This third installment of our series (see part 1 and part 2) highlights regulators and other stakeholders’ growing focus on e-commerce platforms’ role in protecting consumers from unsafe products, as the percentage of online consumer product sales continues to increase. In addition to CPSC representatives, many other symposium presenters and panelists discussed this issue at the International Consumer Product Health and Safety Organization’s 2024 annual symposium.
CPSC Chair Alexander Hoehn-Saric dedicated a significant portion of his keynote address to the issue of e-commerce platforms. He asserted that e-commerce platforms need to take more responsibility as gatekeepers to protect consumers from potentially unsafe products to address what he called the current “Wild West” of online marketplaces. He explained that as the prevalence of e-commerce continues to grow and American consumers discover new marketplaces like Temu, online platforms need to embrace “product safety by design.”
Hoehn-Saric plainly stated his view that online marketplaces must play a larger role in removing recalled and violative products from their platforms. Currently, CPSC’s eCommerce Surveillance, Analysis, Field, and Enforcement (ESAFE) team alerts an online marketplace if they find a recalled product or other product that fails to meet a mandatory safety standard on the marketplace’s platform. To their credit, online marketplaces are generally quick to respond and take down the product flagged by CPSC. But Hoehn-Saric explained that this “online whack-a-mole” approach is ineffective, as sellers will often relist the product under a new name or on a different marketplace. He encouraged platforms to be more proactive in monitoring for recalled or violative products and develop more safeguards to sanction third-party sellers that list such products.
Hoehn-Saric also challenged online marketplaces to take more responsibility for educating consumers. He urged them to display safety information more prominently throughout the purchasing process, as consumers are often provided less information online than they would be provided if they purchased the same product in a store. He also said that platforms should take advantage of the data and information they hold by sending safety or recall alerts to consumers via multiple channels (e.g., text messages or push notifications), rather than just email.
Graham Russell, Chief Executive of United Kingdom’s Office for Product Safety and Standards, echoed many of Hoehn-Saric’s points and conveyed his view that online platforms bear responsibility for third-party products sold on their platform because they “build a bridge” between sellers and buyers. He encouraged platforms to consider four key elements to promote product safety:
- Think about who is allowed to sell on your platform. Implement screening steps for new sellers, provide training and information on applicable laws, and impose consequences on violators of product safety controls.
- Consider what products can be sold on the platform. Put checks in place to screen products and categorical bans or restrictions on known unsafe products.
- Empower consumers to make smart and safe buying decisions. Prevalently display safety information and safe use instructions before consumers purchase the product.
- Continuously evaluate your process for responding to take-down requests and product recalls.
Austin Schlick, CPSC’s recently promoted executive director, explained three main challenges e-commerce platforms present from the regulators’ perspectives. The first two challenges are related. First, the amount of foreign “de minimis” shipments (packages with a value of less than $800) has grown and, second, the number of foreign, “fly-by-night” sellers has similarly increased. These types of shipments are subject to fewer import procedures and protections, making it more difficult for CPSC to inspect packages and intercept illegal goods. Third, online marketplaces often disclaim responsibility for third-party sales on their platforms, which Schlick said can open the door to foreign bad actors that can easily evade CPSC oversight and enforcement. Schlick echoed comments from CPSC’s Jen Sultan, Deputy Director of the Office of Compliance and Field Operations; he stated that the CPSC eCommerce Surveillance, Analysis, Field, and Enforcement (ESAFE) team’s monitoring of online marketplaces, while “narrowly” effective, is far from sufficient to protect consumers. The ESAFE team, and CPSC more broadly, lack the necessary resources to prevent online sales of illegal goods and need online marketplaces to take more responsibility.
Whether e-commerce platforms should be held responsible for the sale of recalled and other illegal goods on their platforms is still being debated amongst stakeholders and litigated in courts. But all panelists and speakers agreed that platforms can, and should, develop additional capabilities to prevent the sale of recalled and other illegal goods online to help protect consumers.
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