Market Insights 5 min read

EU Concept of “Placing on the Market” – A Word of Caution for Online Operators

Jun 27, 2018 EU Concept of “Placing on the Market” – A Word of Caution for Online Operators

Online shopping 300With the development of e-commence and the internet the way in which consumers shop and how businesses sell their goods has completely changed over the last 10 years.

To protect the interests of consumers and ensure the products that they purchase are safe, the EU has numerous Product Regulations and Union Harmonization legislation in place that must be abided by regardless of the selling technique used.

For the purposes of product safety or Union harmonization legislation, a product is placed on the market when it is made available for the first time on the Union market. Online operators need to be aware of the legal concept of “placing on the market” which is the key term for operators to determine their responsibility and liability under these product safety laws.

The revised Blue Guide (2016) offers the best advice on how this legal concept applies to the realm of e-commerce by examining the online operator based in the EU and based outside the EU.

1. Section 2.3 of the Guide states that “products offered for sale by online operators based in the EU are considered to have been placed on the Union market, regardless of who placed them on the market (the online operator, the importer, etc.).” This basically means that products offered for sale online to consumers and other end-users on the Union market by online operators in the EU must comply with applicable EU product legislation.

2. At the same time the Blue Guide states that “products offered for sale online by sellers based outside the EU are considered to be placed on the Union market if sales are specifically targeted at EU consumers or other end-users.”  Online sellers need to be aware that this essentially means that EU product legislation applies to cases where online sellers based outside the EU target consumers or other end-users within the EU.

The market authorities will look at each scenario on a case by case basis. For example they will look at whether it is apparent from the website and the online seller’s overall activity that it intends selling products to consumers or other end-users in the Member States.

Furthermore according to the Blue Guide “when an online operator delivers in the EU, accepts payment by EU consumers/end-users and uses EU languages, then it can be considered that the operator has expressly chosen to supply products to EU consumers or other end-users.”

This means that online operators need to be aware that even though they are based outside the EU that they must comply with all applicable EU product legislation.

Finally, in a similar vein this fact is highlighted by the 2011 case of L’Oréal SA v eBay International AG, Court of Justice of the European Union, Case C-324/09, 12 July 2011. Although the case focuses on trade marks it does provide a warning to online operators in that according to the European Court of Justice, the website of eBay was found to target consumers in the territory covered by the relevant national and Community trademarks. Therefore, the offers for sale on the website fell within the scope of EU rules on IP rights.

If you would like to find out how you can stay on top of regulatory issues related to the Internet of ThingsTalk to Us today!