Will product safety proposals close the legislative gap between high-street and online retailers?

Proposals formalised by the Government last Autumn promise to make product safety obligations more equitable between high-street and online retailers, while facilitating innovation and route to market. We examine how the Government intends to do this, and whether the push for reform will continue after the General Election.

Imagine buying a plushie toy for your child last Christmas, only to find out that it contains 152 times the UK legal limit of phthalate, a toxic chemical that can damage the liver, kidneys, lungs, and reproductive system.

From toxic toys to exploding batteries, stories of dangerous products making their way into the hands of UK consumers abound, particularly when those products were purchased via an online marketplace or third-party seller.

In total, 2,814 product safety and non-compliance notifications involving 3,164 products were made to the Office for Product Safety and Standards’ (OPSS) Product Safety Database between 1 April 2022 and 31 March 2023, of which 16% were reported as presenting serious risk. Furthermore, nearly half of the corrective actions taken involved removal of the listing by the online marketplace on which it was hosted.

“The evidence is overwhelming: online marketplaces are a hot bed for dangerous and non-compliant goods,” commented Lesley Rudd, chief executive of Electrical Safety First, a charity dedicated to reducing the number of injuries and deaths caused by electricity across the UK.

“These new figures from the Government show that online shopping is a minefield, with consumers unknowingly exposed to thousands of unsafe goods, many of which can be in their homes the very next day.”

Indeed, research by Electrical Safety First last year stated that a third of fake electrical items purchased had been bought online, while one in ten British consumers had had first-hand experience of an electrical fire or shock caused by an electrical product purchased online.

What is the Product Safety Review?

Published in August 2023, ‘Smarter Regulation: UK Product Safety Review’ was a consultation document developed by the Government in response to its call for evidence, in which the Government asked for views on current product safety legislation, and how it could be developed to support investment and growth.

Accompanied by a consultation period, which closed last October, the UK Product Safety Review outlined thirteen proposals to overhaul the UK’s 30-year-old product safety laws and “make them fit for emerging technologies and new shopping habits.”

In a press release accompanying publication of the Review, Business Secretary Kemi Badenoch said: “These changes will provide better consumer protections while upholding our world-leading safety standards and will also cut costs for businesses to ensure they have the freedom they need to innovate and thrive, helping to create jobs and grow the economy.”

You can read the full Review here.

What are the proposals for online marketplaces?

A key priority of the consultation is to level the playing field between online and high-street marketplaces. Currently, online marketplaces are not legally required to have the same level of oversight on the safety of the products they sell as their high-street counterparts, largely because they are seen as ‘facilitators’ of a product’s sale, rather than the seller itself.

This is concerning when you consider that just over 30% of all UK retail sales occurred online in November 2023, compared to 10.7% for the same month in 2012.

Defining an online marketplace

To change this, the Government is first proposing to update product safety legislation so that it clearly defines, and sets out the responsibilities for, key actors and activities in the ecommerce supply chain.

In particular, the Government suggests setting out a legal definition for an ‘online marketplace’ and the activities that would trigger it, giving as examples: “Providing an online platform which connects traders with buyers and enables sellers to list products for sale.”

From this would stem legal duties such as establishing a “compliance function”, in which online marketplaces are obliged to create policies, processes, and systems to demonstrate that their approaches to product safety are proactive, rather than reactive. A further duty will be cooperating with enforcement authorities, including the OPSS, which would have greater power to directly enforce, and sanction non-compliance with, product safety legislation.

Implementing “due care requirements”

Taking a more proactive approach to preventing the de-listing and re-listing of unsafe products will be a priority for all online marketplaces under the Government’s proposals.

This is embodied in proposed “due care requirements”, which would be set out in legislation and applicable to all online marketplaces. These requirements would include:

• identifying specific risks by proactively monitoring product recall alerts, supply chains, and their own marketplaces;
• collecting and verifying information concerning third-party sellers and their products, and sharing this with enforcement authorities where required;
• developing policies and procedures on product safety that are tailored to the business, its activities, and its levels of risk;
• reporting on product safety activities and progress.

Improving consumer-facing information

Furthermore, as part of their consumer-facing due care requirements, online marketplaces would be required to list product safety and manufacturer information for high-risk products.

Under existing legislation, such as the Electrical Equipment (Safety) Regulations 2016, this is only required on a product’s packaging or accompanying documents, making it difficult for online consumers to tell if a product is compliant until they have purchased and received it.

Under the Government’s proposals, online retailers would need to provide such information as:

• appropriate safety warnings;
• information concerning the third-party seller, if applicable;
• any relevant checks;
• key product safety information.

What do these proposals mean for ecommerce businesses?

Legislation that benefits the consumer and ensures that the products they buy are safe can only be a good thing. Making it harder for dangerous products to list on online marketplaces also improves consumer trust in ecommerce sites – more so if that site takes a proactive approach to monitoring and improving product safety.

While a General Election is on the way, it is likely the OPSS will pursue this updated framework – a framework that is likely to be as important to an incoming Government as it is the current one.

That being said, the Government’s proposals stand to increase the burden on ecommerce businesses to develop adequate processes, procedures, and reporting systems. Greater scrutiny of, and consequences for, non-compliance are also on the horizon.

Ecommerce businesses would do well to review their current systems now to make sure they are fit for purpose. In the long term, this will ensure that they both meet any new legislative requirements and, more importantly, ensure the safety of their customers.