Now the EU too – Following the US, the EU Commission wants to better scrutinize cheap imports – Image: Xpert.Digital
Consumer protection: This is what the EU is planning to combat the risks of online bargains
China vs. Europe: How the EU is tightening its control over online marketplaces
The European Union faces a new challenge: the massive increase in cheap imports from third countries, particularly China, is putting European companies and consumers alike under pressure. In a comprehensive package of measures, the EU Commission has now presented proposals for better controlling and regulating these imports. Online marketplaces such as Temu, Shein, AliExpress, and the Amazon Marketplace are a particular focus.
Background and extent of the problem
Online retail is booming, and with it, the cross-border shipping of products, often offered at incredibly low prices. However, the downside of this development is serious problems regarding product quality, consumer protection, and fair competition.
- Approximately 12 million parcels reach the EU every day.
- In 2023, 4.6 billion low-cost shipments from third countries were imported into the EU – this corresponds to around 97% of direct imports.
- The number of these packages has doubled compared to the previous year.
- Up to 96% of products do not comply with EU regulations regarding safety standards, labeling and environmental guidelines.
Many of these products evade the strict regulations that apply to European manufacturers. In particular, clothing, electronics, and toys often contain hazardous substances, do not comply with CE markings, or circumvent applicable occupational safety and environmental standards.
The planned measures of the EU Commission
To counteract this problem, the EU is planning a series of strict regulatory measures:
1. Introduction of a processing fee
Every shipment from online retailers like Temu and Shein will be subject to an additional fee. This is intended to cover the extra costs of inspections and customs procedures.
2. Abolition of customs exemption
Currently, packages with a value of less than €150 are duty-free. This regulation is to be abolished in order to close loopholes for cheap imports and to create a level playing field for European companies.
3. Increased controls by customs and market surveillance authorities
Customs and market surveillance authorities are to receive more staff and technical resources to identify counterfeit or unsafe products more effectively.
4. Investigations against platforms
Legal proceedings have already been initiated against Shein, as the company is suspected of violating EU consumer protection regulations. Further investigations against other platforms are possible.
5. Use of new technologies for product testing
Artificial intelligence (AI) will be used to detect potentially non-compliant products. This should enable faster and more precise analysis of imported goods.
Criticism and demands from consumer protection advocates
The Federation of German Consumer Organizations (vzbv) considers the planned measures insufficient and calls for additional regulations:
- Preventive controls that allow for the identification of unsafe products before import.
- Stricter liability rules for online marketplaces, so that they can be held more accountable for products sold on their platforms.
- Better protection against products containing harmful substances, especially toys and textiles.
Industry reactions
European companies
- Zalando welcomes the EU's proposals and calls for consistent enforcement of the regulations for all market participants.
- The German Retail Federation (HDE) supports the planned changes, but warns of additional bureaucracy for European companies.
Reactions from online platforms
Amazon
Amazon has not yet officially commented on the new regulations, but points out that it has already taken steps to remove unsafe products from its platform. Nevertheless, Amazon faces further regulatory challenges.
- The company is expected to face an EU antitrust investigation in 2025 for violations of the Digital Markets Act (DMA).
- Amazon has also launched legal action against the new EU Digital Services Directive and is attempting to challenge its classification as a “very large online platform”.
Temu and Shein
Temu and Shein have stated that they comply with EU regulations. Nevertheless, there are recurring reports of deficiencies in product quality and labeling.
General impact on online platforms
The new regulations are expected to have far-reaching consequences for online retail:
- Traders need to take on more responsibility, especially regarding safety standards and the collection of customs duties and taxes.
- Stricter product controls could lead to some suppliers withdrawing from the European market.
- Smaller online retailers could be affected by additional costs, which could lead to a market shakeout.
Will the EU successfully combat cheap imports?
The European Commission has recognized the need for action to strengthen consumer protection, ensure fair competition, and protect European businesses. Whether these measures achieve the desired long-term effects depends on how consistently they are enforced and whether they are supplemented by additional regulations.
The coming months will show how the new regulations affect the market and whether platforms like Temu, Shein, and Amazon will need to adapt their business models. One thing is certain: European online retail is facing a new era of regulation and control.
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