Ensuring Consumer Safety Shouldn’t Impede E-Commerce
Fountain pens pose little danger to consumers compared to say children’s toys. But the European Union looks set to impose the same product safety regulations on both types of products. This is a mistake.
The European Commission proposed in July 2021 new rules for the safety of products. The General Product Safety Regulation (GPSR) introduces specific obligations for thousands of online marketplaces from appointing a single contact point in the EU to the traceability of traders. If done right, the new rules can be an opportunity to improve consumer safety while enabling e-commerce growth in Europe.
Here are six elements EU lawmakers will want to get right:
• Measure Real Risk: The present proposal follows the precautionary principle and treats all products the same despite their very different levels of risk. This should change. EU law already divides products into two categories: the “harmonized ones” have specific compliance requirements due to their nature and potential risk (such as cars or toys). The existing product safety rules apply to “unharmonized products”. The GPSR also covers harmonized products when targeted regulations have gaps. Therefore, the scope of the new rules covers an “infinite number” of products. The addition of the risk-based approach would enable the prioritization of products that are the most likely to be dangerous for EU consumers.
• Specify Obligations: Online marketplaces have supported the growth of the e-commerce sector while creating a new role in the supply chain. In 2020, 73% of European internet users shopped at least once online. This trend will continue to accelerate as many traders began selling online during COVID-19. The proposed GPSR recognizes that they do not have any control over the products that are sold on their platforms. Marketplaces’ business models are diverse. Online marketplaces should benefit from specific obligations, especially since their other activities, such as warehousing, will be covered by other parts of the regulation.
• Encourage “Good Samaritan” Efforts: The GPSR should support and incentivize the continuous efforts of marketplaces to remove unsafe products. The orders and notices from authorities should contain actionable information. Improving the EU Safety Gate portal would allow more automatic checks. Voluntary commitments, such as the EU Product Safety Pledge, are useful tools enabling marketplaces to make further commitments.
• Realistic Obligations: The GPSR should not restrict traders from doing business in the EU. Policymakers should consider how well-intended ideas might lead to unintended consequences. For example, the traceability of traders should be more proportionate to take due account of the variety of their business models (from micro-enterprises to well-established brands) and of the products they sell (e.g. refurbished products). Creating unrealistic obligations for small traders will only restrict the choice of European consumers.
• Ensure Consistency: The GPSR should avoid contradicting existing and upcoming EU law. For example, the new product safety rules should specify marketplace obligations for product safety in a way that follows the horizontal framework of the Digital Services Act (DSA). In particular, marketplaces should be given sufficient time to respond to authorities’ notices in order to avoid potential over-removal. European product safety notifications should contain precise information on the location, model, and batch number of the dangerous products – information which often now is missing.
• Allow Sufficient Time for Implementation: The proposed GPSR should give enough time for all the actors in the ecosystem to properly adapt to the new rules. Marketplaces will notably need to implement brand new rules. 24 months would allow sufficient time to implement the GPSR.
Both marketplaces and EU policymakers share a desire to ensure the safety of European consumers online – all while encouraging small European companies to sell online. The proposed GPSR needs to focus on the riskiest products, take stock of how the online value chain works, and be consistent with existing initiatives. In this way, the GPSR will benefit both consumers and businesses.