As the new EU’s GPSR regulation gets into full effect, e-commerce businesses need to keep up with the pace to ensure full compliance. Here are a few key aspects to consider.
Over the past decade, the EU has been at the forefront of the safety regulations, aimed at protecting customers’ rights in various spheres of the digital economy, starting with the all-encompassing privacy-focused GDPR and followed by the recently implemented Digital Markets Act and Digital Services Act regulations.
Quite predictably, given the rapid growth of the e-commerce sector in the past few years, particularly fueled by the increasing EU market penetration by Chinese giants, like AliExpress, Lazada and Temu, at the end of 2024 the European Commission also took a major step forward in terms of regulating the safety of consumer products, sold across the EU, by implementing the new legislation, known as GPSR.
What is GPSR?
GPSR stands for General Product Safety Regulation and refers to the EU’s regulation, which came into force on December 13, 2024 as a replacement to the previously established General Product Safety Directive (GPSD) and is designed to address and mitigate safety risks, associated with consumer products (new, used, reconditioned and or repaired), sold across the territory with the EU, excluding food and medical equipment and other products, which traditionally undergo the more severe risk assessment.
Key GPSR Compliance Requirements
One of the major changes, established by GPSR implies a much broader product coverage, as well as more scrupulous safety guidelines, regarding products made available for sale, either offline or online, required from the product manufacturers, while also putting higher pressure on their so-to-speak responsible economic operators (EOs).
The latter, namely, include either product manufacturers in the EU, or the authorized importers, sales reps and/or fulfillment service providers for non-EU suppliers, who are made responsible for conducting regular safety checks, communicating with the government authorities and handling customer complaints/safety reports and product recalls.
- Requirements from the EOs
Not only does every non-EU manufacturer need to designate their authorized EO, but also make their contact information (a company/responsible person’s name, postal address and email/phone number), available both on the product itself, product packaging and the relevant product page, if it’s being sold online.
In addition, they also need to provide customers with extensive safe use & disposal guidelines and precautions (with proper translation), along with information on how to report non-safe products directly to the EO and the authorities.
The EOs also need to ensure the proper product-safe storage conditions, as well as the relevant documentation for such, which must be made available for authorities’ review anytime as proof of businesses’ compliance with the regulation.
In case of the receipt of a product non-compliance report, the EOs will be responsible for handling product recalls and notifying the authorities immediately, both of the incident and their relevant measures to mitigate its negative consequences.
- Requirements from E-commerce Platforms
As for e-commerce marketplaces, GPSR requires that they must handle online supplier/seller risk assessment, ensure ongoing compliance checks of their products sold via the marketplace, cooperate with the so-called designated surveillance authorities (i.e. process their relevant notices within 3 working days), as well as take action against non-compliant products, if any, in an immediate manner.
In the near future, the regulation also implies the launch of the so-called Safety Gate portal, which e-commerce companies will have to sign up for and use for faster seller/trader/customer notifications/responses, etc.
What makes the GPSR particularly stricter than the formerly established Directive is the implementation of high fines for non-compliance with the regulation, up to 4% of the annual company’s turnover, in addition to the possible civil compensation claims, filed by separate customers/customer groups, which may be attributable both to the non-EU suppliers, their authorized EOs and the e-commerce platforms, too.
Current State of Adoption & Potential Ramifications of GPSR for E-commerce Businesses
With the GPSR regulation having come into full effect on December 13, 2024, major online marketplaces, like Amazon, have adopted strict requirements for their vendors, in terms of their compliance with it, to prevent product/vendor removal from the platform, which commonly includes their necessity to:
- submit responsible EO information, including their contact details to the vendor portal;
- submit product safety information (PSI), including safe use guidelines, manuals, product warnings, emergency guidelines, etc.;
- submit relevant product labeling details (e.g. by uploading packaging images with required information, etc.);
- ensure that all provided documentation is properly translated into all required languages in the country of sale;
- add the required EO and product safety details to all relevant product pages on the particular marketplace website/app.
However, whereas such measures seem justifiable for large e-commerce platforms, smaller market players might find it a much more time- and money-consuming task to ensure their vendor and their own compliance with GPSR. In this respect, many of the small and mid-sized UK-based sellers, for instance, are already considering leaving the EU market for good, given how much operational and financial resources they need to avoid fines (per ChannelX), but the jury is still out on how things will evolve.
The situation may seem tricky for e-commerce marketplaces of Chinese origin, too.
Back in 2024, for instance, Alibaba introduced new requirements for sellers, regarding the establishment of their EOs in the EU and the display of relevant information on their product pages, promising penalties for non-compliant suppliers. Nonetheless, it’s still unclear how the Chinese-based online commerce conglomerates will actually handle surveillance checks, in addition to the regular vendor blocking, given their increased liability according to GPSR.
On the whole, it all comes down to the first massive e-commerce platform safety surveillance check at least in one EU state to fully assess how the GPSR regulation will be actually enforced in the upcoming months. Until then, the only practical tip to share is: to reevaluate, adjust and improve non-stop, and, of course, hope for the best.