European Commission Publishes Notice on Market Surveillance of Products Sold Online

A Commission Notice on the market surveillance of products sold online has been published in the Official Journal of the European Union. The Notice is important for Hong Kong traders selling all kinds of consumer goods online, including toys, clothing, footwear, electronics and any other type of household or outdoor-activity goods purchased by customers in any of the EU Member States.

The Notice’s objective is to assist Member State authorities in the enforcement of EU legislation on the safety and compliance of non-food products. The Notice refers to tangible goods and is concerned mainly with the application of the EU’s safety legislation, such as the General Product Safety Directive. Hong Kong traders who supply products online may like to acquaint themselves with the Notice.

Ever since the development of e-commerce, difficulties tracing products offered for sale online, and identifying the responsible economic operators, regularly arise. Additionally, the increase in the number of economic operators located outside the EU offering products for sale online can be a particularly challenging factor. Moreover, sales directly to EU consumers render the enforcement of product rules troublesome. Conducting risk assessments or safety tests due to the lack of physical access to products, and difficulties in sampling products for testing, pose their own unique challenges. The Notice is therefore aimed at improving enforcement of EU rules for products sold online, and increasing overall trust in online markets.

In particular, the Notice clarifies that any product sold online in the EU is required to comply with relevant EU legislation. This naturally has to be the case even if the producer is based outside the EU. In the case of non-EU sellers, Member State authorities have a number of possibilities to enforce actions against them. Such economic operators have to be made aware that products offered for sale online to customers in EU Member States need to comply with all EU legal requirements.

Member States can block webpages offering dangerous or non-compliant products, if necessary. They can take specific measures to this end. Similarly, market surveillance authorities can take the necessary measures to withdraw, prohibit or restrict products from being made available on the market.

Member States are also encouraged to pursue cooperation with the competent authorities in third countries (e.g., Hong Kong or mainland China). Member States are encouraged to inform the Commission about such cooperation activities. This is important in particular for issues that may need a coordinated approach at EU level, in order to facilitate cooperation on investigations linked to the safety and compliance of products offered for sale online to consumers or other end–users within the EU. A specific product safety international cooperation framework already exists in the form of the RAPEX-China system established between the Services of the European Commission and the Chinese General Administration of Quality Supervision, Inspection and Quarantine (AQSIQ).

Member States may also make use of the “RAPEX” Rapid Alert System (the online exchange of information on dangerous products). This is a useful online tool open to the public which, moreover, can adversely impact on the reputation of an economic operator, as his details are provided. The market surveillance authorities are encouraged to indicate in the notifications of dangerous products transmitted through the Rapid Alert System if the product was sold online from a third country and through which web shop or online platform.

The Notice also emphasises that where products offered for sale online enter the EU from third countries, cooperation between market surveillance authorities and the Member States’ customs authorities should also be sought to control and stop shipments of products at the border. This is crucial when a shipment directly arrives from outside the EU to an EU customer and where no economic operator is present in the EU.

The Notice additionally clarifies the obligations of online marketplaces where authorities require them to remove dangerous products through a “notice and action procedure” outlined in the e-Commerce Directive. Market surveillance authorities must have powers and resources in order to exercise these “notice and action” procedures directly, or establish cooperation with other national authorities for implementing the e-Commerce Directive.

In order to ensure that intermediaries effectively react and take information about the offer for sale of unsafe or non-compliant products off their website, the Notice advises that Member State authorities establish close contacts allowing rapid responses, with key intermediaries providing hosting services for products sold online.

The Notice outlines the responsibility of all actors within the supply chain, including fulfilment by service providers who receive customers’ orders, as well as those that package and send the product being bought.

The Notice further comments on raising awareness amongst customers and businesses as to the safety and compliance of products sold online. Member State authorities can take certain actions to ensure that consumers are informed about certain essential aspects as regards the online sale of products. For example, consumers should be encouraged to check if the required information on the product is there, such as warnings and traceability information - the address and contact information of the manufacturer and also, where applicable, the importer.

The Notice comments that although it is the economic operator’s responsibility to comply with EU rules, raising business people’s awareness of the requirements they are obliged to meet assists in ensuring that safe and compliant products ultimately reach consumers. Raising such awareness begins with giving them easy access to basic information on applicable requirements and on how to comply with the requirements. Information can be provided on specific sectors or products. It notes that classic information campaigns and safety and compliance related seminars can be adapted to the online environment.

As consumer products available on the Member State markets are frequently coming from outside the EU, the Notice provides that it is important to reach out to businesses operating from abroad. In order to ensure that the information developed for EU businesses is accessible and promoted to those businesses located outside the EU, measures such as trade fairs can assist in informing economic operators in third countries.

The Notice is intended to contribute to a better understanding of EU product legislation, and to encourage a more coherent application of legislation concerning products that are sold online.