Online shopping: how the Digital Services Act fails consumers and the environment

The proposal of Digital Services Act is in need of amendments as it fails to enforce liability to online marketplaces for selling products with insufficient consumer and environmental protection, writes Viktor Miruchna at Environmental Action Germany (Deutsche Umwelthilfe – DUH).

“It’s cheaper to order it online!” – so goes the advertising, but what is the actual cost of shopping online? The boom of online marketplaces in the wake of the corona crisis has unfortunately come at the expense of retailers, consumers, and the environment.  Due to a legal loophole from the Digital Services Act (DSA), virtual marketplaces such as Amazon, AliExpress or Wish are exempted from liability when selling massive amounts of products within the European Union that often fail to comply with the existing environmental and consumer protection regulations. In an open letter to the European Parliament, the environmental NGOs Environmental Action Germany (Deutsche Umwelthilfe – DUH), the European Environmental Bureau (EEB) and Zero Waste Europe (ZWE) urges MEPs to consider amendments to the DSA.

Harmful to consumers and environment

From electronic goods, children’s toys, cosmetics, to car parts, counterfeits or non-complying products imported on online marketplaces from outside of the EU are potentially of poor quality and unsafe for consumption by EU standards. The volume is no small amount. Among illegal electrical appliances alone, the OECD estimates that up to 920,000 tons are placed on the EU market every year by so-called ‘free riders’. Despite this, the proposed DSA still gives liability exemptions for online marketplaces selling these products, which makes it impossible to take legal actions against any of these infringement.

Beyond safety, these products also often fail to comply with legal requirements for return, compensation, registration, or environmentally sound disposal. This way, suppliers avoid paying for disposal fees, jeopardize the financing of existing disposal schemes, and increase costs for companies that regularly comply with EU obligations. All this becomes even more relevant when considering the increase of obligations for producers under upcoming initiatives on sustainable products the EU foresees at this stage.

French solutions

Exemptions of liability for online platforms and insufficient checking obligation for the platforms on a ‘best-effort’-approach are not closing the existing legal loophole. The French Anti-Waste-Law shows that the liability obligations on online marketplaces are manageable, effective and in the interest of consumers and the environment. That is indicated by the current implementation efforts of major online marketplaces in the EU. The French legislation prescribes that whenever a seller or producer does not fulfil its legal obligation, the marketplace must fulfil those instead.  To avoid singularised legislations on online marketplaces in the member states, as we can see already in e.g. France, Germany and Austria, the DSA needs to set such liability obligations in place to ensure a harmonized solution across the EU.

Time to close the legal loophole

To prevent the importation of unauthorised and potentially harmful products into the EU and to spur on the effective enforcement of European law for products offered on online marketplaces, DUH, EEB and ZWE call for the following measures:

If no other economic operator located in the EU is responsible for the compliance of the products and liable to consumers, online marketplaces must take full responsibility for the non-compliant products which they enable the sale. To this end, online marketplaces must be actors in the supply chain by legal definition – for example as an importer.

In addition, online marketplaces must show the full contact information of the EU actor, which is responsible for the compliance of the product and liable to consumers, and in the case of products subject to extended producer responsibility the manufacturer’s registration number for the products of which they enable the sale.

The detailed DSA Amendments can be found in our joint open letter. It is now on the European Parliament to act quickly and decisively on this matter.

Back in December 2021, the EEB issued a joint statement alongside business, consumer and civil society organisations, to warn about how compromises on the Digital Services Act would risk harming consumers and businesses, and especially offline SMEs.

Notably, the EEB and partners within the Zero Mercury campaign demand an online platform liability reform , and proper monitoring of high mercury creams available from internet platforms and in shops, and stronger enforcement to protect people and nature from toxic mercury.