Changes from report parliamentary committee draft to plenary report

Introduction

The rapid growth of e-commerce has revolutionised market accessibility across the European Union, but it has also highlighted significant regulatory challenges. As more goods are sold online, particularly from third countries, issues surrounding customs, taxation, product safety, and fair competition have become more pressing. The growing volume of non-compliant goods entering the market poses serious risks to consumer safety and the fairness of competition, undermining EU standards. This draft report outlines the key challenges facing the e-commerce sector and proposes measures to close regulatory gaps, ensuring a safer and fairer marketplace for businesses and consumers alike.

Key Challenges

One of the primary concerns in the EU e-commerce landscape is the increasing volume of unsafe and illicit products. The number of small shipments into the EU has surged dramatically, with over 4.6 billion parcels arriving in 2024 alone. Many of these goods, often shipped from outside the EU, bypass necessary compliance checks, putting consumers at risk and undermining market integrity.

Although the EU has implemented a comprehensive compliance framework, including legislation such as the Digital Services Act (DSA) and the Market Surveillance Regulation (MSR), and the General Product Safety Regulation (GPSR), enforcement remains difficult. Customs and market surveillance authorities are struggling to cope with the overwhelming volume of small shipments, and inconsistencies in resources, data sharing, and technology hinder their ability to effectively regulate online sales.

EU businesses also face unfair competition. While EU-based manufacturers are subject to stringent safety and environmental regulations, many third country sellers avoid these rules, creating an uneven playing field. This leads to a loss of market share for EU producers, as non-EU products flood the market without adhering to the same standards.

Further complicating the situation are regulatory loopholes that allow non-EU online platforms to bypass compliance, leaving the burden of ensuring product safety largely on EU e-commerce platforms. This situation continues to allow unsafe and illegal goods to enter the EU market unchecked.

Urgency for short-term measures

To address the regulatory challenges in the e-commerce sector, several key proposals have been put forward. First, there is a need for increased resources for customs and market surveillance authorities. These agencies must be adequately funded to handle the growing volume of non-compliant goods and better enforce EU regulations.

Collaboration among national market surveillance and customs authorities must be enhanced to address the regulatory gaps that currently exist. This cooperation will be essential in closing the enforcement gaps that allow unsafe goods to enter the market.

The establishment of additional testing facilities for e-commerce products would improve compliance with safety regulations, particularly for high-risk goods such as batteries and textiles. These facilities will help ensure that products meet safety standards before they enter the EU market.

The introduction of a Digital Product Passport (DPP) would allow for better tracking of e-commerce goods and ensure compliance information is available for pre-screening, particularly for high-risk products. This would help identify non-compliant goods before they enter the single market.

Member States should better utilise existing penalties and sanctions to deter economic operators from violating legislation. The draft report supports minimum harmonisation of infringements and non-criminal sanctions across the EU to close regulatory gaps and address e-commerce challenges effectively, but stresses that exact penalty levels should not be standardised due to varying legal frameworks of Member States.

Need for Regulatory Reforms

The revision of the EU Customs Code is essential to better manage e-commerce imports. The draft report supports the Commission’s push for swift negotiations with the Parliament and Council, recognising the need for timely customs reform to enhance EU competitiveness and consumer protection.

The establishment of a new EU Customs Authority and the EU Customs Data Hub will enhance coordination and provide vital support to national authorities in managing e-commerce-related imports. This initiative will equip customs authorities with the necessary tools to effectively monitor goods entering the EU, improving overall market oversight.

A key reform is removing the customs duty exemption for goods under EUR 150, which will enhance consumer protection and boost EU competitiveness.

Equally important is the ‘deemed importer’ concept, which holds economic operators accountable for the compliance of goods sold online from outside the EU. This ensures all e-commerce actors meet product safety standards and that platforms offering non-compliant goods are responsible for customs-related issues, further safeguarding consumers.

The draft report also stresses the importance of simplifying and aligning the ‘deemed importer’ concept with existing legislation to ensure greater clarity and effectiveness.

Leveraging Technology for Enhanced Enforcement

The integration of advanced technologies such as AI, blockchain, and IoT is essential for improving e-commerce regulation and market surveillance. These technologies can enhance the ability of customs and market surveillance authorities to monitor product listings, automate inspections, and perform risk assessments. However, the high costs of implementing such technologies, especially for low value goods, remain a barrier. Overcoming these challenges will be critical to improving the effectiveness of compliance checks without overburdening businesses.