Navigating the EU's new GPSR: obligations are introduced for online marketplaces
Published on 18th Jul 2024
Who are online marketplace providers and what should they be aware of before the new regulation becomes applicable later this year?
A provider of an online marketplace under the General Product Safety Regulation (GPSR)(Regulation (EU) 2023/988) – which came into force on 12 June 2023 and is applicable from 13 December this year – is "a provider of an intermediary service using an online interface which allows consumers to conclude distance contracts with traders for the sale of products".
Most if not all prominent online platforms fall within this definition, meaning the GPSR will have extensive implications for the operators of these websites and services. Businesses that fit this category should be aware of the key obligations.
Online marketplace providers
Providers of online marketplaces are key players in the online market. The intention of the GPSR's substantial marketplace provisions is to address directly the challenges presented by the digitalisation of EU economies and to modernise the EU's product safety framework. With a focus on the growth of online sales through online marketplaces, the regulation seeks to enhance consumer protection in the digital age.
The EU considers that providers of online marketplaces play a crucial role in the supply chain of products sold via their platforms, because these services enable economic operators to reach a broad base of EU consumers. As a result, they have been purposefully brought into the scope of the product safety regime, with a defined role created by the GPSR that imposes compliance and cooperation requirements.
Depending on the particular business model of their platform, a provider of online marketplaces may also need to comply with additional requirements under the GPSR that apply to other types of economic operators.
Comprehensive product information
Online interfaces must be designed to enable traders to provide comprehensive product information.
The GPSR will introduce significant changes to the interfaces on online marketplace platforms. The regulation specifies that products sold online must include information similar to those sold offline, and providers of online marketplaces must design their interface in a way that facilitates traders providing the required information to consumers on product listings. This includes the registered trade name or trademark of the manufacturer, postal and electronic address for contact, product identification details, and any warning or safety information in a language easily understood by consumers.
If traders frequently fail to provide this information, or otherwise attempt to list non-compliant products, providers of online marketplaces are required to suspend their services to these individuals.
Platform access for regulators
Market surveillance authorities (MSAs) must have access to online platforms when required.
Providers of online marketplaces now have a regulatory obligation to cooperate with MSAs and allow regulatory authorities access to their online interfaces for safety monitoring and the identification of dangerous products. For product safety purposes, authorities will be permitted to scrape data from an online interface if obstacles are put in place by online sellers.
When notified of incidents, providers must share information with consumers and the rest of the supply chain, as well as comply with orders to remove content, disable access or warn consumers and the authorities about safety risks. These orders from MSAs must be complied with within two working days from receipt.
Additionally, the EU will make its Safety Gate alert system for dangerous non-food products interoperable, allowing online marketplaces to link to the portal. It remains to be seen how this interoperability will work in practice. However, it is anticipated that this will allow notifications of dangerous products to be automatically pulled through to online marketplaces. This will enable consumers, who have purchased those products via an online marketplace, to be contacted more easily.
Web portals are also incorporated into the EU's Safety Gate alert system through which consumers can complain about a product, and businesses can inform both authorities and consumers of dangerous products.
Process requirements changes
Online marketplace providers are required to provide a single point of contact to allow for direct communication by electronic means between regulators and the online marketplace in relation to product safety. This point of contact additionally serves as the person that consumers can contact if they have issues with a product. This is particularly important for providers of online marketplaces that may not have had a European contact pre-GPSR or whose establishments may not be situated in the EU.
Online marketplaces must also cooperate with other economic operators to support or facilitate actions to mitigate risks presented by non-compliant products; for example, by contacting affected consumers, publishing information about corrective actions and product recalls, and passing information about safety incidents or non-compliance up the supply chain of a product made available on their platform.
Osborne Clarke comment
In order to prepare for these new obligations, providers of online marketplaces should implement appropriate internal processes for product safety to ensure compliance without delay. The compliance timeframe is between two to three days depending on the nature of the notice, making effective procedures essential to avoid breaches and potential enforcement action.
In practice, the GPSR requires providers of online marketplaces to adopt a more proactive approach to ensure the safety of products sold on their platforms and fully integrates providers into existing product regulation structures.
Online marketplaces should familiarise themselves with the legislation and their new obligations. This will ensure that there will be sufficient time to introduce the necessary changes to their online interfaces, set up processes for monitoring product safety and alert traders to the new requirements for listing a product on the marketplace.
This is the second in our series of Insights on what businesses need to know to navigate the new EU General Product Safety Regulation, following our look at the obligations for manufacturers and importers of products. Please keep an eye out for the next in the series that will look at the changing rules for product recalls.
