APPLiA feedback to the Call for Evidence on the Digital Fairness Act

APPLiA has provided its feedback to the European Commission’s Call For Evidence on the Digital Fairness Act.

Major gaps remain in enforcing compliance on online marketplaces for non-compliant products and negatively affecting consumer safety and the level playing field. 

• All the traders placing products on the Union’s territory should have a responsible person in the EU, or online marketplaces should resume responsibility.
• Existing (e.g. EPREL) and new databases should be utilised to ensure effective compliance for the market surveillance and customs authorities. 

Online marketplaces as a major source of non-compliant home appliances 

The Digital Fairness Act should address the remaining gaps in the enforcement of the EU’s rulebook on online marketplaces to ensure that European consumers are protected and traders operate in a fair market with the same rules applied to everyone.

Consumers regularly purchase home appliances directly via online marketplaces from third-party traders, and while direct consumers purchase offers benefits, in recent years an increasing number of non-compliant products have been reaching consumers, putting them at harm and eroding the level playing field.  In 2024, for example, more than 400 products reaching consumers from outside of the EU were listed under the "electrical appliances " category in the EU’s Safety Gate system, with over 200 posing significant risks such as burns or electric shocks.  Furthermore, not applying the same safety and environmental standards puts European manufacturers at a disadvantage as such products do not follow the same extensive standards, making them able to sell products at a much lower price.

Fitness check in that regard rightly acknowledged the existing gaps in the digital and consumer rulebook. In particular, the Digital Services Act (DSA) and General Product Safety Regulation (GSPR), which do provide regulatory tools to address the issue, remain limited in addressing traders who do not have a legal entity within the European Union. The lack of a legal entity of traders within the Single Market limits the ability of market surveillance authorities to enforce the rules.

Furthermore, national enforcement bodies can only act on their own territory and hence, without an EU legal entity, enforcement cannot be effective. This creates a legal loophole undermining compliance, consumer safety and environmental protection as well as the level playing field. To close the legal loophole, the traders selling products into the EU should be required to have a legal entity in the Union, or online marketplaces should be required to have a legal entity in the Union and assume legal responsibility under EU law and specific national legislation. This includes liability for non-compliance with safety and environmental regulations, as well as national customs and VAT payment obligations. 

By requiring online marketplaces to either assume responsibility for the safety of products listed on their platforms or mandate and control that traders effectively appoint an authorised representative within the EU, this way the enforcement of EU regulations could be streamlined, which would significantly enhance monitoring and consumer protection. 

Furthermore, we recommend strengthening the enforcement of Regulation (EU) 2019/1020 on market surveillance and compliance of products. Article 14(4)(k) empowers authorities to require the removal of non-compliant products from websites or even to shut down websites in cases involving “serious risk.” To our knowledge, this power has rarely, if ever, been exercised. This legal tool should be used in practice.  We question why this authority is limited only to products posing a “serious risk.” Non-compliant products in general undermine environmental objectives, a level playing field, performance standards, and consumer expectations, and therefore merit similar enforcement attention.

Leveraging the EPREL Database for Broader Compliance

As an aid in ensuring more effective monitoring of product compliance, was the creation of a database. A similar system exists for energy-labelled products under the EPREL database, where consumers and market surveillance authorities can access accurate product information. Registration in EPREL is mandatory for selling energy-labelled products on the EU market, and from 2024, companies must register with a qualified E-Seal to list products, effectively requiring the supplier, importer, or manufacturer to be registered in an EU Member State. A database for wider product categories could be developed, requiring only essential information to avoid placing unnecessary administrative burdens on companies.

This system would allow online marketplaces to verify product listings and help market authorities ensure compliance with EU legislation, improving transparency and regulation.