Nordic proposal for amendments to the DSA proposal
– in order to restore consumer safety and level playing field
on the internal market
Platforms and online marketplaces are new business models which have changed everyday
life and the market. The Nordic commerce sector welcomes the aim of the Digital Service Act
(DSA) to tackle both substantial problems with dangerous, unsafe and non-compliant
products from third country sellers and distortions of competition.
However, the proposal is in need of refinement in order to effectively address the problem of
unsafe goods entering the EU via online marketplaces. With the new DSA-initiative, we
finally have a chance to improve consumer safety while putting an end to distorted 3rd
country competition for the European commerce sector.
To solve the problem with unsafe and non-compliant products and to protect the principles
of the internal market, stronger measures need to be introduced, such as proactive
responsibility, while at the same time closing legislative loopholes.
Our main points:
There should be liability and an obligation to monitor for online
, when they intermediate the sale of goods between a seller in a third
country and a buyer in the EU, where there is no manufacturer or importer in EU.
This should apply regardless of how passive the online marketplace is. This is in line
with the applicable legislation on product safety in EU.
In these cases, the online marketplace should bear a similar responsibility
as an importer and the product liability as an importer/producer. In other words,
they have the responsibility to ensure that the goods sold via the marketplace are in
compliance with the EU legislation.
“Notice-and-take-down”-obligations will not protect consumers against illegal and
dangerous goods, as they take place after
the dangerous goods have been sold,
putting consumers at risk.
Online marketplaces who are actively involved in the supply chain should have
liability for consumer rights. It should be clearer when an online marketplace is
considered liable for guaranteeing consumers their rights according to EU consumer
What should legislators consider?
Introduce the concept of a digital importer,
with direct liability for goods imported
and sold to European consumers. This should mirror the obligations, responsibilities
and liability of a physical importer, cf. the NLF and the GPSD.
Recital 28 should be amended in order to permit a specific monitoring obligation for
online marketplaces facilitating the sale of goods from 3rd country sellers.
The principle of know your business customer
should be amended so that it also
mirrors the obligations of a distributor and an importer, cf. the NLF and the GPSD.
KYBC already forms a good starting point but should, in cases where the background
check has been insufficient, lead to direct liability for the online marketplace.
Amend the whole DSA proposal in the light of the need to have special requirements
on platforms that are handling sale of goods. Maybe there is a need for having a
specific chapter of the DSA for online marketplaces.
Clarify which legislation is covered by “consumer protection law” mentioned in
article 5 (3). The DSA should make clear, that online marketplaces who are actively
involved in the purchasing process are liable towards the consumer. The concept of
“active” and “passive” are well known and should be reflected and clarified in the
DSA in order to avoid different interpretations.
Online marketplaces have become popular among European consumers. Their business
model allows traders from 3rd countries to sell their products to European consumers,
without any economic operator taking responsibility and liability for the safety of the
products or compliance with EU product safety or consumer legislation. This situation is
undermining the internal market and consumer safety since it is a fundamental principle in
the Union Law that products on the European Market must be connected to a European
operator that is responsible and liable for the safety of products.
Several studies from consumer organizations, business organizations and authorities have
further documented, that consumers not only in theory but also in practice face severe risks
due to unlawful and dangerous products sold on online marketplaces.
When the DSA was presented the Commission stated, that goal was to ensure, that
consumers should have access to a wide range of safe
products online and that they should
be able to shop just as safely online as offline, stating that what is illegal offline should be
equally illegal online. However, the DSA does not ensure consumer safety in regard to the
sale of goods.
The DSA covers both illegal content
and illegal goods
, but its focus is on content and
content is also the most used word when the proposal is discussed.
The relevant tool used to tackle illegal content is removal after
it has been posted or
published in order to secure the freedom of speech etc.
However, the relevant tool to tackle illegal goods is to ensure compliance with Union Law before
the products are put for sale. That is the principle that all union law on product
safety and consumer rights is based on.
The solution presented in the DSA is to strengthen the safety by “notice-and-take-down” and
know your business customer obligations. However, this will not safeguard the consumers
against illegal and dangerous products or breaches of consumer protection laws and it
contributes to unfair competition situation since traditional importers and traders must
comply with existing legislation whereas this is not the case for the new digital online
The one-size-fits-all approach
in the DSA towards platforms disseminating illegal
content and online marketplaces enabling the sales of illegal goods must therefore be
Online marketplaces enabling the sales of goods should comply with the same rules as any
other economic operators selling or facilitating goods to the European market and
consumers. Otherwise, consumer safety will be at risk and the solid EU legal regime
regarding product safety, product liability and consumer protection will be undermined.
This memo describes the problems and presents proposals for textual amendments in the
DSA, which could solve the problems regarding the sale of goods on online marketplaces.
This memo also explains why the proposed safeguards in the DSA are not sufficient in regard
to the sale of goods from a third country seller via an online marketplace. It is divided in one
section regarding product safety/product liability and one regarding consumer protection
rules. Proposed changes to the DSA proposal are marked with red letters.
The Annex gives a more comprehensive and detailed explanation of how traditional
importers and retailers work with product safety, how the business model and regulation of
online marketplaces will in the future give them a possibility to avoid complying with
existing rules by changing the business model.
A. LEGISLATIVE GAP REGARDING PRODUCT SAFETY
There are currently gaps in EU-law on product safety and product liability, which
undermines the consumer safety and functioning of the internal market. The gaps are mainly
connected to the situation where an online marketplace facilitates the sale of goods between
a seller in a third country and a consumer in the EU. Many of these online marketplaces are
established in EU.
In this situation, there is no responsible and liable economic operator in terms of product
safety. Billions of products enter the EU through online marketplaces today, where several
studies have proven that the products are non-compliant and dangerous1. The DSA does not
close these gaps – in some ways it even increases them.
1. The DSA should define online marketplaces as digital importers
According to EU law on product safety, if the manufacturer is not resident in the EU, there
must be an importer who, when importing the products from a third country, resumes
responsibility for the safety and compliance of the product, and who must comply with the
obligations of importers set out in the Union law. Any subsequent links in the distribution
chain (distributors) have less strict obligations, as they "merely" resell products that have
already been subject to an assessment of conformity by the manufacturer and/or importer
when entering the Union.
While online marketplaces may not act as “importers” psychically, there is, however, no
doubt that the activity performed by the online marketplaces, and the role they play as an
entrance to EU and the European consumers, de facto
corresponds to the role and actions a
traditional importer plays and performs when products from third countries are brought to
Europe, placed on the European market and made available to European consumers.
Where the traditional importers act on a physical basis; the online marketplaces import the
products on a digital basis, presenting the products for sale on the online marketplace and
1 E.g. studies by Toy Industries of Europe, The European Consumer Organisation: BEUC
, The Danish
Chamber of Commerce, and Elsäkerhetsværket
connecting the seller in a third country with the consumer in the Union just as a physical
importer has done for decades. The consumer would never have seen or bought the product
from the seller in the third country if it was not for the online marketplace. The online
marketplaces are in fact “digital importers”.
The DSA defines online marketplaces as intermediaries, who cannot be held liable for the
activities of the 3rd party sellers on their platforms.
If this gap is not closed by the DSA by acknowledging online marketplaces as digital
importers, it will continue to create the unreasonable distortion of competition vis-à-vis the
importers covered by the technical definitions in EU product safety law who consequently
have the responsibility and obligations to ensure compliance before
placing the products on
the market – and thereby ensuring, that EU consumers are not exposed to illegal and
The gap should be closed by amending the structure of the DSA and adding a new article
stating that online marketplaces that are established in EU and which allow consumers (or
others) to conclude distance contracts concerning tangible goods with traders from third
countries, should be obligated to either 1) make sure that there is an importer of the products
in EU before the products are put up for sale or 2) take the responsibility and liability as an
This will make sure that either the online marketplace (as a digital importer) or another
economic operator in the EU (a traditional importer) is responsible for the safety and
compliance of the facilitated products and must therefore comply with the duties of an
importer, cf. the relevant union law on e.g. product safety, product liability, environmental
protection law etc.
In this context it is very important to be aware that article 22(1)(d) of the DSA proposal does
not solve the described problem. This is caused by the fact that article 4 of the Regulation
(EU) 2019/2020 (market surveillance regulation) does not give any obligations on the
authorized representative that can be compared to the responsibilities and liabilities of an
importer. The result is, as also derived from the description in the guidelines to article 4 of
the market surveillance regulation2, that no one in EU is responsible for the safety of the
product or towards the consumer, if there is no importer or manufacturer in EU (and only an
There is an exemption in article 5 (3) which states that platforms which allows consumers to
conclude distance contract with traders can be held liable for consumer protection law, if it is
not obvious for consumers that their contracting part is a 3rd party seller and not the
platform. However, this does not seem to include responsibility for product safety
– and it is further very unclear, whether it covers product liability.
Further, whether or not it is obvious to the consumer that he or she concludes a distance
contact with the online marketplace or a seller in a third country, is irrelevant to the fact that
billions of dangerous products from third countries will enter EU without any European
economic operator being responsible and liable for the safety of the product. Therefore
article 5(3) can meaningfully only cover distance contracts concerning goods that are already
legally imported to Europe by an economic operator, and therefore also only contracts
entered between a European Consumer and a European economic operator/the online
(see page 11-12)
Further, a new recital corresponding to article 5 (3) should explicit stress, that product
liability is included in the definition of “consumer protection law”:
2. The DSA must not prevent regulating online marketplaces in the future in
the sector specific legislation
Article 1 paragraph 5 states that the DSA is without prejudice to the rules laid down by a
number of sectorial directives and regulations. It should be made clear that the DSA does
neither hinder any future sectorial legislation of online marketplaces or platforms.
E.g. the online marketplaces refuse to be part of the supply chain of goods. This does not
reflect the actual activity of these online marketplaces, however there is a need that e.g. DG
Grow, DG Just and DG Envi in the future take a position on which obligations the online
marketplaces should have, as they play an essential role in the supply of goods and packaging
to European consumers.
3. Why the proposed safeguards in the DSA will not ensure consumer safety
It is at obvious that the DSA attempts to give the online marketplaces some duties like “know
your business costumer”, “notice and take down”, and appointment of a “legal
representative". However, this does not ensure consumer safety, since none of these
obligations correspond to the obligations of the EU product safety and liability legislation,
particularly the well-established principle that the products must be safe before
and are placed on the European market and that all products sold on the European market
must be connected to a liable operator that the consumer can turn to in case of defects and
damages caused by the product.
In the following the proposed safeguards in the DSA is described in relation to the sale of
goods on online marketplaces.
3.1 More efficient “Notice-and-take-down”-obligations will not prevent the sale of dangerous
It is a sound and solid principle in the product safety legislation that products must be safe before
they are placed on the European market and as such also before it comes into hands
of the consumers. This is the best remedy to safeguard EU consumers from the risk of buying
dangerous and illegal products.
The DSA will improve the “notice-and-take-down” obligations of the online platforms and
marketplaces. We support making these procedures more uniform, transparent, and
efficient, and we agree that it will have an effect on illegal content
. However, it will not be
sufficient regarding illegal products
as this obligation of notice-and-take-down occurs after
the product has been put for sale and even after purchase.
There are already very well-established procedures and obligations for withdrawal of
dangerous goods in the product safety legislation, and the notice and take down in the DSA
must be aligned with these rules.
It is also important to note, that the obligations to withdraw products always comes in
to the compliance procedures that must be performed before
the product is put up
The large online marketplaces have – according to their own records – billions of products
for sale. Authorities only have the resources to examine very few of these products and
thereafter ask for withdrawal. By the time an authority contacts an online marketplace in
order to have them to remove a dangerous product from their website, it is too late. At that
time, it has been for sale for maybe a longer period and many consumers might already have
purchased them. This risk is of course the reason why the European product safety
regulation are based on the principle of a European operator being responsible for the
the product is put up for sale and that the fact is that only a tiny part of
the compliance-work is performed by the surveillance authorities; the rest is up to the
In 2019, only 2161 products were placed on RAPEX and in 2020, only 2275 were alerted on
the system3. This underlines why it is necessary to give online marketplaces the
responsibilities and liability as digital importers obliging them to ensure that products are
they are placed on the market in the EU and as such before they make it possible
for EU consumers to buy the products.
The resources allocated to market surveillance do also mirror the fact that it is provided as a
condition that all products on the European market have been subject to a compliance
assessment by a responsible and liable operator before the products are placed on the
It goes without saying that not making the European established online marketplaces
responsible and liable on equal basis with their competitors; the traditional European
established importers and retailers that perform compliance work on basis of the current
legislation, is distorting competition on the internal market.
3.2 “Know Your Business Customer”-obligations do not secure consumers and cannot
replace the obligations in the present product safety rules
As mentioned, it is another fundamental principle in the EU product safety law, that all
products sold on the European market must be connected to a responsible and liable
operator that the consumer can turn to in case of defects and damages caused by the
The “Know Your Business Customer” (KYBC) is presented as a solution to this problem in
the context of platforms and/or online marketplaces.
Of course, we find it only reasonable that platforms and online marketplaces should know
the identity of their sellers/business customers. However, obliging online marketplaces to
obtain contact details of their sellers does not help in ensuring that these sellers are familiar
with EU law on product safety or other relevant parts of the EU legislation, and that they
have performed the relevant compliance procedures before the product is put up for sale.
Neither does it safeguard the consumers rights according to EU law on product liability to
reimburse consumers, who have suffered harm due to a defective, unlawful and dangerous
product. Consumers are left with no other rights and possibilities than to try to sue the 3rd
country seller in the country the seller is established in. This will be costly and the chance of
succeeding questionable4. Further it does not seem to be the purpose of the EU regulation on
product safety and liability that a consumer can buy a product from his or her home in the
4 REU Alm.del - endeligt svar på spørgsmål 237 : Besvarelse 236.pdf (ft.dk)
EU on an online marketplaces that without doubt direct the marketing at the consumer etc.
– and still have to go to Asia to seek for damages.
Recital 50 outlines what is expected of the platforms and online marketplaces in regard to
the KYBC-principle, and it is stressed, that the platforms should only make “reasonable
efforts” to verify the reliability information from the 3rd party sellers, e.g. by using the VAT
Information Exchange System.
Firstly, it has no relevance in order to make sure the supplied products are compliant and
secondly, further it is by no means sufficient to verify the identity of e.g. an Asian seller.
The study carried out by the Danish Chamber of Commerce revealed, that a majority of the
third party sellers from China operated under several names, and that the VAT-database
referred to an office hotel in e.g. Manchester with 700 Asian sellers located on the address
with no contact details.
Recital 50 also reveals, that the KYBC principle should not be understood as a guarantee to
the consumer or other interested parties, that the information given is correct.
To ensure an efficient and adequate application of that obligation, without imposing any
disproportionate burdens, the online platforms covered should make reasonable efforts to
verify the reliability of the information provided by the traders concerned, in particular by
using freely available official online databases and online interfaces, such as national trade
registers and the VAT Information Exchange System45, or by requesting the traders
concerned to provide trustworthy supporting documents, such as copies of identity
documents, certified bank statements, company certificates and trade register certificates.
They may also use other sources, available for use at a distance, which offer a similar
degree of reliability for the purpose of complying with this obligation. However, the online
platforms covered should not be required to engage in excessive or costly online fact-
finding exercises or to carry out verifications on the spot. Nor should such online platforms,
which have made the reasonable efforts required by this Regulation, be understood as
guaranteeing the reliability of the information towards consumer or other interested
parties. Such online platforms should also design and organise their online interface in a
way that enables traders to comply with their obligations under Union law, in particular
the requirements set out in Articles 6 and 8 of Directive 2011/83/EU of the European
Parliament and of the Council46, Article 7 of Directive 2005/29/EC of the European
Parliament and of the Council47 and Article 3 of Directive 98/6/EC of the European
Parliament and of the Council48.
3.3 Self-certification from 3rd party sellers is no guarantee that products are compliant
Article 22 concerns an online marketplace or “online platform [which] allows consumers to
conclude distance contracts with traders”. Regarding consumer- and product safety it relies
(f) “a self-certification by the trader committing to only offer products or services that
comply with the applicable rules of Union law”.
Self-certification is not an efficient or even relevant way to ensure consumer or product
safety and is not used in any other part of the union law on consumer and product safety.
Today, many packages from 3rd party sellers on online marketplaces already have a label
“certifying” that the content in the package complies with all rules. This label is also placed
on all packages, also the ones, where the products do not comply with applicable law and are
If the goal of ensuring consumer safety and the effort to make sure that ”the same rules apply
online as offline” should be fulfilled, the DSA must ensure, that online marketplaces should
comply with the same rules as any other operator selling goods in the internal market.
3.4. The “legal representative” and the “responsible person” are not liable for the safety of the
products nor liable towards the consumers
We note for the sake of good order that the above-mentioned gap is not closed by the
forthcoming Market Surveillance Regulation (EU 2019/1020), since it is at the moment clear
from this regulation and the guidelines to article 4 of the regulation, that the new responsible
person is not responsible for the safety of the products or liable towards the consumers
unless the responsible person is an importer or a manufacturer6.
That is also the reason why article 22, 1, d does not give any further protection of the
consumers nor align the current unfair competition towards traditional importers and
We stress for the sake of good order that in cases where there is an importer or a
manufacturer in EU for the products for sale on an online marketplace, the online
marketplace would in our opinion only have obligations under article 5(3) of the DSA
proposal in relation to consumers.
Neither the “legal representative” which is introduced in article 11 in the DSA gives any
solution on the described problem.
It says in article 40 of the DSA, that “A provider of intermediary services which does not
have an establishment in the Union but which offers services in the Union shall, for the
purposes of Chapters III and IV, be deemed to be under the jurisdiction of the Member State
where its legal representative resides or is established”.
However, article 40 only relates to
online marketplaces established outside of EU and only relates to chapter 3 and 4 and does
not refer to responsibility for the safety of the products or liability towards consumers.
B. DSA AND CONSUMER PROTECTION LEGISLATION
Illegal and dangerous products sold by 3rd country sellers on online marketplaces represent
the biggest risk to consumer safety. But other breaches on EU-consumer protection rules are
also frequent on online marketplaces and thus undermine consumer rights. This e.g. goes for
misleading price marketing and the 14 days' right to withdraw as well as the right to be
helped within the legal guarantee period.
Directive 2019/771 on certain aspects concerning contracts for the sale of goods provides the
member states with the possibility of applying the directive to platforms that do not fulfil the
directive’s requirements as a seller. This is stipulated in recital 23:
5 See three memos about unsafe products on three online marketplaces from our study of 50 products. The labels are described on page 14 in
memo about Wish.com, page 18 in memo about Amazon and page 22 in memo about AliExpress. The memos can be retrieved from:
6 Guidelines to article 4 of the market surveillance regulation 1_EN_ACT_part1_V1.pdf
This Directive should apply to any contract whereby the seller transfers or undertakes to
transfer the ownership of goods to the consumer. Platform providers could be considered to
be sellers under this Directive if they act for purposes relating to their own business and as
the direct contractual partner of the consumer for the sale of goods. Member States should
remain free to extend the application of this Directive to platform providers that do not
fulfil the requirements for being considered a seller under this Directive.
We believe that directive 2019/771 should always apply to EU-based online platforms in
cases where the third-party seller is established outside the EU. This ensures that the
consumers always are able to address their claims towards a company established in an EU
member state, thereby making it easier for the consumers to have a case settled by either the
ADR-system or the courts. It would also ensure legal certainty if the rules where the same
throughout all the member states.
This can be achieved by adding a new article to the DSA stating that the online marketplace
shall be considered as the consumers’ contractual part in cases where the seller is established
in a country outside the EU.
4. The DSA should make it clear that online marketplaces who are actively
involved in the purchasing process are liable towards the consumer
The DSA will replace the e-commerce directive. The e-commerce directive art. 14 exempts
service providers from liability if they are in no way involved in the information transmitted7.
However, today the online marketplaces claim, that they are only intermediaries and
therefore cannot be held liable for breeches of consumer legislation nor non-compliant
This claim is contradicted by ECJ-court rulings which have settled that online marketplaces
(and other intermediaries) are not
automatically exempted from liability. If an intermediary
in the purchasing process, it will be held liable if the underlying
legislation gives basis for this. This will be a concrete assessment according to the underlying
In that light it is positive that article 5(3) in the DSA settles, that online marketplaces are not
automatically exempted from liability. Article 5(3) supposedly codifies the criteria
7 The criteria for liability exemption laid out in the e-commerce directive in recital 42 and 43:
(42) The exemptions from liability established in this Directive cover only cases where the activity of the information
society service provider is limited to the technical process of operating and giving access to a communication network over
which information made available by third parties is transmitted or temporarily stored, for the sole purpose of making the
transmission more efficient; this activity is of a mere technical, automatic and passive nature, which implies that the
information society service provider has neither knowledge of nor control over the information which is transmitted or
(43) A service provider can benefit from the exemptions for "mere conduit" and for "caching" when he is in no way
involved with the information transmitted; this requires among other things that he does not modify the information that
he transmits; this requirement does not cover manipulations of a technical nature which take place in the course of the
transmission as they do not alter the integrity of the information contained in the transmission.
established in the ECJ – even though it is done without the use of the principle of “active”
and “passive”, which is the general and well-known term used in EU consumer law.
Eliminating the use of “active” and “passive” in the assessment creates legal uncertainty.
It is important, that article 5(3) stays in place. However, it must be further clarified in a
recital when the article is applicable if it shall have practical effect. Otherwise there is a risk
that online marketplaces can continue to claim, that they are intermediaries and therefore
exempted from liability. The DSA should in a recital specifically describe examples of
activities which would normally define an active intermediary who is considered liable. This
could for instance be activities like marketing of the products towards the consumer,
customer service, shipping and handling of returns and complaints.
If this clarification is not made there is a severe risk that consumers will be exposed to
misleading advertisement and deprived of their consumer rights when shopping on online
marketplaces. It could be made in a new recital connected to article 5 (3):
5. Online marketplaces who are liable should have an obligation to monitor
The e-commerce directive’s article 15 states that member states may not impose a general
obligation to monitor the information they transmit or store8. A similar statement is found in
article 7 in the DSA; however, this has a wider impact as it indicates, that no intermediary
services should be obliged to monitor – regardless of their involvement in the service or
The consequence will be, that also active online platforms and online marketplaces who are
deemed liable will be exempted from an obligation to monitor their website in order to find
and remove illegal information and products. This is unacceptable as it leaves online
platforms and marketplaces with no incentive to find and remove illegal content or products
putting consumers at risk.
Article 7 therefore needs to be amended in order to ensure, that online platforms who are
actively involved in the service and transaction, meaning they are liable and fall under the
definition of article 5(3), have a general monitoring obligation.
Monitoring obligations for active online marketplaces
It is also necessary to amend the wording of recital 28 and article 7 in order to permit a
specific monitoring obligation for online marketplaces facilitating the sale of goods if the
online marketplace falls under the criteria’s set up in article 5 (3) and are considered liable.
As recital 28 is written now, nothing in the DSA can be interpreted as imposing an obligation
to monitor regardless of them being liable or not. This goes against ensuring the goal of
ensuring consumer safety.
8 Article 15 in the e-commerce directive:
No general obligation to monitor
1. Member States shall not impose a general obligation on providers, when providing the services covered by
Articles 12, 13 and 14, to monitor the information which they transmit or store, nor a general obligation actively
to seek facts or circumstances indicating illegal activity.
2. Member States may establish obligations for information society service providers promptly to inform the
competent public authorities of alleged illegal activities undertaken or information provided by recipients of their
service or obligations to communicate to the competent authorities, at their request, information enabling the
identification of recipients of their service with whom they have storage agreements.
6. New transparency obligations should also include consumers
In article 22 the DSA introduces new transparency obligations for online marketplaces or –
as the text reads: “online platforms which allows consumers to conclude distance contract
with traders”. In the future online marketplaces will be obliged to obtain contact details of
the trader and other information that can verify the identity of the trader. As mentioned
under point 3.2 the requirements to fulfill this obligation are not effective on their own.
However, it is unclear whether these transparency obligations also cover the obligation to
For a consumer it is important to know, who the contracting partner is. This is particularly
important if the contracting partner is a 3rd country seller, since that means, that consumers
must pursue their consumer rights in a country outside the EU, most likely with a different
legal system as well as language.
Today, when shopping at online marketplaces, consumers typically only see the name of the
marketplace on the order confirmation and invoice. If the online marketplace is based in an
EU member state consumer have little reason to know, that they are not covered by EU
consumer rights, if they are not explicitly informed about it.
Amendments to paragraph 6 and adding a new paragraph 8 to article 22 could make this
Head of Retail and Wholesale Division
Cheif Policy Adviser , EU Affairs
and Head of Consumer Policy
and Corporate Law
Tel: +45 33 74 62 16 / M: +45 41 24 32 46
Head of Policy / Commerce
+47 918 71 526
The sale of product and the proposal for a new
Digital Service Act (DSA) Background on sale of goods and product safety in the European Union
It is a crucial purpose of the union law on product safety, the functioning of the internal
market, and the principles of consumer protection that all roles and activities in the
supply chain of products are covered by a responsibility and liability that corresponds to
the role and activity the given operator performs in relation to placing products on the
European market and placing these products in the hands of the European consumers.
According to Union law on product safety, if the manufacturer is not resident in the EU,
there must be an importer who, when importing the products from a third
country, resumes responsibility for the safety and compliance of the product, and who must
comply with the obligations of importers set out in the Union law. Any subsequent links in
the distribution chain (distributors) have less stricter obligations, as they "merely" resell
products that have already been subject to an assessment of conformity by the manufacturer
and/or importer when entering the Union.
Due to digital development and new business models, there are currently gaps in the
efficiency of the mentioned union law on product safety and product
liability, which jeopardize the functioning of the internal
market and undermines the consumer safety as well as the purpose and principles of the
The gaps are mainly connected to the situation, where an online marketplace facilitates the
sale of goods between a seller in a third country and a consumer in EU. Many of these online
marketplaces are established in EU. Billions of products enter the EU through these sales
channels today. In the past, this trade was limited, as it only took place when a consumer
bought products on a vacation or was lucky enough to find a web-shop in a third country that
was willing to ship to a consumer in Europe.
On that basis, doubts have arisen among legislators, enforcement authorities and legal
experts on how to deal with these online marketplaces in the context of responsibility for
product safety and product liability. Some online marketplaces state that their business
model is merely to facilitate the sale of products between sellers from third countries and
European consumers, and that the online marketplaces therefore have no responsibility for
the compliance of the products. Rather, they argue that it is the consumers themselves that
import the products after having bought it from the seller in a third country. The DSA and product safety and liability
It was expected that the DSA would close this gap and the clear message from the
Commission at the presentation of the proposal was that one of the purposes of the DSA is to
make the trade online as safe as offline.
However, this is not the case according to the current proposal, which, on the
contrary, exempts these online marketplaces from responsibility and liability that is imposed
on their competitors, which are the traditional European physical and online operators, that
import the products physically according to current relevant and fair legislation on product
safety and liability law.
As such, a reading of the DSA proposal seems to support the rest on the argument, that
online marketplaces have no actual responsibility or liability in order to make sure that
unsafe products do not enter the EU or harm European consumers.
The consequence of not closing this gap will be that these billions of products are not
connected to any liability in case they are defect and causes damage on European
Consumers, since it is crucial to notice that the existing product liability legislation is linked
to the product safety legislation in such a way that it must be assumed that
products, which are not technically considered imported to EU, will fall outside the product
liability regulation. Consequently, no person (neither the consumer-buyer, neighbors nor
others), who may suffer damage as a result of defective products from third countries
purchased via online marketplaces, will be protected by the liability system found in
European product liability law, according to which traditional importers and their
subsequent sellers are liable for defective products towards persons in EU (See for reference
an answer from the Danish Ministry of Justice to a member of the Danish Parliament9).
It is at the same time obvious that the DSA attempts to give the online marketplaces some
duties like “know your costumer” and “notice and take down”. However, this does not solve
the problem, since none of these obligations correspond to the obligations of the product
safety and liability legislation and the principles that this sound and solid legislation is built
on; namely the principles that the products must be safe before
they enter the market and
that all products sold on the European market must be connected to a liable operator that
the consumer can turn to in case of defects and damages caused by the product. The online marketplaces are in fact digital importers
While online marketplaces may not act as “importers” psychically there is, however, no
doubt that the activity performed by the online marketplaces, and the role they play, de facto
corresponds to the role and actions that a traditional importer plays and performs
when products from third countries are brought to Europe, placed on the European market,
and made available to European consumers.
Where the traditional importers act on a physical basis, the online marketplaces import the
products on a digital basis and connect the seller in a third country with the consumer in the
Union - just as a physical importer has done for decades. The consumer would never have
bought the product from the seller if it was not for the online marketplace. The online
marketplaces are in fact “digital importers”.
The mentioned gap - that is not yet closed by the DSA - creates an unreasonable distortion of
competition vis-à-vis the importers covered by the technical definition, who
consequently has the responsibility and obligations to ensure compliance before
products on the market.
Furthermore, allowing billions of unsafe products to continue to enter the European market
without any European operator being responsible for ensuring the safety and compliance of
the product prior to the product being placed on the European Market, undermines
consumer safety and the principles and functioning of the internal market.
Additionally, it is worth mentioning that the same challenges as described above is
connected to environmental legislation, Extended Producer Responsibility etc.
Therefore, it is important that the online marketplace that acts as the “digital importer” is
also responsible for the compliance with all sorts of obligations that the physical importers
are. Otherwise, it will undermine the legislation of the union law that is based on principle of
the internal market, since it is impossible to require a consumer to comply with legislation
that is intended for businesses and professional operators.
We note that the above-mentioned gap is not closed by the forthcoming Market Surveillance
Regulation , since it is clear from this regulation and the guidelines to article 4 of the
regulation that the new responsible person is not responsible for the safety of the products or
liable towards the consumers.
If the changes proposed are not made, it will be far more advantageous to set up as a
platform or online marketplace rather than to act as a traditional importer with
affiliate retail in the future. That situation is not desirable; not for consumers, the internal
market, nor the European economy.
The DSA will encourage traditional operators to change their business model to an online
marketplace allowing their suppliers in China, Thailand, India, Brazil, Zimbabwe to sell
directly to European consumers. This will relieve them of the responsibility for safety and
legality according the sound and fair but still tight and resource-intensive regulation in the
The compliance function of the business model online marketplace is thus, in principle, the
consumer and market surveillance authorities. All the traditional physical and online
business models must have its own and prior compliance function. Finally, it is important to notice that the above-mentioned gap is only present in the
situation, where an online marketplace facilitate a sale between a seller in a third country
and a European buyer. Consequently, or proposal does not cover closed online
marketplaces where the seller is established in the union or online marketplaces that
facilitate recycling trade between consumers, C2C.
In the situation, where an online marketplace facilitate sales of goods already imported
into the EU and thus already placed on the European market, the online
marketplace should only be held responsible as a distributor (and perhaps have
no responsibility, if they only act as intermediaries), but not as an importer, as the
products are already imported to the European market by another European economic
operator taking on the responsibility and liability in the role of an importer.