Sustainable commerce

At a Glance

Founded in 1995 around the sale of a broken item, eBay has long been home to a large variety of offers, from brand new to second-hand, refurbished goods as well as repair parts. According to an eBay study released last November 2021, 78% of European small business sellers using our marketplace had sold non-new items, with second-hand and refurbished items representing 52% of their sales.  As the EU proceeds to revise and create new rules in order to meet the objectives of the EU Green Deal and rise to the challenge of curbing climate change, eBay shares its views so that millions of consumers and businesses can continue giving a second life to goods and empower the circular economy.

Issue in detail

Recommendations in detail:

1. Adopt a balanced legal framework that recognizes the specificities of second-hand products

With its recent proposal for a new Regulation establishing a framework for setting ecodesign requirements for sustainable products (Ecodesign for Sustainable Products Regulation - ESPR), the EU aims to update an important set of rules aimed at improving the environmental performance of certain types of products in the European market.

In parallel, the proposal for a new Directive on empowering consumers for the green transition (the “ECGT” Directive) will look at harmonizing rules regarding how ecodesign and other environmental claims on products are shared with consumers, to enable them to take better informed purchasing decisions.

Together, these new legislations will form a powerful framework that can promote the commerce of goods of the lowest possible environmental impact and thus give an important boost to a greener European economy.

But in order to fully achieve this, the new rules should explicitly recognize the specificities of second-hand products and avoid red tape that could hamper their sale to European consumers. In fact, it is crucial to understand that supply chains are different for each type of goods. When dealing with brand new products, the most frequent supply chain is:

Manufacturer to Economic Operator such as importer or seller to Consumer

However, the second-hand chain has another pathway:

Manufacturer to Economic Operator to Consumer to Another Economic Operator to Consumer

Giving a second life to products often means a remanufacturing, refurbishment or repair process performed by operators distinct from the first manufacturer. Neither they nor the ultimate reseller of the product necessarily has all the original information related to the product. In some cases, information about these products will simply not be available, for example, because they are no longer manufactured or lack labelling, or because they were uniquely handmade.

As such, it is important that new European legislation does not systematically mandate information to be collected by sellers and shared with customs, marketplaces or even consumers, when dealing with second-hand products, as they would for new ones. Specific roles and obligations should also be designed for repairers and refurbishers rather than just assimilating them to a manufacturer from the moment they “modify” a product.

Lastly, while new products with excellent eco-performance should be distinguished as such in the eyes of the European consumer, the EU could also officially recognize the even higher environmental value of pre-owned items by explicitly allowing operators and online marketplaces to advertise such benefits based on the product’s condition.

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2. Encourage the development of parts trade and repair networks to truly achieve the right to repair

In early 2022, the EU started consulting citizens and companies on the concept of promoting a “right to repair”, hoping to feed into a legislative proposal to be presented in the next few months. The consultation focused on the potential causes of the decreased lifespan of consumer goods in the EU and sought feedback on measures to incentivize repair such as through the legal guarantee period.

At eBay, we believe that the “right to repair” should be envisioned from a more global perspective. In fact, repair is not only a right to be activated by the consumer to the sellers; it involves multiple other players in the value chain, including parts manufacturers and professional repairers, among others. These players may be located all around the world, begging also to consider the environmental impacts of transport in the analysis.

Overall, we recommend that the EU looks into:

  • Supporting the emergency and growth of repair networks: sellers and buyers alike rarely have the skills or resources required to conduct proper repair. Even if it is made into the preferred remedy to a broken product under the law, repair will have to be performed by a person whose services are accessible and affordable to whom is bearing the cost of repair (the seller if under guarantee, the buyer if not). Therefore, repair services should be incentivized, for instance by ensuring they only come with legal obligations proportionate to the role of the repairer (see previous section).

  • Ensuring the economic and environmental efficiency of repair in a globalized trade context: consumers increasingly purchase their products across borders. If the product breaks, they should not have to return it across the planet in the other direction, creating additional CO2 footprint in reverse logistics. Instead, an appropriate framework should be considered to ensure that repair can happen locally.

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3. Harmonize waste management rules and extended producer responsibility obligations throughout the EU for SMEs to comply more efficiently

In recent years, we have seen challenges related to the application of waste management rules throughout the EU. Although pursuing a crucial policy objective, the framework around “extended producer responsibility” (EPR) has shown a lack of adaptation to the nature of trade online and on our platform: decentralized, but also global. Therefore, we see the revision of European waste management rules as an opportunity for all players involved, including online marketplaces like eBay and small online business sellers, to do their part in reaching the EU’s ambitious goals for waste reduction and for protecting our environment.

In particular, we believe the EPR system should be simplified and harmonized to include:

  • A single point of registration (one-stop shop), or at the very least for mutual recognition of national registrations within an EU wide register, following what is already in place for Value Added Tax. Once this is established, sellers will more easily register at the one-stop shop closest to their place of establishment and declare in which EPR category(ies) and Member State(s) they are currently active. Smaller producers could also benefit from simplified reporting obligations, in accordance with the EU’s equal treatment principle enshrined in its Waste Framework Directive.
  • De minimis in volume of products sold, below which EPR fees would either be waived, tiered or turned into an annual flat amount. Currently, a Spanish company that sold even one unique coffee machine to a French buyer over any given year is liable for EPR obligations connected to that product in France. This includes affiliation to a PRO, payment of the fee, and take-back obligation if any. But these requirements are often unrealistic for smaller companies to comply with. With a threshold system, not only these occasional exporters could continue growing their business, but producer responsibility organizations would no longer have to shoulder costs to manage them higher than the fees they owe.

  • An obligation for producers to include an estimate of fees applicable in EU countries where their resellers distribute their products, as part of the main product sheet. The applicable EPR fee for each product varies in function – not of its final retail price, but rather of the product’s weight, composition, shape, or other such physical characteristics, which are all best known by the producer itself.

Watch this video from eBay’s trade association Ecommerce Europe to learn more about the EPR challenge for SMEs:

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