At a Glance
To ensure the safety and well-being of European consumers, it is important for the retail chain, including online marketplaces, to track and remove listings for items that are banned, recalled, or could in any way be dangerous to a buyer. The EU is looking at updating rules to improve this fight for product safety and eBay is actively contributing to that debate.
- Product safety is everyone’s business: every component in the retail chain must be involved to achieve better results
- Flexible risk assessment must be rolled out to avoid unnecessary burden on trustworthy users
- Marketplaces should have responsibilities commensurate with their involvement in transactions
- Increase the administrative capacity of market surveillance authorities
Issue in detail
At eBay, we take product safety very seriously. To ensure the safety and well-being of our members, eBay does not allow items that are banned, recalled, or could in any way be dangerous to a buyer, to be listed. We have therefore established strict product safety policies, under which the following items are not allowed:
- Items that pose a health or safety hazard as specified by any government agency
- Products recalled by a manufacturer or another government agency if the sale of the product is prohibited by law or regulation. Current information can be found on the Safety Gate rapid alert system website and the OECD Global Recalls portal;
- Products without a CE mark where it is legally required;
- Products that do not comply with product safety laws. This includes but is not limited to the Machinery Directive (2006/42/EC), the Electrical Equipment (safety) Regulations 2016, the Plugs and Sockets etc. (Safety) Regulations 1994 and the Cosmetic Directive 1223/2009, etc.
Activity that does not follow eBay policy can result in a range of actions including for example: administratively ending or cancelling listings, hiding or demoting all listings from search results, lowering seller rating, buying or selling restrictions, and account suspension.
In 2018, eBay committed to additional voluntary measures aimed at ensuring the safety of products sold through eBay by signing the EU Product Safety Pledge. The initiative sets out specific voluntary actions that go beyond what is already established by EU legislation and by the platforms themselves. The objective of the Pledge is to improve the detection of unsafe products marketed in the EU before they are sold to consumers or as soon thereafter as possible, and to improve consumer protection. In line with the Pledge, eBay has an established notice-and-take-down procedure in place which can lead to removal of the listing, as well as efforts to educate and inform sellers on infringements.
To monitor and moderate listings that are found to be breaching product safety rules we use the following methods:
- A rules-based filtering system combined with manual review where necessary
- Active monitoring of databases for products that are being recalled (i.e. Safety Gate or Member States' databases)
- Reaction from user, government agencies, and third-party expert reports (including via our “Report this item” link present on every listing). We react to government notices within two working days and always follow up with information about actions taken.
Constant exploration of new tools, such as image recognition technologies (although being at a too nascent stage to ascertain its efficiency).
- Product Safety Guidance: aiming to further educate our sellers who list on US, EU and Australian sites, we have drafted “flash card” documents in cooperation with authorities with proper and relevant sources of information for our sellers to ensure their products meet legislative and safety requirements. The Product Safety Guidance focuses on products identified by authorities as bearing a particular risk.
Recommendations in detail:
1. Product safety is everyone’s business: every component in the retail chain must be involved to achieve better results
The Product Safety Pledge is a successful initiative that ever more marketplaces are joining since its creation in 2018. It could be enhanced by broadening its membership to stakeholders that are essential components of the product safety chain, such as manufacturers, national regulators, sectoral and consumer organizations. This “Product Safety Pledge 2.0” would enable their active involvement and dialogue with online marketplaces to subsequently improve the reporting and removal of dangerous goods in a timely and efficient way. With consumer and sectoral associations, marketplaces could explore how to identify trends and seasonal peaks that can lead to surges in products seen as particularly vulnerable. With national regulators, the path towards a harmonized notification system could be opened more easily.
Such a multi-sided method has shown its efficiency in the context of the Commission’s own Memorandum of Understanding on the sale of counterfeit goods via the Internet, in existence since 2011. The Commission’s own evaluation report on the MoU, released last August 2020, acknowledges its status as “a valuable instrument to exchange information and ensure effective cooperation between signatories” and “a laboratory to identify practices in key areas such as proactive and preventive measures, notice-and-takedown procedures and tackling repeat infringers”. It concludes by “[encouraging] the participation of other interested parties” in order to further lift the “limits” of the MoU process.
2. Flexible risk assessment must be rolled out to avoid unnecessary burden on trustworthy users
The level of risk associated with each user and each transaction must be factored in when imposing “duty of care” obligations on online marketplaces. This will allow marketplaces to focus resources and be more efficient in controlling areas which present a higher danger for EU citizens. At the same time, marketplaces could keep the user experience simpler for lower risk areas, avoiding a disproportionate collection of data pushing away users towards less constrained, but also less secure sales channels.
This logic already exists in EU law for the purpose of fighting against money laundering and terrorist financing. For example, the Anti-Money Laundering Directive (2015/849, last revised in 2018) refers to “risk factors including those relating to (…) customers, countries or geographic areas, products, services, transactions or delivery channels”. In parallel, the Directive dictates that simplified due diligence measures must apply where certain “risk-mitigating conditions are met”.
Translated to online commerce, this risk-based approach could empower marketplaces to implement measures tailored to specific high-risk product categories or user profiles, such as based on sales volumes or other patterns that they are best placed to identify.
3. Marketplaces should have responsibilities commensurate with their involvement in transactions
A pure third-party marketplace like eBay does not hold, ship or deliver any of its sellers' goods. At no point in time is it in physical possession of the products traded via its platform. This significantly reduces the capacity to detect unsafe products. As such, we propose that a pure online marketplace which satisfies all the following criteria may never be held directly liable for the sale of an unsafe product via its service (without prejudice to the E-commerce Directive):
- The intermediary is an online or mobile application providing user services and facilitating sales solely from third-party sellers to third-party buyers.
- The intermediary does not own any of the inventory for sale on the online marketplace.
- The intermediary does not ship or control the distribution, packaging, or transport of any products on the online marketplace.
- The intermediary facilitates and permits direct, unhindered communication between the third-party buyer and the third-party seller.
- The intermediary conspicuously displays the third-party seller’s identification (possibly, as verified by know-your-customer requirements listed below).
- The intermediary does not determine the price for the product offered on the online marketplace.
4. Increase the administrative capacity of market surveillance authorities
Based on our experience, we find that national regulatory structures are not sufficiently equipped to deal with the new challenges of the platform economy. For example, we believe market surveillance authorities have been historically underfunded, limiting their capacity to monitor and test the safety of products. In addition, their efficiency has further been limited by national boundaries in a world where the Internet has made trade increasingly borderless. Coordination between authorities has significant opportunity for further improvement and efforts are required to better enable intermediary service providers to identify the safety of products.