Introduce Third Party Liability for Fulfilment Houses

Overseas Sellers are flooding the UK with counterfeit or unsafe products that don’t comply with EU Safety, Packaging and WEEE standards. These goods can be manufactured at a fraction of the cost of compliant goods.

Under current laws, if a UK consumer dies after buying a dangerous item from a Chinese Seller on eBay, there is absolutely no one that can be held liable. Liability lies squarely with the Chinese seller who is completely out of reach from prosecution.

Currently Fulfilment Houses such as Amazon can warehouse and fulfil orders of non-compliant goods for overseas retailers without any liability. No compliance includes:

  • Non-compliance with the consumer safety legislation associated with the CE mark.
  • Non-compliance with extended producer responsibility legislation for waste electricals, waste batteries and waste packaging.
  • Non-compliance with other product related legislation such as ROHS, REACH, and the requirements of the Energy Related Products directive.
  • Fake and counterfeit goods.

Trading Standards powers are very limited to the safety of products.  The issue with fulfilment houses is that the definitions and offences in the Consumer Protection Act 1987 mean that Fulfilment Houses have no responsibilities under that legislation. This means they have to fall back on the General Product Safety Regulations 2005. 

Currently, under GPSR, a Fulfilment House is a distributor (a person in the supply chain whose activities do not affect the safety of a product), and only commits an offence where there is an element of guilty knowledge; if they don’t know what the packages contain, this is far from straightforward.  They can, however, require products to be withdrawn and destroyed where they have evidence of a safety breach.

Identifying unsafe products presents logistical problems as this usually requires them to select packets at random from the thousands on the shelves, opening and examining their contents.

The EU Commission has recently proposed new legislation to tackle this issue:

“The increasing number of illegal and non-compliant products on the market distorts competition and puts consumers at risk. Many economic operators disregard the rules either through lack of knowledge or intentionally to gain a competitive advantage. Greater deterrents are needed, yet market surveillance authorities are often underfunded and constrained by national boundaries. Businesses are often active both within the EU and worldwide, and modern supply chains are evolving rapidly. In e-commerce in particular, market surveillance authorities have great difficulty tracing non-compliant products imported into the Union and identifying the responsible entity within their jurisdiction.”

They have proposed Fulfilment Houses would be or become economic operators under Article 3(12)(h):

‘‘economic operator’ means the manufacturer, the authorised representative, the importer or the distributor, and including any other natural or legal person established in the Union and other than a distributor, who warehouses, packages and ships products to or within the Union market’.

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