Regulatory Parity Redefining E-Commerce Risk
This blog was originally posted on 19th November, 2025. Further regulatory developments may have occurred after publication. To keep up-to-date with the latest compliance news, sign up to our newsletter.
AUTHORED BY JOYCE COSTELLO, SENIOR REGULATORY COMPLIANCE SPECIALIST, COMPLIANCE & RISKS
The global regulatory landscape is moving to close the product safety and compliance gap that previously favoured products sold via e-commerce and cross-border transactions.
Recent developments show that regulators are now striving for a level playing field where the same high standards apply to all products, regardless of the sales channel or origin.
This trend is being driven by comprehensive legislative efforts that introduce new obligations for both online marketplaces and parties using these platforms to sell their products.
Want a high-level snapshot of Regulatory Trends in Product Safety for the next 12-18 months? Check out our blog.
Multi-Faceted Motivations Driving Regulation
Regulatory controls on online marketplaces and e-commerce serve multiple public interest goals and reflect a broader regulatory philosophy going beyond basic product safety.
Regulation is instrumental in preserving market integrity and fair competition through the creation of a level playing field, the prevention of unfair trade practices, price manipulation, counterfeiting, and anti-competitive behaviours.
Regulation of digital selling models also promotes environmental and social policy objectives. Many product-based regulations are designed to achieve environmental protection, reduce harmful emissions, phase out hazardous substances, and encourage sustainable production and consumption. Tightening rules around e-commerce can help prevent environmental dumping and the cross-border circulation of substandard goods.
Controls also tackle issues like forced labor, misleading practices, online manipulative design (so-called “dark patterns”), protection of minors, and broader welfare concerns.
Interested in how the rise in e-commerce imports is impacting compliance in the EU? Read our blog ‘EU to Address Surge in Imports Through Non-EU E-Commerce Platforms‘.
European Union: DSA, GPSR, Responsible Person
EU Digital Services Act (DSA)
In the past, online marketplaces relied upon their status as intermediaries to avoid responsibility for the compliance of third-party sellers.
This position has however dramatically changed. The EU’s Digital Services Act (Regulation (EU) 2022/2065, the ‘DSA’), in effect since 17 February 2024, unequivocally makes online marketplaces accountable for products they list for sale, and requires them to take action against illegal and unsafe listings.
Any company providing an online marketplace must:
- Keep consumers informed: if a marketplace becomes aware that an illegal product was sold, they must inform the consumers who bought it in the last six months. In the event that they do not have contact details, this information must be made public on their platform
- Trace traders: marketplaces are obligated to know their business customers. Efforts must also be made to enhance the traceability of products including through the use of advanced technological solutions
- Enable trader compliance: traders have their own information obligations towards consumers, and should be facilitated to do so by the online platform interface
- Conduct reasonable checks: marketplaces must randomly check against existing databases whether products on their sites are compliant
- Be transparent: better information on terms and conditions is essential. Intermediaries should also be transparent about their use of algorithms for recommending products to users
- Avoid ‘dark patterns’: the marketplace interface must not employ misleading tricks that manipulate users into choices they do not intend to make
- Respect trusted flaggers: trusted flaggers are designated entities with proven expertise in identifying illegal online content, including products. The DSA requires their notifications to platforms to be prioritized and processed without delay
- Adopt measures against misuse: online marketplaces are obligated to suspend, for a reasonable period and after a prior warning, the provision of their services to recipients (e.g., sellers) who frequently provide manifestly illegal products
For Very Large Online Platforms (‘VLOPs’), the degree of oversight is even greater. They must implement risk management measures, provide access to data for vetted researchers and have to submit their services to an audit analysing their vulnerability to illegal goods on their platforms. VLOPs must publish reports biannually, and bear a stricter reporting burden than other online intermediaries.
Obligations under the DSA complement the due diligence requirements introduced under Regulation (EU) 2023/988 (the ‘GPSR’) in enhancing consumer protection in the age of the digital market.
General Product Safety Regulation (GPSR)
Since the entry into force of the GPSR, products offered to EU consumers online (whether through e-commerce shops or marketplaces) are now explicitly subject to the same safety requirements as products sold in physical stores. Online stores must clearly display (on their interface) key information such as the product identification (e.g., image), manufacturer or EU-authorised representative name, and relevant safety warnings or instructions. This ensures that consumers have the safety information before purchase, in the same way as they do when purchasing offline.
In addition, the GPSR explicitly imposes specific product safety obligations on providers of online marketplaces, including:
- Cooperation and contact: marketplaces must designate a single point of contact for market surveillance authorities and consumers and register this on the EU Safety Gate Portal
- Removal obligations: marketplaces must act on orders to remove or disable access to dangerous products within two working days
- Internal processes: marketplaces need to have product safety processes in place in order to comply without undue delay with the relevant requirements of the GPSR
- Compliance by design: marketplaces must organise their online interface in a way that enables traders offering the product to provide the required information for each product offered and that ensures that the information is displayed or otherwise made easily accessible by consumers on the product listing
- Consumer notification: marketplaces must notify consumers who purchased a recalled or dangerous product via their platform
- Suspension: after having issued a prior warning, marketplaces are required to suspend for a reasonable period of time traders who frequently offer non-compliant products
Mandatory EU-Based Responsible Person
The EU ensures product traceability and enforcement for CE-marked products imported from outside the EU (a very substantial portion of which are goods sold online) through the responsible economic operator (or Responsible Person) mandate.
The GPSR extends this concept to all non-food consumer products sold in the EU. This person/entity must be established in the EU, and their contact details must be clearly displayed on the product, packaging, or an accompanying document, ensuring authorities have a point of contact within the EU to enforce compliance. This closes the gap for non-CE marked products shipped directly from third countries to EU consumers.
Digital Information
The EU is leveraging technology to enhance transparency and to enhance compliance checks.
Emerging regulations, like the Ecodesign for Sustainable Products Regulation, and the Omnibus IV proposal, are introducing the Digital Product Passport (DPP), a digital record of a product’s composition, sourcing, etc. which will link to products via a QR code or similar method, providing authorities and consumers with instant access to required compliance documentation.
USA: S.3069, INFORM Act, eFiling
Protecting Americans From Harmful CCP Products Act
US Senate Bill S.3069, introduced in the Senate by Senator Scott on 29 October 2025, would amend the Consumer Product Safety Act (CPSA) to give the Consumer Product Safety Commission (CPSC) enhanced authority to deal with potentially hazardous products originating from China.
Specifically, the bill would allow the CPSC to issue mandatory recalls for consumer products that present a substantial hazard if the manufacturer or retailer is located in the People’s Republic of China (PRC), including Special Administrative Regions Hong Kong and Macao, in circumstances where the CPSC has requested information or action from the manufacturer or retailer about a potential hazard, and they failed to respond adequately, or in time. This mandatory recall could be issued without the consent of the Chinese manufacturer or retailer. A “rebuttable presumption” would favour the CPSC’s claim that a product does pose a substantial hazard – in other words, that claim is presumed true unless the manufacturer or retailer can successfully rebut it.
In addition, the definition of a “distributor” in the CPSA would be modified to explicitly include e-commerce platforms headquartered in or primarily operating from the PRC, and that facilitate the sale of consumer products to American consumers. By gaining the statutory designation of a “distributor,” these platforms would, for products they facilitate, gain the legal responsibilities that distributors normally have under the Act. Such platforms could be held responsible in ways they currently might not be.
US INFORM: First Enforcement Action
Since 27 June 2023, the Inform Consumers Act has demanded stronger seller identity verification for online platforms.
In September 2025, the FTC brought its first action under the Act, for alleged failure to provide consumers with required information and tools to help them avoid and report stolen, counterfeit, or unsafe goods while shopping online.
According to the Director of the FTC’s Bureau of Consumer Protection, the action serves as a reminder to online marketplaces that violating the INFORM Act can result in serious consequences, including civil penalties.
Any company operating an online forum (platform) for other entities to sell goods must consider whether they may be covered by the INFORM Consumers Act and, if so, ascertain their compliance obligations under it. It is also critical that online marketplaces communicate with their third-party sellers about the information the act requires to be collected, verified, and disclosed.
Mandatory eFiling of Certificates: From Reactive to Proactive Enforcement
The mandatory deadline for eFiling for most imported consumer products is 8 July 2026.
The CPSC’s mandatory eFiling rule is a strategic response to the compliance challenges posed by e-commerce, particularly the massive influx of small, direct-to-consumer shipments from overseas.
The rule applies to all imported consumer products which are subject to a mandatory safety standard under the CPSA, including “de minimis” shipments (valued at less than $800).
Importers must electronically submit key data elements from the Certificate of Compliance (whether a GCC or CPC) with CBP at the time of entry filing via the Automated Commercial Environment (ACE) system. The data-driven system is intended to support the compliance of products purchased through e-commerce, by closing a major loophole used to introduce non-compliant products into the U.S. market.
Data transmitted through the CPSC’s Risk Assessment Methodology (RAM) algorithms will enable an assessment of health and safety risk of the product while it is still at the port of entry, allowing CPSC and CBP to more effectively target and intercept high-risk products before they reach consumers.
Developments Beyond the EU and US
While the EU and US are leading with a lot of these reforms, regulators globally are also adopting a more stringent approach towards e-commerce sales and marketplace liability, some recent examples of which are summarised below.
China
China’s State Administration for Market Regulation (SAMR) has issued an announcement regarding the supervision of consumer product recalls for items sold through online channels. All e-commerce operators, both marketplaces and parties using them to sell products, must ensure products meet safety standards by establishing systems to collect and process information on product defects.
SAMR has instructed that, upon receiving or learning of a recall notice, they immediately stop selling the defective product.
If they initiate a recall due to a product defect, they must publicize the recall information in a prominent location on their main page or website and clearly inform consumers of their rights.
SAMR has also said it will regularly push recall information to e-commerce platforms.
India
In India, the Central Consumer Protection Authority outlines specific requirements for how radio equipment must be listed on e-commerce platforms. No radio equipment may be listed or sold if its possession or use requires the buyer to obtain a frequency assignment from the Department of Telecommunications (DOT). Online platforms may not allow the listing or sale of mobile signal boosters and wireless jammers.
Product listings must specify frequency ranges and other technical parameters and include proof of regulatory approval (equipment type approval).
Listings lacking frequency information or necessary certification must be taken down.
In response to reported instances of appliances being sold without the required BEE star labels or proper display of the labels on various points of sale, including e-commerce websites, and detected counterfeit star labels, the Bureau of Energy Efficiency (BEE) has warned all e-commerce platforms and manufacturers selling appliances online that the BEE star label must be displayed on all registered appliances. The label must be clearly visible and readable in the primary product image and within the product description, and display is required across multiple touchpoints, including search result previews, shopping cart summaries, and checkout pages. Failure to take compliant action will be penalised.
Philippines
The Department of Trade and Industry (DTI) of the Philippines has introduced an Order, DAO 25-02, to address the prevalence of uncertified consumer products being sold online, and which pose safety risks. E-retailers must now complete a one-time registration and obtain a Certificate of Online Registration (COR). Non-compliance will result in a notice of suspension of their online operations. If a registered seller is found selling uncertified products, their COR will be automatically cancelled. Marketplaces must verify that sellers on their platform who deal in these certified goods are registered and hold a valid COR and risk penalties, plus “other administrative or criminal sanctions” for failure to do so.
Russian Federation
Foreign parties selling to Russian consumers via online marketplaces and the marketplaces mediating sales should be prepared for the commencement of two complementary laws, Law No. 289-FZ and Law No. 290-FZ, on 1 October 2026. Law no provides for the establishment of a government-managed registry of digital intermediary platforms, to include marketplaces.
Foreign platforms may be added to the register, which could in future bring additional compliance obligations. Law No. 290-FZ ensures that consumers buying via a marketplace have the right to bring defect claims directly to the seller on that platform. In turn, the platform operator (i.e., the marketplace) must provide the technical means for such claims to be submitted via the platform. If the consumer is claiming a refund, the platform must enable a refund of money via the platform.
Strict transparency and compliance standards will also apply to sellers listing products on digital intermediary platforms. Buyers must have full, legally required information, and platform operators will be expected to take active responsibility in verifying compliance, including blocking non-compliant listings.
The New E-Commerce Compliance Reality
The global regulatory environment is clearly shifting towards regulatory parity, ensuring that high safety and compliance standards apply universally, regardless of the sales channel or product origin. The multifaceted legislative efforts from the EU (DSA, GPSR), the US (S.3069, INFORM Act, eFiling), and beyond demonstrate a commitment to imposing explicit responsibilities and due diligence requirements on online marketplaces and their third-party sellers.
Proactive engagement with these accelerating and stringent global controls is increasingly important for all companies operating in the digital market.
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