Changing Landscape of ODR Under the European Union’s New ADR Directive

Introduction

For almost a decade, the European Union’s (EU) single-entry ODR platform had been a global reference point for online dispute resolution (ODR) frameworks as one of the earliest attempts at a centralised, multi-lingual cross-border ODR platform. Operational since 2016, the platform efficiently provided specialist services for disputes arising from cross-border online purchases or services for consumers and traders within the Union.

However, by late 2024, the Council of the EU acknowledged that the platform had failed to justify its cost or fulfil its mission. On 20 July 2025, the ODR platform was permanently closed, pursuant to Regulation (EU) 2024/3228. At the same time, the Council proposed changes to its existing ADR Directive that has been in force unamended since 2013, in order to accommodate changing consumer trends and to increase efficiency in ADR across the EU. These amendments entered into force in the form of Directive (EU) 2025/2647 in December last year.

In this blog, I explain why the EU shut down its flagship ODR platform, what the new 2025 ADR mandate introduces, and how the EU and its Member States can structure an ODR model moving forward to maximise efficiency and interoperability.

Why the ODR Platform was Discontinued

The EU’s ODR platform was introduced in 2016, when there was no assurance of the adequacy of public or private digital tools to assist consumers and traders to access ADR. Through the centralised ODR platform, consumers all across the EU could request online traders based in the EU to solve a dispute using ADR.

However, by the late 2010s, the online market had outpaced regulators. The ODR platform became irrelevant due to the rapid development of online complaint-handling systems of digital marketplaces. Thus, despite a high number of visits, the ODR platform was only enabling 200 cases a year to be treated by an ADR entity.

The low consumer use of the platform was coupled with an even lower acceptance rate by traders, with only 2% of the complaints receiving a positive reply from traders, agreeing to resolve the dispute through ADR. An evaluation of the EU’s 2013 ADR Directive revealed that cross-border ADR procedures were ‘rarely used’ owing to the numerous ‘barriers that exist when using those procedures in a cross-border context’.

Keeping in mind the failure of the ODR platform to ‘justify the public and private costs required to maintain it’, in November 2024, the Council decided to shut it down and removed the related requirements for administrations and online businesses.

Changes under the New ADR Directive

On 17 November 2025, the European Council gave its final assent to the adopted text of the Consumer Alternate Dispute Resolution Directive that intends to update, simplify and enhance the existing ADR framework. The final Directive entered into force on 30 December 2025 and must be transposed by Member States by 20 March 2028 by enacting domestic implementing legislation. As on date, no Member State has notified transposing measures.

One of the key changes that the new Directive introduces into the EU’s ADR landscape is that consumers will now be encouraged to access ADR procedures even when there has been a breach of pre-contractual obligations. Another progressive reform is the inclusion of services where consumers “pay” with personal data under the purview of actionable contracts (Recital 13 of the Directive). This entails that non-traditional online services where the consumers do not pay for services with money, but with their personal data, will also be treated the same as traditional sale or service contracts.

The most significant change under the new Directive is the expansion of the framework to non-EU traders who trade in an EU Member State. This is a step taken by the Directive to accommodate the expansive nature of e-commerce since 70% of Europeans ‘regularly buy products online,’ often from traders outside the Union.

Recital 40 of the new Directive recommends the creation and promotion of a user-friendly digital interactive tool that ‘provides information on consumer redress, including information on using ADR in cross-border context, as well as links to information on consumer rights.’ The tool will also provide machine-translation services and consolidate a list of national ADR contact points, that is, ADR entities notified by the European Commission. This digital tool is meant to replace the ODR platform and is expected to majorly act as a navigational tool between ADR/ODR entities in all Member States.

Finally, the new Directive also anticipates the growing use of artificial intelligence and chatbots in ODR, and mandates a standard of transparency and fairness by guaranteeing parties a right to human review of automated outcomes (Recital 21).

What the EU can Learn from Other Jurisdictions

In facilitating ODR under the new Directive, the EU must avoid the flaws that resulted in the failure of the 2016 platform, and ensure a more productive and resourceful ecosystem. However, unlike a regulation, a directive does not apply directly in the Member States. It binds them to the result to be achieved but leaves the choice of form and method to national authorities. Therefore, the EU and its Member States must consider the following when implementing and transposing the new Directive:

1.      Interoperability and Standard Setting

To ensure consistency and predictability in application and enforcement of ODR outcomes, any resolution arrived at through ODR entities should carry the same weight in all Member States. Where an ADR outcome is binding under national law, it should be recognised and enforceable on equivalent terms across the EU. Where it is non-binding, entities should at least be held to common procedural standards so that a settlement carries credibility regardless of where it was reached.

Private ODR service providers might be well-positioned to develop innovative dispute resolution services, but they must be held to a certain standard of consumer-centricity, transparency, and security that must be centrally determined and approved by the Council. This would increase credibility amongst consumers and encourage local entities to adhere to equitable standards.

The Commission should use the data collected from the ODR platform over the years to recommend a standard of best practices to be implemented by Member States, much like the OECD or UNCITRAL. These standards may be adopted by its Member States based on local needs or sector-specific requirements.

2.      Dispute Triage

The OECD defines a ‘diagnosis and dispute triage’ as a system that identifies, assesses and categorises cases on the basis of ‘their suitability to legal requirements, dispute resolution mechanisms, and the legal and justice needs of users.’ The digital tool meant to replace the ODR platform in the EU should be structured to perform the function of a triage mechanism by helping users identify relevant information and recourses for their legal issues. Additionally, integrating AI with such a triage system can increase efficiency and reduce costs while ensuring that consumers get quick and unbiased advice on the competent ODR/ADR processes to approach.

3.      Extend ODR to SMEs and Microenterprises

In the new Directive, the EU acknowledges that small and medium-sized enterprises (SMEs) suffer similar power imbalances in digital markets as consumers. Given the reduced capacities and resources available to smaller businesses, the cost as well as the procedural burden of conflict resolution is relatively higher when compared to larger enterprises.

The EU should go further in protecting these vulnerabilities. For instance, France employs 4,000 digital advisors (conseillers numériques) who are trained to support access to online services for people and SMEs. The initiative aims to encourage stakeholders to embrace digital transformation by helping people and businesses to access and learn how to use online services in their day-to-day lives. A similar model could be adopted across all Member States to integrate ODR as an efficient and effective way of dispute resolution that protects the interests of vulnerable parties, like SMEs.

Conclusion

The EU’s decision to discontinue its ODR platform and reform its ADR framework marks a decisive shift. Instead of relying on a single, centralised mechanism, the Union will now build a more flexible and decentralised, digital tool that is better capable of adapting to rapidly evolving digital markets. The 2025 ADR Directive represents an important first step in bringing the EU’s CADR framework up to speed with changing digital markets and consumer trends.

In the backdrop of these reforms, the EU could take inspiration from other ODR frameworks like the OECD and UNCITRAL to regulate and standardise its own ODR system. Setting EU-level certification standards, designing a digital tool capable of meaningful dispute triage, and strengthening digital assistance infrastructures across Member States would help create a system that is much more accessible and efficient, and also more trusted by consumers and traders alike.