Online Marketplaces under the DSA
The European Commission proposal for a Digital Services Act
(“DSA”)1 upholds the cornerstone
conditional intermediary liability framework, and introduces due diligence obligations for
online intermediaries, including Know-Your-Business-Customer (“KYBC”) obligations for online
We appreciate the oppo unity to contribute constructively to discussions surrounding
the DSA. It is in that spirit that we are sharing this non-paper. Whereas we suppo the
European Commission’s approach and the need to ensure a high level of consumer
protection, we are concerned by a empts by some stakeholders to re-purpose the DSA,
spoil its horizontal nature, and preempt parallel legislative deliberations on these issues
via the General Product Safety Regulation
2 (“GPSR”). As we explain below, these
stakeholders propose introducing a number of far-reaching requirements for online
marketplaces, which completely disregard their intermediary nature and undermine
SMEs’ viability and innovation at large.
In pa icular, we recommend:
● De ning online marketplaces
explicitly in the text. We urge policymakers to fol ow the
lead of the European Parliament Commi ee on Industry, Research and Energy (“ITRE”)
and clarify that an online marketplace is “an online pla orm that al ows consumers to
conclude distance contracts with traders on the pla orm”.
● Retaining the intermediary liability rules
for online marketplaces, as in the European
Commission’s proposal. We urge policymakers to reject introducing amendments that,
directly or indirectly, result in a loss of the hosting safe harbor for online marketplaces.
Such proposals penalise innovation with liability, and risk harming consumers and
● Ensuring due diligence obligations
have regard for online marketplaces’ intermediary
nature, are propo ionate, and are not contrary to the prohibition on general
1 European Commission Proposal for a Regulation of the European Parliament and of the Council on a
Single Market For Digital Services and amending Directive 2000/31/EC.
2 European Commission Proposal for a Regulation on general product safety, amending Regulation (EU)
No 1025/2012, and repealing Directive 87/357/EEC and Directive 2001/95/EC.
monitoring. We urge policymakers to reject proposals around staydown obligations
and expansion of the KYBC obligations from traders to traders’ products
We also suggest redirecting product safety discussions to the recently proposed GPSR. The
GPSR aims at regulating product safety on online marketplaces and is the be er legislative
initiative to tackle due diligence requirements. This wil help ensure that the DSA maintains its
The DSA proposal does not provide a de nition for online marketplaces. It is implicit that online
marketplaces are “online pla orms that al ow consumers to conclude distance contracts with
For the sake of legal ce ainty, it is impo ant that a de nition of online marketplace is
included in A icle 2 of the DSA. It is equally impo ant that that de nition is aligned with
how online marketplaces are de ned in other EU legislative instruments
. In pa icular:
The recently adopted Omnibus Directive
4 amends the Consumer Rights Directive
require that contracts concluded on online marketplaces ful l speci c information
The NIS Directive7
provides that “[a]n online marketplace al ows consumers and traders
to conclude online sales or service contracts with traders, and is the nal destination
for the conclusion of those contracts. It should not cover online services that serve only
as an intermediary to third-pa y services through which a contract can ultimately be
3 See A icles 5 and 22 of the DSA.
4 Directive (EU) 2019/2161 of the European Parliament and of the Council of 27 November 2019 amending
Council Directive 93/13/EEC and Directives 98/6/EC, 2005/29/EC and 2011/83/EU of the European
Parliament and of the Council as regards the be er enforcement and modernisation of Union consumer
protection rules (“Omnibus Directive”).
5 Directive 2011/83/EU of the European Parliament and of the Council of 25 October 2011 on consumer
rights, amending Council Directive 93/13/EEC and Directive 1999/44/EC of the European Parliament and
of the Council and repealing Council Directive 85/577/EEC and Directive 97/7/EC of the European
Parliament and of the Council (“Consumer Rights Directive”).
6 A icle 4(5) of the Omnibus Directive.
7 Directive (EU) 2016/1148 of the European Parliament and of the Council of 6 July 2016 concerning
measures for a high common level of security of network and information systems across the Union
8 Recital 15 of the NIS Directive.
The Regulation on Consumer ODR
9 de nes online marketplace as “a service provider
[…] which al ows consumers and traders to conclude online sales and service contracts
on the online marketplace’s website”.10
We are concerned by the fact that the European Parliament ITRE commi ee is the only one so
far to have introduced in their repo an amendment to align the text of the DSA with these
legislative instruments. Lack of alignment does not just undermine legal ce ainty. It also risks
causing regulatory fragmentation across the EU. National authorities could consider that online
pla orms that redirect consumers to third-pa y trader websites to conclude contracts there,
must also be considered to be online marketplaces under the DSA. Inconsistent interpretations
of what is an online marketplace would result in administrative burden and higher costs for
online pla orms, which is not in line with the harmonisation objective of the DSA.
We therefore recommend that the co-legislators follow ITRE’s lead and clarify that an
online marketplace is “an online pla orm that allows consumers to conclude distance
contracts with traders on the pla orm”.
We welcome the recognition in the DSA proposal that the conditional liability safe
harbors are a foundation of the digital economy and should remain in place.
European Commission proposal:
As hosting services, online marketplaces should not be liable for speci c content they
carry where: (i) they do not have knowledge of that content being il egal; and (i ) upon
obtaining such knowledge, act expeditiously to remove or disable access to it.11
No safe harbor for consumer law infringements should exist, where online
marketplaces present content or enable transactions in a way that leads consumers to
believe that the content is provided by the online marketplace itself or a trader acting
under its control.12 We consider that this approach is in line with the requirements in the
recently adopted Omnibus Directive
for online marketplaces to inform consumers: (i)
whether third pa ies o ering content through the online marketplaces are traders or
non-traders; and (i ) how obligations related to the contract are shared between those
third pa ies and the online marketplaces.13
9 Regulation (EU) No 524/2013 of the European Parliament and of the Council of 21 May 2013 on online
dispute resolution for consumer disputes and amending Regulation (EC) No 2006/2004 and Directive
2009/22/EC (“Regulation on consumer ODR”).
10 A icle 4(1)(f) of the Regulation on Consumer ODR.
11 A icle 5(1) of the DSA.
12 A icle 5(3) of the DSA.
13 A icles 3(4)(a) and 4(5)(1) of the Omnibus Directive.
We are however concerned by proposals made in the European Parliament that
e ectively make it impossible for modern online marketplaces to rely on the hosting
Some stakeholders propose that no safe harbor should apply to an online marketplace
that plays an “active” role by providing assistance in optimising, classifying, organising,
referencing or promoting the content at issue, or that has “control” over the content,
including by the use of automated means such as algorithms.
We would note that such proposals are at odds with the way modern intermediary
services, including online marketplaces, operate. They penalise innovation with
liability, and risk harming consumers by incentivising online marketplaces to
remove helpful functionalities (e.g. that allow a user to search within product
categories, or that recommend results on the basis of a user’s location).
kinds of proposals also ignore the most recent case-law
by the Cou of Justice of the
EU, which provides that the fact that an online pla orm automatical y indexes content
uploaded, has a search function, or recommends content on the basis of users’ pro les
or preferences, should not cause it to lose the hosting safe harbor.14
Other stakeholders propose that an online marketplace should not be able to bene t
from the hosting safe harbor where the contract between the trader and the consumer
is concluded through facilities provided by the online marketplace, or the online
marketplace withholds the identity of the trader a er the transaction, or the online
marketplace uses payment systems that enable it to withhold payments by the
consumer to the trader. They argue that such functionalities evidence that the trader is
under the online marketplace’s “control”.
We would note that such proposals are counter-productive. The possibilities for
integrated payments, or the conclusion of contracts through facilities provided
by online marketplaces, are highly advantageous for both third pa y traders and
consumers. Third pa y traders get access to global markets with lower barriers
to entry. Consumers bene t from more product choice, be er security and
additional helpful features.
There is no reason why these possibilities would result in
traders being under the “control” of online marketplaces. The EU should opt for policy
choices that al ow online marketplaces to innovate and compete on such helpful
features, instead of promoting policies that punish online marketplaces by removing
the hosting safe harbor because they o er such features.
There are also stakeholder proposals that an online marketplace should lose the safe
harbor where it al ows consumers to conclude contracts with non-EU traders, and there
14 Joined Cases C‑682/18 and C‑683/18, YouTube and Cyando, judgment of 22 June 2021, paragraph 114.
is no economic operator in the EU liable for product safety, or the appointed economic
operator does not respond to consumer claims.
We would note that such an outcome would not only be blatantly dispropo ionate, but
also cause legal unce ainty. First, under the Market Surveil ance Regulation,
obligation to appoint an economic operator in the EU does not apply to al products.
Second, it is simply impossible for an online marketplace to predict, when it
onboards a trader, whether its appointed economic operator may or may not
respond to future consumer claims. Such a requirement would in fact incentivise
online marketplaces to block non-EU traders from using their pla orms to reach
EU consumers, and very likely amount to a breach of the EU’s obligations under
international trade rules.
Similarly, some stakeholders propose that an online marketplace should lose the safe
harbor where it al ows consumers to conclude contracts with non-EU traders, and the
products do not comply with EU or national product safety rules.
We would note that this requirement is, again, dispropo ionate. It equates online
marketplaces to compliance surveil ance authorities, whereas in reality products can
change at any time without the online marketplace’s knowledge
. In that sense, this
requirement would also constitute a general monitoring obligation for online
marketplaces, which is explicitly prohibited by the DSA.16
Final y, there are stakeholders who propose that an online marketplace should not be
able to bene t from the hosting safe harbor where it does not comply with DSA due
We would note that this requirement evidences a serious misconception as to why the
hosting safe harbor exists in the rst place. The safe harbor is not a “bene t”
granted to hosting services, including online marketplaces. Rather, it is an
expression of the basic legal principle that one may not be found liable for an
illegal act it is not aware of.
More impo antly, it is a fundamental rights safeguard,
including the freedom to conduct a business and the freedom of expression.
In light of the above, we urge policymakers to reject introducing requirements to the DSA
that, directly or indirectly, result in a loss of the hosting safe harbor for online
15 Regulation (EU) 2019/1020 of the European Parliament and of the Council of 20 June 2019 on market
surveil ance and compliance of products and amending Directive 2004/42/EC and Regulations (EC) No
765/2008 and (EU) No 305/2011 (“Market Surveil ance Regulation”).
16 A icle 7 and Recital 28 of the DSA.
Due Diligence Obligations
We stand behind the DSA objective to address the sale of il egal goods and services on online
marketplaces. We do however caution against the introduction of due diligence
obligations that completely disregard online marketplaces’ intermediary nature
A number of stakeholders are cal ing for “staydown” obligations to apply to online
marketplaces. These include, for example, requirements that online marketplaces:
prevent the reappearance of il egal goods or services they previously removed from
their pla orms; or
check traders’ o ers against lists of goods or services previously identi ed as il egal,
prior to making them available on their pla orms.
We would note that, other than the general monitoring concerns
that these proposals raise,
complying with such “staydown” obligations would also raise practical problems:
In many cases, the illegal nature of a product cannot be assessed by the online
marketplace on the basis of previously removed products. The legal or illegal
nature of a good or service may depend on elements that the online marketplace
can simply not be aware of.
Think of products impo ed from another country without
the permission of the IP owner (“paral el impo s”);17 or the inclusion by a manufacturer
of al eged patent-infringing technology in a product; or the inclusion by a developer of
IP-protected content in an app without a license. These examples show that even
identical listings on an online marketplace could require an independent assessment
that could not be carried out via automated tools and technology, hence amounting to
a dispropo ionate burden under the case-law
of the Cou of Justice of the EU.18
Moreover, even if an online marketplace is in a position to conduct an independent
assessment of a product without the use of automated tools, it may stil not be capable
of assessing whether the product is il egal. Many online marketplaces do not have
17 Under EU law, distributors may freely impo IP-protected goods from one Member State to another,
where the goods have been put on the EU internal market by the rightsholder or with its consent. The
determination of whether a good has been “put on the market” is not always straigh orward. For
example, where a trademark owner provides products to distributors free of charge, the products are
not deemed to have been put on the market. Consequently, the trademark owner can successful y
prevent fu her distribution of these products in the EU.
18 Case C-18/18, Eva Glawischnig-Piesczek v Facebook Ireland Limited, judgment of 3 October 2019,
actual control of the goods made available through their pla orms and cannot
therefore carry physical inspections.
Requiring them to do so would e ectively
require them to change their business model. This would create barriers to entry for
new marketplaces, resulting in less competition and, eventual y, less user choice. Such a
requirement would also infringe online marketplaces’ freedom to conduct a business.
Obligations to Know Your Business Customer’s Products
Under the European Commission DSA proposal, online marketplaces are required to:
col ect ce ain information from traders
prior to al owing them to make use of their
upon receiving this information from traders, make reasonable e o s to assess
whether the information is reliable, by conducting own investigations or requesting
suppo ing documents.
Where the online marketplace obtains indications that the information is inaccurate or
incomplete, it must request the trader to correct it. Where the trader fails to do so, the online
marketplace must suspend the provision of its service to the trader until the request is
Some stakeholders are arguing that this KYBC principle should not be limited to traders, butalso extend to their products
. In pa icular, they require that online marketplaces:
col ect information to al ow the “unequivocal identi cation” of the good or service
con rm that the good or service o ered complies with EU law (including as regards CE
marking, warning and label requirements);
run independent checks of the product information provided, both prior to publishing
traders’ o ers and throughout their contractual relationship.
We are concerned that such requirements completely disregard the intermediary nature of
online marketplaces. Online marketplaces connect sellers and buyers to enable the
purchase of products. As noted above, they usually do not have actual control of the
goods made available through their pla orms and cannot therefore carry out physical
inspections. How are they to independently con rm the accuracy of any information a
Due to this intermediary nature, it would be dispropo ionate to subject online
marketplaces to the same due diligence obligations that apply to manufacturers,
impo ers or distributors.
Requirements along the lines of verifying that a product bears the
CE marking and is accompanied by the necessary documentation in a language the user
understands apply to distributors under the current regulatory framework,19 where the
distributor is the sel er vis-a-vis
the consumer. Requiring online marketplaces to also do so
would be akin to requiring the owner of a shopping mal to check compliance with EU law of
every product di erent shops on its premises sel .
Online marketplaces should be subject to due diligence obligations that re ect that they are
intermediaries, rather than sel ers. A di erent outcome would unnecessarily duplicate
regulatory requirements and blur the distinction between di erent actors across the supply
chain. This would cause legal unce ainty and increase compliance costs, which would most
likely be passed-on to consumers.
We would also note that subjecting online marketplaces to a dispropo ionate regulatory
framework may have knock-on e ects on the ability of SMEs to reach a broad consumer base,
but also on the ability of consumers to bene t from wider product choice and lower prices.Smaller third-pa y traders may be overwhelmed by the amount of information they
need to provide to have their products marketed through online marketplaces. Online
marketplaces may be incentivised to allow on their pla orms large, established
third-pa y traders since the risk of non-compliance is likely to be lower with those.
A be er way forward
The European Commission published its dra General Product Safety Regulation
30 June 2021. This legislative proposal aims to update the applicable General Product Safety
,20 including with regard to sales made through online marketplaces. We consider
that the GPSR is the most appropriate instrument to address due diligence obligations
for online marketplaces, and that the DSA should maintain its horizontal nature.
If policymakers however wish to move forward with introducing speci c due diligence
obligations for online marketplaces in the DSA, we recommend a framework that both
achieves the aim of securing a high level of consumer protection and accounts for the
intermediary nature of online marketplaces:
There are di erent kinds of online marketplaces, some of which may not have direct
relationships with traders. For example, an online marketplace may have a direct
contractual relationship with another online marketplace, rather than with the traders
making o ers available on that marketplace. A KYBC obligation should therefore
allow online marketplaces exibility to collect the required information directly
from the trader, or from pa ners that the trader works with and already collect
(e.g. other online marketplaces, payment processors).
19 See, for example, A icle 13 of Directive 2014/53/EU on the harmonisation of the laws of the Member
States relating to the making available on the market of radio equipment (“Radio Equipment Directive
20 Directive 2001/95/EC on general product safety.
Under the current legislative framework, not al traders are required to appoint an
economic operator. The requirement to collect information from traders about
their economic operators under the KYBC obligation, should either be deleted, or
only applied to products subject to the Market Surveillance Regulation
Online marketplaces should not be required to proactively col ect information on
products third pa y traders sel on their pla orms. They should rather design their
user inte aces in a way that allows third pa y traders to directly include
product-speci c information in them
. Traders should also be required to
self-ce ify that their products comply with EU law.
Online marketplaces should be required to col ect the KYBC information and to ensure
that traders have inse ed al required information about their products prior to making
them available on their pla orms. Online marketplaces should not however be required
to run independent checks of this information. Checks by online marketplaces
should only be required ad hoc by market surveillance authorities, where the
la er have reasonable safety concerns about pa icular traders or products.
Online marketplaces should be required to remove from their pla orms products
identi ed as illegal by market surveillance authorities.
The collection of information from traders through application of the KYBC
provisions should not result in potential liability
for online marketplaces.
We appreciate the oppo unity to discuss those alternative proposals in more detail in order to
ensure that any regulatory framework for online marketplaces is propo ionate, e ective and
ensures a high level of consumer protection.
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