in Spain.
The LSSI applies to activities carried on by service providers located in other countries who are members of the European Union of the European Economic Space, when the recipient of the activities is located in Spain, and the activities carried on consist of or affect the following:
(1) Intellectual or industrial property rights;
(2) The transmission of advertisements by collective investment institutions;
(3) Direct insurance activities authorized by law;
(4) Contractual obligations created with individual consumers;
(5) The choice of law regimen applicable to a contract;
(6) The transmission of unsolicited commercial announcements by electronic mail or other electronic means; and
(7) The creation, transfer, modification or termination of real property rights in Spain.
With regard to service providers in countries not belonging to the European Union or the European Economic Space, when the services provided are directed to recipients in Spain, the LSSI will be applied in accordance with applicable international treaties and conventions.
Finally, the LSSI applies to services related to games of chance involving economic consideration, without prejudice to any regime existing at the national or autonomous community level, which specifically governs such activities.
Freedom in the Provision of Services
The LSSI establishes the principle of free provision of services without prior authorization. Nevertheless, the free provision of services is subject to interruption or the removal of content, when it encroaches upon matters of public interest, such as the following:
(1) The public safety and national defense;
(2) The protection of the public health and individual consumers;
(3) Respect for individual dignity, and the principle of non-discrimination based on race, sex, religion, opinion, nationality, disability or other personal or social circumstances; and
(4) The protection of juveniles and infants.
When the need to restrict the provision of services arises, the measures deemed necessary and adopted in defense of the public-interest principle implicated, will be carried out in collaboration with the competent public authority and intermediary service providers. In the event the activity subject to the measures taken originates from a country belonging to the European Union or the European Economic Space, the competent body will require the authorities of such country to adopt appropriate measures, failing which, the competent body will adopt its own measures, provided that prior notification of the intended measures is made to the European Commission, or as the case may be, to the Combined Committee of the European Economic Space. In the case of exigent circumstances, such notification may be made within 15 days following the adoption of measures, and must include an explication of the exigencies involved.
Obligations and Responsibilities of Service Providers
The basic obligations and responsibilities imposed by the LSSI are domain name registration, the supply of information requested by the public or competent authorities, collaboration with competent authorities, and the retention and protection of data. Falling within these general parameters are the following specific obligations and responsibilities:
(1) The public registration of the Internet domain name or names used for the purpose of guaranteeing access by the public and the Spanish government to the link between the service provider, its physical location, and its Internet location.
(2) Service providers must disclose in their websites their identification information, as well as the prices charged visitors for services and products, and must permit the viewing, printing and storing of the general conditions applicable to each transaction, and if applicable, a copy of the contract.
(3) Intermediary Internet service providers (eg. web hosts) must collaborate with authorities responsible for the interruption or removal of illegal activities, services or content, in accordance with instructions received by such authorities.
(4) Intermediary Internet service providers must retain data and traffic records generated by their business activities for a period of 12 months. In this regard, it is only necessary to retain data sufficient to permit the location of the equipment used for the transmission of the information, and such data necessary to identify the origin of stored data and the moment in which the service was provided. In no case does this obligation extend to the retention of confidential communications. Additionally, the service providers must conserve and protect the retained data for official use only on the part of the competent authorities carrying out measures taken in criminal investigations, in national defense or the defense of public security. Finally, the enactment of regulations is envisioned pertaining to the classification of service providers, the specification of the corresponding retention of data, and the time frame and conditions for its retention.
Regarding the different types of intermediary services, the LSSI establishes a general exemption of operators providing such services from civil liability, provided that they have complied with specific criteria, which correspond to each of the following types of service providers:
(1) Operators of networks and access providers;
(2) Service providers that maintain a temporary copy of data obtained by endusers;
(3) Data storing service providers; and
(4) Service providers establishing links to content or search engines.
Commercial Advertisements
With regard to unsolicited commercial advertisements (spam), the LSSI requires that they be identified as such, specifically using the word “publicidad” (advertisement), and prohibits the transmission of such communications by any electronic means without the prior consent of the recipient. Communications consisting of various forms of promotional offers (discounts, prizes, presents, and promotional contests or games) must be clearly identified as such, and must explain the conditions of acceptance or participation in a clear and unequivocal form.
During the electronic contracting of a service or product, if disclosure of the consumer’s email address is required, and the service provider intends to transmit future advertisements to the address, the service provider must inform the consumer of such intent and obtain the consumer’s consent to such future transmissions prior to the conclusion of the contracting process. Such consent given by the consumer may be revoked at any moment by notice to the remittent of the transmissions, and service providers must establish simple and no-cost procedures to facilitate such revocations.
Electronic Contracting
The LSSI pronounces the validity of contracts, and the formation of contractual relationships, by electronic means. This new legal recognition of electronic contracts has been implemented into Spain’s Civil and Commercial Codes, via modifications to Article 1262 of the Civil Code, and to Article 54 of the Commercial Code. Furthermore, electronic contracts will be recognized with respect to all other Spanish laws and regulations, including the provisions of the LSSI, the Civil and Commercial Codes, and the civil and mercantile rules regarding contracts; and in particular, the laws regarding the protection of consumers and endusers, and the regulation of commercial dealings.
An expression or confirmation of agreement prior to the making of a contract via electronic means is not required for the validity and enforceability of the electronic contract. Any provision of law requiring a contract or document to be set forth in writing will be considered satisfied by a contract or document formed and evidenced by electronic means.
Specifically excluded from the above provisions of the LSSI are contracts and documents pertaining to familial rights and successions, as well as contracts and other legal documents requiring public formalities, or the intervention of legal tribunals, notaries, property and mercantile registries, or other public authorities.
Proof of contract formation
In addition to the provisions of Spain’s legislation regarding electronic signatures, the electronic devices or files where the electronic contract is maintained are admissible in a trial as evidence of the contract’s existence. In this regard, the LSSI permits the parties to make declarations stored by a third party regarding their willingness to contract by electronic means, including the date and hour where such declarations were made, provided that such third-party intervention cannot be substituted for the certification of persons licensed to carry out public formalities. Such third parties must store the declarations in an information system for a period of not less than five years.
Applicable law and place of contracting
The law applicable to electronic contracts will be determined in accordance with the established Spanish international private law regime, specifically pursuant to the provisions of Articles 2 and 3 of such regime. Electronic contracts entered into with consumers will be presumed to be formed in the place where the consumer maintains his or her habitual residence. With regard to electronic contracts made between businesspersons or professionals, in the absence of a choice of law made by the parties, the contract will be presumed to be formed in the place where the service provider is located.
Obligations related to the contracting process
Prior to initiating the contracting process, service providers contracting by electronic means must provide the consumer with clear, comprehensible and unequivocal information regarding the following matters:
(1) An explanation of the contracting procedure or steps;
(2) An indication of whether the service provider intends to store the electronic contract, and whether such stored copy will be accessible;
(3) The technical means available to the consumer to identify and correct errors in the submission of data;
(4) The language or languages in which the contract will be concluded; and
(5) Make disclosure to the consumer of the general conditions applicable to the contract, as well as indicate where they may be stored and reproduced.
After the electronic contracting process is completed, the LSSI sets forth the following procedures required to confirm receipt of the consumer’s contract acceptance:
(1) The transmission of a confirmation by email or other electronic means to the address indicated by the consumer during the contracting process, within 24 hours following receipt of the acceptance; or
(2) The transmission of a confirmation via the same means by which the contracting process was carried out, upon the conclusion of the contracting process, and in a form which may be stored by the consumer.
Where neither party to the contract is a consumer, the above requirements will not apply if the parties so contract. Similarly, the above requirements will not apply where the contract is formed solely by exchange of emails or other electronic means, provided that such means are not used solely for the purpose of evading the above requirements.
Codes of Conduct
The LSSI promotes the establishment of codes of conduct by commercial service providers, professionals, and consumer organizations or associations, with the objective of establishing a system of self-regulation. The Spanish government will support this process, in particular at the European and international levels. Suggested as basic contents of such codes of conduct are the establishment of procedures for the detection and interruption of illegal content, the protection of recipients of spam communications, and the use of arbitration and other alternative dispute resolution proceedings to resolve conflicts. The codes developed shall be accessible by electronic means, and their translation into other languages within the European Union will be supported, with the objective of maximizing their circulation and presence.
Cessation Actions
The LSSI authorizes the initiation of actions necessary to interrupt activities in violation of its provisions intended to protect the interests of consumers and endusers. The following are authorized to initiate such actions:
(1) Individuals and legal persons with standing or legitimate interests;
(2) Consumer groups or affected endusers, in proceedings and pursuant to the conditions established in the Law of Civil Procedure;
(3) Consumer and enduser associations satisfying the criteria established in the General Law of the Protection of Consumers and Endusers, as well in any autonomous community legislation relating to consumer protection;
(4) The Attorney General (Ministerio Fiscal);
(5) The National Institute of Consumption and the autonomous and local consumer protection authorities; and
(6) Any other entities located in other countries belonging to the European Union with responsibility for consumer protection, and authorized by the European Commission pursuant to its list entitled “Official Journal of the European Communities.”
Information and Control
The LSSI establishes a governmental collaboration between the Ministries of Science and Technology, Justice, Economics, and Health and Consumption, and autonomous and local authorities, in order to provide information to recipients and service providers, the communication of relevant judicial resolutions, and the enforcement of the obligations established in the LSSI.
The relevant judicial resolutions relative to the LSSI will be issued by the General Council of Judicial Authority to the Ministry of Justice, for the purpose of their periodic publication and communication to the public, as both bodies deem necessary. Significant arbitration awards and decisions of other alternative dispute resolution proceedings likewise will be communicated and published.
The Ministry of Science and Technology will be the competent authority to ensure compliance of the provisions of the LSSI on the part of service providers, and to such end, may conduct whatever investigations deemed necessary in fulfilling its official function. Service providers must cooperate with the Ministry of Science and Technology, and any other competent authorities, in discharging their responsibilities, and must permit authorized representatives and inspectors access to their facilities and respond to requests for documentation made as part of the measures taken, in accordance with the provisions of Article 8.5 of the Law of Jurisdiction in Administrative Proceedings (Ley de la Jurisdicci?n Contencioso-Administrativa).
Infractions and Sanctions
To serve as a deterrent to noncompliance with its provisions, the LSSI establishes an hierarchy of infractions classified as “very serious,” “serious,” and “minor.” Among the infractions considered very serious are the following:
(1) An intermediary service provider’s noncompliance with instructions to suspend specified services received from the competent administrative body;
(2) An intermediary service provider’s failure to retain data as required by the provisions of the LSSI; and
(3) An intermediary service provider’s unauthorized use of retained data.
The following infractions are classified as serious,
(1) A service provider’s noncompliance with the obligation to supply endusers or competent authorities with its general identification information, such as business name, physical address, and Internet address;
(2) Failure to supply clear and complete information regarding the prices and other charges for products and services sold by electronic means;
(3) The mass-mailing of unsolicited and unauthorized commercial advertisements, or the transmission of three unsolicited and unauthorized commercial advertisements to the same recipient;
(4) The failure to disclose the general conditions applicable to contracts with consumers;
(5) The repeated failure to confirm receipt of contract acceptances from consumers; and
(6) Resistance, excuse making or denial with respect to investigative requests made by competent investigative authorities.
Among the infractions classified as minor, the following are noteworthy;
(1) The failure to provide domain name or names, or Internet addresses, to the public registry ;
(2) The failure to include mandatory indications in the transmission of commercial advertisements;
(3) The transmission of unsolicited and unauthorized commercial advertisements not constituting a serious infraction; and
(4) The failure to provide mandatory information prior to the initiation of the contracting process with a consumer.
Serious infractions are subject to a fine of between 150.001 and 600.000 euros. In the event two or more serious infractions, with a final disposition carrying sanctions, are committed in the period of three years, the ability to operate in Spain may be prohibited for a maximum period of two years. The commission of serious infractions is subject to a fine of between 30.001 and 150.000 euros, and minor infractions are subject to a fine of up to 30.000 euros.
The amount of the fine will be determined in accordance with the following criteria:
(1) The existence of intentional conduct;
(2) The amount of time the infraction continues;
(3) The commission of repeated infractions evidenced by final resolution;
(4) The nature and amount of harm caused;
(5) The benefits obtained as a result of the infraction; and
(6) The magnitude of accounts receivable attendant to the infraction.
With respect to infractions committed by service providers not established in countries belonging to the European Union or the European Economic Space, a sanction interrupting access to the Spanish market may be imposed with respect to the offered services, for a maximum period of two years in the case of very serious infractions, one year in the case of serious infractions, and six months in the case of minor infractions.
In the case of infractions classified as very serious or serious, the following provisional measures may be included as part of the sanction imposed by the competent judicial authorities:
(1) Temporary suspension of the service provider’s activities, and in such case, the temporary closure of its business establishment;
(2) Closure, withholding or seizure of registries, equipment, apparatus, files and documents; and
(3) The issuance of a public notice of the measures taken.
In exigent circumstances, the above provisional measures may be initiated prior to the commencement of punitive proceedings, provided that the punitive proceedings are commenced within 15 days following the adoption of such measures. Furthermore, a fine not to exceed 6.000 euros may be assessed for each day of the service provider fails to comply with the measures adopted.
The infractions set forth in the LSSI may also give rise to the imposition of criminal sanctions. In the event that criminal proceedings are pending, which are based on the same facts as those sanctionable under the LSSI, the LSSI punitive proceeding will be stayed until final resolution of the criminal proceedings by the competent judicial authority. The commencement and continuation of punitive proceedings, or the imposition of a sanction pursuant to the provisions of the LSSI, will not prohibit the commencement of other proceedings and the imposition of additional sanctions pursuant to other law, provided that there cannot be identity in the rights or property subject to double sanction based on the same facts or conduct.
Miscellaneous
The LSSI requires the Spanish government to adopt measures necessary to permit access to information maintained on it websites by persons with disabilities or of advanced age.
Finally, the LSSI summarizes the registration system of domain names terminating with the “.es” designation, in accordance with the National Plan of Internet Domain Names, pursuant to which the public entity Red.es is authorized to assign such Internet domain names.
