The rapid growth of online marketplaces over the last two decades has increased the pressure on distributors of products to take greater responsibility for ensuring consumer safety. The recent commitment1 of four of the world's largest online retailers – being Amazon, eBay, Alibaba and Rakuten-France – to accelerate the removal of dangerous and illegal non-food products from their platforms is the latest example of such pressure bearing fruit.
The commitment – which was facilitated by the European Commission – takes the form of a 'Product Safety Pledge', under which the four retailers have agreed to follow 12 specific actions in relation to unsafe products, which go beyond what is currently required by legislation including under the General Product Safety Directive ("GPSD")2 and the E-Commerce Directive ("ECD")3. In particular, the four retailers have signed up to (among other things):
- Remove the listings or offering for sale of unsafe products in the EU within two working days of being alerted by the relevant Member State government authorities (and to follow up with the authorities on the actions taken);
- Respond appropriately to customers within five working days of being notified of a dangerous product (and provide a clear way for customers to notify their chosen distributor);
- Provide single points of contact for Member State authorities to allow for the facilitation of communications on product safety issues;
- Cooperate with authorities in identifying the supply chain of dangerous products by responding to data requests (should the relevant information not be publicly available);
- Provide training and information to sellers on compliance with EU product safety laws (including a link to the list of relevant safety legislation) and require sellers to comply as such;
- Take measures aimed at preventing the reappearance of dangerous product listings that have already been removed (including putting in place measures to act against repeat offenders); and
- Consult with respect to information on recalled or dangerous products as available on the EU RAPEX system4.
The first action listed above – being the removal of unsafe products for sale within two working days of notice by the authorities – is especially significant given that current laws do not specify the exact length of time distributors or retailers are required to remove dangerous products from sale5.
Every six months, the four signatories will report to the Commission on the actions they have taken to implement the commitments, as measured against key performance target indicators.
What does this mean in practice?
The Pledge is a positive development for consumers. Large and influential Internet retailers have made public vows regarding product safety which go above and beyond what is required by the law. These specific commitments: (i) are likely to enable corrective actions to be taken earlier when a dangerous product has been placed on the market (and may help speed up the product recall process, where appropriate); and (ii) will assist with the Commission's objective of cracking down on underhanded and dishonest traders of products that are unsafe, counterfeit or infringe copyright. These are clear benefits for consumer protection.
However, the Pledge is a voluntary commitment that is not legally binding. It does not therefore create legal obligations on the four online retailers, and liability (whether civil or criminal) cannot be imposed on these organisations if they fail to comply with their promises.
That said, in terms of looking ahead:
- We would expect the four companies to attempt to uphold their promises given that: (i) reports on progress will be provided to the Commission; (ii) they may face public relations and reputational damage if the commitments are not observed; and (iii) implementing the relevant actions will likely result in the allocation of increased compliance costs and resources for these organisations. In this respect, the Pledge represents an opportunity for these companies to demonstrate to their customers and supply chain members that they take consumer welfare very seriously.
- It will be interesting to see whether other online retailers follow the example of the four signatories.
- The commitments under the Pledge may be sign of potential future reform of product safety laws, including possibly imposing stricter obligations on Internet-based distributors and other professionals within the supply chain to prevent dangerous products from being sold and to take specific independent actions when dangerous products have been supplied. In practice, it is often the case that producers of products (i.e. manufacturers, own-branders or importers into the EU), as opposed to distributors, take the lead on field actions and recalls. The Commission has previously published proposals to reform the GPSD, although these were stalled in 2016. This is an area for those involved in the online supply and marketing of products to watch out for.
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1 Product Safety Pledge – Voluntary commitment of online marketplaces with respect to the safety of non-food consumer products sold online by third party sellers, 25 June 2018 (https://ec.europa.eu/info/sites/info/files/voluntary_commitment_document_4signatures3-web.pdf).
4 The EU Rapid Alert System for non-food products facilitates the quick circulation and exchange of information on dangerous or unsafe products between the national authorities of 31 countries and the European Commission.
5 For example, Article 14 of the ECD provides that an information society service provider will not be liable for hosting information relating to illegal activity if it acts to remove or disable access to the information 'expeditiously'.