Sustainable commerce

At a Glance

eBay welcomes the initiative of the European Commission to adopt a renewed Circular Economy Action Plan to increase recycling and reuse of products in the EU. In this context, the Commission has announced initiatives that aim to put sustainability at the center of production design and processes, but also to enhance consumer rights with regards to a product’s environmental qualities.

Issue in detail

As a pioneering marketplace that enables product resale and reuse, eBay believes that online trade can contribute to the circular economy. Today, millions of individuals use eBay and other online marketplaces to trade goods that are no longer needed, or to repair broken items. eBay estimates that since 2016, trade of pre-owned items on eBay has contributed to avoiding an equivalent of 625,000 cars in carbon emissions (Source: 2019 eBay Impact Report).

As we collectively take conscience of the climate challenge ahead, consumers move towards more sustainable online shopping options. According to eBay data, the number of search queries for "sustainable" and "environmentally friendly" offers has increased by almost 100 percent from 2018 to 2019. 

During the economic recovery from Covid-19, European SMEs will have a great interest and opportunity in responding to the ever-growing demand for second-hand, refurbished, repurposed, ecodesigned or repairable goods. The ability for them to count on a stable, protective and clear legal framework in this context will be crucial. 

Recommendations in detail:

1. Improve access to relevant product sustainability information by creating a flexible EU standard

As consumers increasingly expect to be comprehensively informed on a product’s environmental qualities, we believe that the creation of EU rules can support greater clarity of that information.

About 98% of the European businesses that use eBay export; they sell to an average of 21 markets every year. To support their competitiveness on the global market, these SMEs must be able to rely on a European harmonized yet flexible standard for providing consumers with information eco-design characteristics such as product durability, repairability and energy consumption. Currently, certain Member States have been developing national rules regarding sustainability labelling that have created additional barriers to the Single Market, as well as compliance risks for SMEs that are offering such products for sale, in a particularly challenging post-crisis period. A recent example can be found in the repairability score adopted by France to be applied from 1st January 2021. We support the Commission’s initiative to harmonize these rules at European level and believe that a moratorium should be applied on national rules in the meantime in order to avoid further fragmentation.

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2. Ensure adequate protection of SME sellers against manufacturing issues

When considering to revise the Eco-Design Directive, the Commission should take into account the new profiles of businesses that might be covered by the traditional definitions of “manufacturer”, “importer” or “producer”. In fact, in the new global e-commerce context, small and even micro-businesses might be covered by one or more of these definitions, to the extent that they propose for sale a product made outside of the EU visible online to EU consumers, for which they still depend on the information that the “true” manufacturer will, or not, provide to them.

In this context, we believe that new eco-design and product passport requirements should remain clearly aimed at the player in control of these elements and that other members of the retail chain should be protected against a manufacturer’s failure to comply with them.

In the event of a dispute, a seller should therefore benefit from a legal protection against a manufacturer (or supplier / distributor) having provided inaccurate or incomplete product information. As many online resellers are SMEs with little capacity to engage in legal conflicts with manufacturers, the Commission should support SMEs against harm from inaccurate or incomplete product information, for example by imposing participation of manufacturers in accessible dispute resolution channels such as specialized B2B mediators.

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3. Foster a healthy repair market

The quality of spare parts and of the repair itself must be ensured by an appropriate set of standards, that the manufacturers must contribute to. However, constraints to repair imposed for other reasons (such as competition) must be ended whenever possible.

Consumers should be free to choose their spare parts supplier and installer without losing after-sales protection and guarantees provided by the manufacturer. Indeed, restrictions applied by manufacturers to commercial guarantees with respect to independent repairs should be prohibited, to the extent that the repair service and the parts have separately proven their equivalent quality.

Furthermore, parts manufacturing and installation specifications should be made easily accessible by manufacturers to consumers seeking to repair their own goods.

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4. Safeguard the inclusiveness of e-commerce

The emergence and growth of e-commerce over the past two decades has provided consumers located in remote or otherwise traditionally underserved areas with access to a greater variety of products at more affordable prices.

Legal limitation of return policies or delivery options should therefore be avoided, as they could turn sustainable online shopping into a privilege for urban and upper-class populations. Examples such as penalizing the use of home delivery in favour of pick-up points are not guaranteed to work in rural areas. More evidence-based research is needed to compare the environmental footprint of online versus in-store shopping, taking into account all types of consumers, shopping areas and available means of transport.

Positive incentives to sustainable consumer behaviors should therefore be the focus of policymaking in the area.

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5. Make EU waste management rules work for 21st century e-commerce

The EU institutions adopted the revised Waste Framework Directive in 2018, under which general minimum requirements for Extended Producer Responsibility (EPR) schemes have been introduced to create a direct economic incentive for producers to design products that can be more easily recycled or reused. Under these obligations, manufacturers and retailers are required to register with national and local waste management schemes, pay recycling fees and provide product information to the relevant authorities. 

EPR schemes (also known as Producer Responsibility Organisations or PROs, when they are collective to more than one producer) have proven efficient in generating resources to finance waste prevention and management in the EU. However, the growth of online commerce has become a source of new challenges for compliance with EPR obligations. Some of the main causes of this problem include the lack of awareness, and the complexity of registration and compliance processes with national or local EPR schemes. 

In the transposition of the revised Waste Framework Directive, several EU Member States are currently introducing additional requirements. Some Member States have decided to transfer the responsibility for seller and producer compliance with EPR obligations to online marketplaces. We believe that these will increase the complexity and deepen the fragmentation of the current EPR framework, as well as result in additional trade barriers and compliance costs, which impede participation of SMEs in EU trade and the circular economy.

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EPR challenges for online marketplaces:

Recycling fees are connected and modulated according to product design and features. In certain cases, they must be visible to drive positive consumer choice.

Third-party marketplaces can only obtain required product details if sellers provide that information. The accuracy of such data cannot be independently checked.
Take-back requires physical infrastructure (trucks, handlers) in order to collect items.

Third-party marketplaces such as eBay do not provide logistics services and therefore do not possess the physical infrastructure required for take-back.
Take-back does not always occur simultaneously with the delivery of a new product.

Online marketplaces or sellers would need to organize new collection rounds, resulting in more road traffic and carbon emissions.

Recommendation:

In light of the above, eBay believes that the current EPR framework, as established by the revised Waste Framework Directive, requires a fundamental re-examination in order to take better account of the specificities and challenges brought by online commerce. Only then, and with a proper consultation of impacted stakeholders such as SMEs and online marketplaces, can the issue of free riding be solved, internal market fragmentation be avoided, and a better circular economy be achieved within the EU. The framework should ensure that EPR fees are collected in a simple and efficient way, without creating additional burdens for SMEs and third-party marketplaces enabling cross-border trade. In that sense, eBay would like to share some policy recommendations, based on three categories: simplification, education and cooperation.

Simplification

  • Create online producer registration one-stop shop for SMEs and a centralized database for marketplaces to verify registration. 
  • Compel producers to include fee estimation in product sheets along with product characteristics such as energy label, reparability score, etc. as well as unique identification number for each Member State when relevant.
  • Implement de minimis for smallest sellers, below which fees are either waived, tiered or flat, and reporting simplified.

Education

Deploy public-private awareness campaigns on EPR compliance with messaging tailored for SMEs in the context of online marketplaces.

Cooperation

  • Work with marketplaces on pilot programs to improve EPR compliance, including via enhanced notice and takedown regimes.
  • Refrain from imposing liability on sellers or marketplaces for errors done “in good faith” in EPR compliance.

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

 

 

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