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A start-up by any other name: lastminute troubles
The much-publicised and hyped IPO of online travel firm, Lastminute.com has successfully overshadowed its recent legal problems in Germany. The trouble lies with the German definition of the 'lastminute' name. Joey Gardiner wrestles with the semantics

By Joey Gardiner

Published: Monday 13 March 2000

Spontaneity, adventure, a sense of life and fun - this is what it means to do something Lastminute.com in Britain (or that's what the marketing execs would have you believe).

But not so in Germany.

A source involved in the launch of Lastminute.com in Germany told Silicon.com it was difficult to translate its proposition to a country where the phrase "last minute" implies ill-preparedness, haste, and a lack of planning. The successful start-up's core strength in the UK - the "lastminute" brand - became a problem.

And now it has emerged this week that Lastminute.com faces a new and more tangible challenge - it is being taken to court by a competitor for alleged breaches of German consumer protection law. The last thing it needs as it comes to IPO.

German last minute travel operator L'Tur Tourismus says the use of a generic Web domain such as Lastminute.com is misleading to consumers, implying it is the only operator of such a service, or an aggregate site. It has a German legal precedent to back its case, and wants to force Lastminute.com to change its name. A spokesman for L'Tur said it would use every legal avenue available to defend its market share.

Lastminute's woes indicate the difficulties of doing business in a global environment where your potential consumers not only operate in a different language and a different culture, but also have different regulations protecting them.

The rise of ecommerce has highlighted these problems as never before. Where in the past you would probably make a purchase from France if you were a company buying supplies or a tourist on holiday in the Riviera. However, now you can just as easily buy a book or a CD from Paris as you can from London - and it may well be cheaper. Suddenly, companies have to be aware of the legislation that controls purchases in other countries, and the different culture operating around those consumers.

The fact that this case is happening in Germany is no surprise to many. German regulations governing how companies promote themselves are notoriously strict. Companies are forbidden from any promotions related to the sale of goods - such as "buy one get one free" type offers - or to do anything that is any way judged to mislead the consumer. A nice idea you might think, but it is widely recognised the law is used to protect established players' market share.

Mike Pullen, ecommerce lawyer from Dibb Lupton Alsop said: "These laws are meant to be about protecting consumers, but in practice they are about protecting companies. On the basis of these rules, most British sites capable of selling to German consumers could have an injunction slapped on them. What happens in practice is that these cases come to light as soon as the start-up starts taking market share."

Similar problems could also occur in France, Belgium and Italy, if regulatory rules are enforced.

Lindsey Greig, editor of newsletter 'Ecommerce Law and Policy', said the court case highlighted the major problems still to be addressed to get ecommerce off the ground. "When it comes to cases such as these, the laws really have to be addressed by the European Commission - at the moment this is a barrier to entry into markets," he said.

However, if we wait for the European Commission to act, we may be waiting a long time. Lionel Stanbrook, deputy director of the UK Advertising Association said: "The politicians and the legislators are still sitting back and wondering what's going on with ecommerce, no-one's actually changing their behaviour at the moment."

Of course its not just a German, or a European problem. Contrasting state laws in the US continue to cause problems there, and issues of data protection disrupt trade with the EU. In a recent case, a US citizen now faces up to 19 years in prison after contravening state laws by setting up an offshore gambling company.

Which brings us back to the original question of the difficulties of trading across national and cultural boundaries. The EU is trying to introduce a rule of origin in which companies can only be pulled up on regulations which exist in their own country. However even if this goes through, it will not necessarily stop individual countries from trying to enforce their rules to foreign players.

One thing that is certain is that we will see an increasing number of these types of cases in the next few years, and the development of ecommerce will be profoundly impacted by the precedents set by their outcome.

Lionel Stanbrook warned: "If these cases go the wrong way within the EU then the World Wide Web will quickly become the Nationwide Web."

Whatever way the Lastminute.com case, and others like it, go, it may yet prove that the biggest obstacles to international ecommerce are the cultural barriers that change Lastminute.com into a byword for bad planning in Germany.

It may be worth bearing in mind for Martha Lane-Fox et al, that plans for expansion into America could also be scuppered. To go last minute in the US means to pay well over the odds, not get a bargain.