Digital handel

Dangerous products and unfair competition from online marketplaces

Dangerous and unsafe products are sold from 3rd country sellers on online marketplaces undermining consumer safety and reputable European traders. The Nordic Commerce Sector therefore calls for new rules for online marketplaces selling goods. A study of 50 purchases from online marketplaces documents the problems.

På agendaen

Online marketplaces are popular among European consumers. They have given sellers easier access to consumers in other countries and consumers have benefitted from a broader range of choices and lower prices.

However, at the same time, the online marketplaces have opened the European market to sellers from 3rd countries that have no experience with EU legislation or the safety net of consumer and product safety rules applying when selling goods into the EU. As such their products often do not comply with EU rules on product safety and consumer rights. These sellers from 3rd countries frequently undervalue their packages to avoid paying EU VAT.

European surveillance authorities do not have jurisdiction or remedies to hold sellers outside the EU liable for these violations and the online market places claim that these violations have nothing to do with them. There are billions of these kind of products for sale on the popular online market places – and it is impossible for enforcement authorities to control.

This situation undermines consumer safety and the internal market as a place where consumers can shop online trusting they are protected by EU consumer and product safety rules. At the same time, it exposes reputable and compliant European traders to unfair competition. In addition, the missing VAT payments undermines the tax revenue of the EU Member States.

The Digital Services Act and the revision of the e-commerce directive

The present situation is unacceptable and call for new and clear legislation. The Nordic Commerce Sector has made a joint paper calling for new rules for online marketplaces and platforms that facilitate the sale of tangible goods.

There is a common misunderstanding that the e-commerce directive gives platforms and online marketplaces an automatic exemption from liability just because they are platforms and marketplaces. Therefore, there is a need for a revision and clarification of the e-commerce directive setting up criteria for platform liability regarding product compliance, consumer rights and consumer information on the marketplace. Failing to do this will put consumers in danger and distort competition to the damage of compliant European economic operators such as manufactures, importers, distributors and retailers.

The study of 50 purchases on online marketplaces

To illustrate the problem The Danish Chamber of Commerce has made a study of 50 purchases of products, mainly toys, from third party sellers on the three large online platforms Wish, Alibaba and Amazon. Several of these toys have been tested by certified laboratories. Although the purchases are made from Denmark the findings are general.

The study revealed that:

  • 46 did not comply with EU Product Safety rules 
  • 50 did not comply with EU consumer rights  
  • 0 showed a match between the name of the seller on the platform and the sender of the package 
  • 42 products are warned about and/or recalled by national and/or EU authorities. We have received no notification hereof from any of the 3 platforms 
  • 38 identical products or products appearing identical to the recalled products were still available after the warmings
  • 46 had a different value written on the package than the price paid.
  • 0 of the 16 VAT-guilty packages had paid the VAT due to an undervaluation of the package

The study also consists of 3 memos which go in detail with the purchase of 3 products on each platform. The memos documents that the EU Voluntary Product Safety does not work:

  • Dangerous toys were sold even though they had been placed on the EU Safety Gate / RAPEX for more than a year – and they are still sold as to this date.
  • If a product link from one seller is taken down, it does not say why. It would say “currently unavailable” and the platform instead recommends the buyer to buy again from other sellers offering the same dangerous toy.
  • After the platform has promised the authorities and medias to remove dangerous toys/products consumers receive marketing e-mails promoting the similar or the same products.
  • The package labels often include a standard text where the seller “certify” that the content is not dangerous and complies with the rules, even when the content is dangerous and non-compliant.

Table overview of 50 products bought on 3 platforms

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Unsafe products Amazon 30.04.20

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Unsafe products Wish 30.04.20

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Unsafe products AliExpress 30.04.20

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FINAL - Revision of the E-commerce directive_DSA_The position of the Nordic commerce sector

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Wiggin - Danish Chamber of Commerce - Online Marketplaces 19 May 2020

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