Ecommerce in North Macedonia

I. E-commerce sector – fact and figures

North Macedonia is no exception regarding the dynamic growth in e-commerce, which growth has been further boosted by the COVID-19 pandemic. According to the Annual Report of the Association for E-commerce for 2020 for North Macedonia, the value of online transactions in 2020 was up 56% compared to 2017 and the number of online transactions in 2020 was up 56.4% compared to 2017. According to the same report, the number of internet selling points based in North Macedonia (“e-selling points”) in September 2020 was 1,342, up from only in 2018.

The growing role of the e-commerce market had also triggered some actions by many authorities and associations, which aimed to recognise the value and importance of e-commerce, such as the recently launched platform “Ecommerce4all”, co-funded by the United States Agency for International Development (“USAID”). Among other activities, this platform included the development of a free educational web platform which aggregates the necessary information for starting and steering an e-business (www.ecommerce4all.mk). 

II. Setting-up e-commerce business

1. Is the established local presence of a foreign company required to start selling online?

There are no significant barriers preventing foreign companies from conducting e-business in North Macedonia. There is no strict legal need for a business entity to establish a local presence: products and services can be sold from abroad. However, foreign entities also may undertake such activity through a subsidiary or local branch.

According to the Macedonian Law on electronic commerce (the “Law on E-commerce”), each trade company that acts in North Macedonia should render its services in compliance with the laws and other relevant regulations in North Macedonia. 

If the commercial activity specifically targets Macedonian consumers or advertising (marketing) is directed specifically to consumers in North Macedonia, the commercial, advertising and marketing activity must comply with Macedonian consumer legislation, and if relevant the Macedonian audio-visual and media regulations, even if the business entity does not have an established presence in North Macedonia.

2. Are there any licence/permit requirements applicable to e-commerce businesses?

According to the Law on e-commerce, no special authorisation, approval or concession is required for e-businesses. However, each e-business must obtain (if applicable) the approvals that should be obtained in accordance with other regulations to commence a bricks-and-mortar business.

3. What e-commerce specific contracts must be concluded before starting an e-business?

The Law on E-commerce does not stipulate specific contracts that must be concluded before starting an e-business in North Macedonia that differ from the regulations that apply to starting a bricks-and-mortar business. 

However, even if e-commerce is only an extension of the bricks-and-mortar activity, and the business already has various contracts in place, there are some specifics for setting up an own e-commerce platform that must be addressed.

  • Domain name: The domain name serves as an address for the e-commerce business. A wide choice of national domain extensions is available (.mk/.мкд).
  • IT-related services: A smooth ordering process is one of the key elements of creating a good customer experience. To achieve this, the e-commerce business has to ensure an appropriate level of IT services.
  • Payments: Cash on delivery remains a popular payment method; however, a wide array of electronic and non-cash payments are also available to e-commerce businesses. These include payments by various types of credit and debit cards, electronic wallets, mobile money, and alternative currency payment processors. 

III. Key considerations for running e-commerce

1. Defining the audience: does the business need to decide upfront if the e-commerce website addresses consumers and/or professionals?

The Law on E-commerce does not specify an obligation for defining the audience upfront in cases of addressing consumers and/or professionals. However, Macedonian consumer protection law and Macedonian audio-visual and media law could also apply.

2. What are the mandatory elements of an e-commerce business website?

According to the Law on E-commerce, offering, acceptance and contracts (“e-contracts”) can be made by electronic means, i.e. in an electronic form. However, there are exemptions for some types of contracts that cannot be made in electronic form, such as contracts that: (i) are regulated by family and/or inheritance law; (ii) are made for establishing or transferring real estate rights, except for rights to rent; (iii) include courts, notaries, and similar professionals; and (iv) are made for guarantees and additional securities that are granted by individuals that act outside their commercial, work or professional engagement.

Before entering into an e-contract, the provider of goods/services by electronic means (the “e-provider”) should provide the following information to the end-user: (i) technical procedures to be followed to enter into the contract; (ii) contents of the contract; (iii) general conditions of the operation, if those constitute an integral part of the agreement; (iv) whether the contract will be archived by the e-provider and whether it will be available; (v) the technical means for recognising and correcting incorrectly entered data before the order is placed; and (vi) the languages in which the contract is offered. In addition, the contractual relations resulting from or related to e-contracts in North Macedonia are subject to the Macedonian Law on Contracts and Torts.

Macedonian law does not stipulate the mandatory elements of an e-commerce website. However, general rules of Law on Contracts and Torts could be relevant

3. Is it mandatory that the website information be provided in the local language?

In general, Macedonian legislation requires that any business communication with Macedonian consumers must be in the national and official language of North Macedonia (Macedonian). However, under certain conditions the Albanian language can also be treated as an official language in North Macedonia. This also applies to the advertising practices.

4. Are there specific restrictions that impact on the selection of products offered for online purchase?

Product selection is an important aspect of e-commerce that needs to consider specific national restrictions. These may be product-specific restrictions that apply in all sales channels, such as the obligation to obtain a relevant authorisation in the case of selling or distributing certain products. 

On a separate note, at the request of an entity whose rights have been infringed by a certain e-service, the Ministry of the Economy, the Ministry of Administration and Electronic Communications, the Agency for Electronic Communications, or a competent court (“relevant responsible authorities”) should take measures to limit the freedom to provide e-services to e-providers who cause or may cause damage, if the measures are necessary to protect:

  • the public interest, especially the protection, investigation, and identification of a crime and initiating criminal proceedings, including the protection of minors and fighting against any type of race, sex, religion or nationality-based hatred, and infringement of human dignity regarding individuals;
  • public health;
  • public safety, including the protection of national security and defence; and
  • consumers, including investors.

Before taking measures to limit the freedom to provide information services for e-providers with their registered seat in an EU-member-state, and without prejudice to court procedures, including investigative actions and acts implemented in a criminal investigation, the relevant responsible authorities should: (i) request that the other country takes measures, if it failed to take such measures or if they were inappropriate; and (ii) inform the competent bodies of other EU member states and the European Commission regarding the intention to take such measures. 

In an urgent case, the relevant responsible authorities may make an exception from such obligations and take measures to limit the freedom to provide e-services and the e-providers with their registered seat in an EU member state. In such case, the relevant responsible authority should as soon as possible notify such measure and its reasons to: (i) the relevant responsible authority of the EU member state where the registered seat of the e-providers is located; and (ii) the European Commission. However, this does not apply to courts and court decisions.

Thus, it is crucial to check that all of the requirements are in place concerning the online sale of the relevant products on a case-by-case basis.

5. Do special rules apply to product returns and defective goods?

There are no special rules that apply to e-businesses regarding product returns and defective goods that differ from the general customer protection rules in North Macedonia.

As a rule, “commercial communication” is a form of communication created for the direct or indirect promotion of products, services or reputation of a company or a person engaged in trading or craftsmen activity. 

As an exception, according to the relevant Macedonian law, the following does not constitute a commercial communication: (i) a communication that makes available direct access to the activity of the legal entity that communicates it, in particular the name, address and electronic mail address; and (ii) a product-, service-, or reputation-related communication that is carried out in a way that is different than electronic, in particular when this does not include financial compensation.

According to the relevant Macedonian law, in the case of commercial (marketing) communications, the e-businesses should ensure that the commercial communication complies with the following conditions: (i) it is easily identifiable that it is for commercial (marketing) purposes; (ii) it is easily identifiable on whose behalf the commercial communication is made; and (iii) any promotional offer in the commercial communication (including discount and gifts) may be identifiable, available and clearly and unambiguously presented. 

7. What are the main competition risks regarding online selling?

According to the Law on e-commerce, there are no additional provisions for online selling that would apply apart from the provisions of Macedonian Law on the Protection of Competition and Law against Unfair Competition.

According to the Law on e-commerce, no specific legal considerations are relevant to the financial services provided to e-store customers.

As stated above, the relevant authorities that are responsible for legal enforcement regarding e-commerce businesses are the Ministry of the Economy, the Ministry of Administration and Electronic Communications, and the Agency for Electronic Communications, each within their competencies as defined in law. 

The State Market Inspectorate, acting through its competent inspectors, can also conduct inspection supervision in accordance with the Law on the State Market Inspectorate and the Law on E-commerce.

The fines stipulated in the Law on E-commerce vary between EUR 300 and 5,000. 

10. What is the landscape for  private enforcement of consumer rights in the context of e-commerce?

According to Macedonian Customer Protection Law, any authorised body may propose that the State inspectorate initiate court proceedings against an entity that breaches the Customer Protection Law. 

The authorised bodies that can propose such proceedings are determined by the Government of North Macedonia, on the proposal of the Minister of the Economy, and may be initiated against a sole proprietor, group of traders, chambers, or other trade associations from the same economic activity that have acted against the provisions of: (i) the Customer Protection Law; (ii) the Law on Contracts and Torts; and (iii) rules for misleading market conduct according to Customer Protection Law. 
A significant role in the private enforcement of consumer rights in North Macedonia is played by the consumer organisations who support consumers in asserting their rights. The most active consumer organisation in North Macedonia is the Organisation of Consumers.

Additionally, if the conduct of certain traders based in North Macedonia is contrary to the provisions of the Customer Protection Law or affects or may affect the position of consumers in a member-state of the European Union, the commencement of proceedings may be proposed by an association for the protection of consumers from such EU-member-state or other independent body which, according to the regulations of that state, is established to protect the common interests of consumers.

On a separate note, class actions are not specifically regulated in North Macedonia yet. However, draft-legislation which regulates the class actions as specific type of action is being drawn up.

Finally, an e-provider and its users may agree on arbitration as an alternative dispute settlement method. Such arbitration procedure would be governed by the relevant Macedonian arbitration regulation.

There is no publicly available information regarding legal developments in the near future affecting e-commerce businesses, apart from the constant harmonisation of Macedonian Law with the European acquis.

Portrait ofMarija Filipovska
Marija Filipovska Jelčić
Partner
Skopje
Zlatko Kujundjiski