Its aim is to remove obstacles to cross-border online services in the EU internal market and provide legal certainty for businesses and consumers.

Finally, the Directive encourages the drawing up of voluntary codes of conduct and includes articles to enhance cooperation between Member States.

There was wide-ranging discussion within EU institutions about how to revise this directive which finally happened with the adoption of the Digital Services Act 2022.

[1] In the 1990s, when the general public started using the internet on a larger scale, the European Commission decided to set up a framework to remove obstacles to cross-border online services in the Internal Market.

[3] In order to address this issue, as well as promote electronic commerce in the EU and enhance competitiveness of European service providers, the e-Commerce Directive was adopted in 2000.

Recital 18 adds that when a service is free to the consumer, that does not mean that it falls outside the scope of the e-Commerce Directive in so far as it represents an "economic activity […] such as those offering on-line information or commercial communications, or those providing tools allowing for search, access and retrieval of data".

[7] The European Court of Justice also attempted to clarify whether collaborative economy services are included in the personal scope of the Directive.

Derogations to this principle are possible on a strict case-by-case basis under the conditions set out in Article 3 e-Commerce Directive, also referred to as the notification mechanism.

[14] Under this mechanism, a Member State has to take the following steps when it intends to act against an information society service established in another Member State: Article 3 does not apply to intellectual property rights, consumer contracts, freedom of parties to choose the applicable law, the validity of contracts in real estate and the permissibility of unsolicited commercial communications by electronic mail.

[15] Article 4 e-Commerce Directive establishes that information society service providers may not be made subject to prior authorization by Member States before starting any activities.

The safe harbors do not prevent intermediaries from taking measures against the infringement of third party rights, either through injunctions or duties of care, as was set out in case law and various legal instruments.

[30][19] The European Court of Justice has added a further dimension in the Google France and L’Oréal cases, where it established that only "passive" or "neutral" hosts may benefit from the safe harbour.

[19] In order for actual knowledge to be triggered for the purpose of article 14 e-Commerce Directive a notification needs to be sufficiently precise and adequately motivated.

[24] Finally, in order to benefit from the liability exemption under Article 14 of the e-Commerce Directive, upon obtaining actual knowledge hosting services are required to act expeditiously against the notified illegal content.

[35] This was further substantiated in the Telekabel case, where the Court held that a filtering injunction which was strictly targeted and did not breach fundamental rights was allowed.

[37] Member States can only impose such duties of care when they can be reasonably expected from online intermediaries and are included in national legislation.

Additionally, criticism has been voiced that the limited liability regime promotes the takedown of content without proper scrutiny and that there is not enough regulatory oversight and cooperation.