7 Aug 2019
Germany Examines Challenges of E-commerce with Regard to Environment and Consumer Protection
Earlier this summer, the German Federal Ministry of Justice and Consumer Protection and the Federal Ministry for the Environment jointly organised a conference in Berlin to discuss the challenges and opportunities presented by e-commerce. The e-commerce sector is viewed as growing at a rapid pace. According to the German trade association HDE, online trade already accounts for more than ten percent of total retail sales and almost 15 percent in the non-food sector, with an increase of 4.4 billion euros in 2018. Options for measures at the national level, to prevent adverse effects on the environment and health, were discussed. Participants aimed to find concrete ways to prevent abuses, as well as to identify technical approaches and good practices for enforcement and market surveillance.
At the conference, experts from politics, customs administrations and market surveillance authorities, economic operators and trade associations, as well as civil society organizations, consumer protection organisations and environmental associations, discussed the challenges to both environmental protection and consumer protection associated with e-commerce. The issues that were identified and that related to e-commerce are as follows:
- Non-compliance of products with EU standards and regulations which can make products unsafe for consumers, e.g., prohibited or restricted substances in consumer goods, and others such as plant protection products or industrial chemicals entering the European market;
- Lack of transparency in relation to the products themselves, their origin and manufacturing circumstances; and
- so-called “third country free-riding”: non-compliant products that create a competitive disadvantage for law-abiding companies.
Remedies under the new European Market Surveillance Regulation were perceived as only a marginal improvement to the above issues. Hong Kong sellers may be recall that the latter-mentioned law, Regulation 2019/1020 on market surveillance and compliance of products, was published in the Official Journal on 25 June 2019, with the aim of addressing the problem of non-compliant products, which are felt to endanger consumers and put compliant businesses at a competitive disadvantage. The new EU law establishes procedures for economic operators, provides for robust market surveillance of products covered by EU harmonisation legislation, and provides for controls on products entering the EU market (see Issue No. 151/2019 of the Regulatory Alert-EU for more details of the EU law).
The German Government is also of the view that the practice of immediate and organised destruction of returned goods and other usable products in mint condition as a purely profit-optimising measure has been deemed “not tolerable” in terms of environmental and resource protection, and must be stopped. The conference identified an urgent need for action and changes in mentality in order to find ways to avoid generating waste.
Furthermore, the participants at the conference discussed issues with regard to the enforcement of new circular economy legislation in e-commerce, specifically concerning electrical and electronic equipment (EEE), packaging, batteries and chemicals. A suggested solution was making it mandatory for operators of e-marketplaces to provide proof of proper registration of products under the respective laws (concerning EEE, packaging, batteries and chemicals). Only vendors that are found to be validly registered would then be able to appear on e-marketplaces.
On the other hand, a recent report from the German Environment Agency (the Umweltbundesamt - UBA) also shows the potential contribution of digitalisation to sustainability. For instance, second-hand e-platforms allow for the trade, exchange and donation of second-hand clothing, thereby contributing to a more efficient use of resources. Green apps on mobile devices contribute to reducing the burden on the environment by supplying information about pollutants potentially contained in a product by scanning the barcode.
In rural areas, the logistics of e-commerce can save CO2 emissions because the postal service replaces individual consumer shopping trips by car – except same-day delivery, which generates high CO2 emissions since consignments cannot be delivered in one trip.
In addition, social media, while allowing for product placement and personalised advertisements, which on their face encourage consumption, also encourage consumers to compare products through product reviews, which in turn puts pressure on producers to operate in a more environmentally friendly way (e.g., less plastic packaging, better product design and longer durability).
The participants at the conference discussed options with regard to measures on the national level to prevent adverse effects on the environment and health. They aimed to find concrete ways to prevent abuses, as well as to identify technical approaches and good practices for enforcement and market surveillance.
As the summer conference was organised by the German Federal Ministry of Justice and Consumer Protection and the Federal Ministry for the Environment, it is perfectly plausible that proposals for legislation, either at the German or EU level, may be on the horizon.