GPSR and DSA mark a turning point for product safety, but the liability gap needs closing
With the Digital Services Act approved and political agreement on the General Product Safety Regulation reached, we are living through a legislative turning point when it comes to product safety. After decades of outdated legislation and numerous tests detecting unsafe products, here is an opportunity to step up and make sure every product on the market is a safe one.
However, we are not there yet. As a strong liability regime to underpin the system is still lacking, all eyes are now focused on the upcoming review of the Product Liability Directive. And as always, strong enforcement will be the key to shopping for safe appliances, clothes and toys online.
GPSR and DSA boost consumer rights to product safety
Consumers have a right to safe products, regardless of whether they shop on the high street, direct with an online retailer or via a trader on an online platform.
Online marketplace platforms like Wish, Amazon, AliExpress or eBay are fast becoming the main shopping centres for consumers who appreciate the smooth and fast service and low prices. These platforms make up an average of 50% of online consumer transactions across Europe, facilitating third party sellers, payment and delivery services for millions every day.
Purchases might be quick and easy but shoppers lack protections when faulty or poor quality, unsafe products land on their doorstep. More effective and much clearer legislation and enforcement is needed to make sure consumers can have convenience and confidence when they click to buy. And engaging with the platforms at the heart of the consumer experience is increasingly important.
Euroconsumers is involved on both sides - making the best of its members’ long experience in product testing to flag up safety issues to online marketplaces, plus leveraging its expertise to ensure, together with BEUC, that loopholes in product safety and liability laws are closed.
Pilot Product Safety Pledge
Euroconsumers has a long experience in running safety tests, it’s in the DNA of all our national members. For example, last month, our Spanish organisation OCU tests found unsafe Halloween costumes on sale for children. In the past our organisations have found dangerous faults with USB chargers, adapters, children’s toys, smoke alarms and teeth whitening products. At the moment, all these harmful things are available to purchase at a click of a button.
Euroconsumers is part of a new pilot project announced last week at the European Commission’s Digital Consumer Event 2022. Results from Euroconsumers’ regular product testing will be used to flag unsafe items and to quickly remove them from online marketplaces associated with the Product Safety Pledge.
To date, when a product fails our safety tests, Euroconsumers’ national members in Spain, Belgium, Italy and Portugal have alerted the product manufacturer, consumers and product safety authorities. Now the online marketplaces will also be included in alerts so that they can quickly remove the product from sale.
“We want our tests to have a bigger impact, extending alerts to online platforms means less unsafe products on the market. Every unsafe product we can take off thanks to this direct engagement with online marketplaces, is one unsafe product less out there.”
Els Bruggeman, Head of Policy and Enforcement at Euroconsumers
This practical collaboration shows one way that long-standing consumer testing expertise can be used by all the stakeholders in the online marketplace supply chain to better serve consumers and keep them safe.
Stronger rules still needed to enforce action
However, more is needed to secure every product on the market is a safe one. Euroconsumers’ safety tests clearly showcase that a stronger and more joined up product safety system absolutely needs changes to regulations and enforcement.
Many of the product safety rules and regulations covering e-commerce were drafted when direct retailer to consumer sales were the norm and are in the process of being updated in the EU through the Digital Services Act (DSA), the General Product Safety Regulation (GPSR) and the upcoming Product Liability Directive (PLD).
This has led to some wins but the patchwork of rules has still left significant gaps and uncertainty over who is liable for the harm caused by unsafe products sold on online marketplaces that could leave consumers exposed to unsafe practices. Carefully defining liability is really important as it incentivizes those who are legally liable to ensure that products are safe up and down the supply chain.
The Digital Services Act requires the very largest of the online marketplace platforms to do more to protect consumers including by monitoring third party trader activity on their platforms. However, it is still not clear when marketplaces can be held liable for harm to consumers. Instead, it specifies when they cannot be - which could complicate and slow down enforcement.
Similarly, the General Product Safety Regulation (GPSR) which will replace a 2001 Directive to better reflect online digital markets has some welcome new rights for consumers on recalls, product traceability and improved risk assessments. It also requires that dangerous products be taken off immediately after receiving a notice, with a deadline of two days to comply. However, the regulation puts stricter obligations on ‘economic operators’ in the supply chain, and online marketplace platforms have somehow avoided this designation.
Given their central role in the supply chain and outsize impact on both manufacturers, retailers and consumers, consumer groups all over Europe argue that they should be classified as ‘economic operators’ and face stricter obligations particularly on liability for harmful products.
It's no longer accurate to state as it was ten years ago, that marketplaces are merely intermediaries that store information or just connect services. They have become an integrated part of the supply and value chain, basically the money, generated by e-commerce. And that comes with a responsibility.
Product Liability Directive: a missing piece of the puzzle
Bearing in mind the existing limitations on online marketplaces’ liability in these two pieces of legislation, the most appropriate remaining place to make sure it is properly covered is in the proposed Product Liability Directive.
This piece of legislation is still in development but so far, the rules on online marketplaces liability for damages caused by defective products sold on these platforms are rather limited.
The current proposal introduces online platforms’ liability only as a very last resort, when all of the other possible liable persons are unavailable, and only if they present the product in a way that may lead consumers to believe that the product is provided by the online platform itself or by a trader acting under its authority or control. Together with BEUC we feel this will be too restrictive and insufficient to efficiently protect consumers. Now is the time to go the extra mile.
Reinforcing enforcement for product safety
But as ever, the proof of the pudding will be in the enforcement. However strong and well written the rules are on paper, they are worthless to consumers if they are not properly upheld.
The challenges of enforcement are huge and will require considerable investments, both at national and European level. But reinforcing the enforcement of the product safety legislation is the only way it can be fully effective.
Product safety system needs a proper liability regime
The Digital Services Act and General Product Safety Regulation mark a step change in consumer product safety by increasing checks on third parties, improving risk assessments and giving new rights for product recalls.
However, without a solid liability regime and strong enforcement to underpin the new rules, there’s a risk that unsafe products will slip through the net. The Product Liability Directive must be strengthened to make sure that the large marketplace platforms who are such a large part of the European online shopping boom play their part in helping consumers shop with confidence.