An emergency EU meeting has been set for early September to hammer out a directive which would enable all companies to trade online in a single market.

The 9th September summit is vital to the future of European ecommerce, according to Mike Pullen, EU specialist lawyer at Dibb Lupton Alsop. He says that if no agreement is reached on a new directive, online trade could be set back by as much as 20 years.

"The directive is important as it removes the legal uncertainty for ecommerce traders. The directive means that if you comply with the law of the country in which you are based you'll be able to trade through all 15 EU member states without worrying about the other 14 countries which may be more difficult or strict," he said.

Current law - known as the Brussels and Rome conventions - focuses on the location of the consumer, not the servers that they are accessing. Therefore any ecommerce operator needs to comply with the laws of every possible country they trade in, rather than their own home country.

The Brussels convention thereby enables foreign consumers to sue e-traders in their own jurisdiction through their own courts. However, the Rome convention presents a bigger problem.

"The Rome convention is potentially more dangerous as it leaves e-traders subject to the unfair competition laws in certain jurisdictions. For example if a UK company is offering a two for the price of three on its Web site, which is perfectly legal under UK law, it may be breaching another country's unfair competition laws and might face sanctions," Pullen says.

The onus is now on the government and industry representatives attending the summit, to modify the Brussels convention and scrap the Rome convention, he added.