Chapter 3|Due Diligence Obligations - Online Marketplaces|📖 8 min read
1. Providers of online platforms allowing consumers to conclude distance contracts with traders shall make best efforts to assess, through random checks or other appropriate means, whether the products or services that are offered by the traders using their services are in principle subject to product safety rules under Union law or national law in conformity with Union law.
2. Where a provider of an online platform, following an assessment pursuant to paragraph 1, has knowledge or has reasonable grounds to suspect that a product or service that is the subject of a commercial communication provided by a trader using that online platform is illegal, that provider shall take the measures provided for in Article 16 as regards the provision of that specific information, insofar as that is technically feasible and proportionate.
3. Where providers of online platforms obtain indications that a product listed by traders on their online interface is illegal, they shall ensure that the trader can be identified in order to take necessary action to address that illegal product.
4. Providers of online platforms shall ensure that traders using their services are aware of the following:
(a) their obligations under Union law applicable to the sale of products or the provision of services, including the applicable sectoral legislation;
(b) the point of contact or mechanism of the competent national authorities which they may contact when they identify specific products or services as being illegal on the basis of Union or national law, including sectoral legislation, so that those authorities may take the appropriate supervisory or enforcement measures.
5. Providers of online platforms shall include, in the terms and conditions of their service, information on any restrictions that they may impose in relation to the use of their service with regard to information provided by the recipients of the service and on the basis for any such restrictions, including an indication of how the restrictions may affect the display or ranking of information provided by traders. They shall include information on any remuneration paid to or received by them for the purpose of the ranking.
Understanding This Article
Article 31 operationalizes the 'compliance by design' principle for marketplaces - the idea that platforms should build legal compliance support into their infrastructure, not just react to violations after they occur. While Article 30 ensures marketplaces know who their traders are, Article 31 ensures marketplaces help traders understand what they can sell and detect when they're selling illegal products.
Paragraph 1 establishes proactive product assessment obligations. Marketplaces must 'make best efforts' (less strict than 'shall ensure') to assess whether listed products are subject to EU product safety rules, using 'random checks or other appropriate means'. This could include: automated keyword scanning for regulated product categories (toys, medical devices, cosmetics); random manual reviews of listings; third-party compliance database integration; machine learning to flag potentially non-compliant products. The 'in principle subject to' phrasing recognizes platforms can't definitively determine compliance, but can identify products falling under regulated categories.
Paragraph 2 creates liability trigger: when marketplace has 'knowledge or reasonable grounds to suspect' a product is illegal, it must take Article 16 notice-and-action measures (investigate promptly, remove/disable if illegal, inform reporter and trader). This establishes conditional liability - if marketplace identifies illegal product and doesn't act, it bears responsibility. 'Insofar as technically feasible and proportionate' qualifies the obligation, recognizing some illegal content may be difficult to address.
Paragraph 3 requires traceability linkage: when illegal product identified, marketplace must ensure trader can be identified. This connects Article 31's product compliance monitoring with Article 30's trader verification - enabling enforcement authorities to hold bad actors accountable, not just remove individual listings while seller simply re-lists under new identity.
Paragraph 4 mandates trader education: marketplaces must inform traders of (a) their EU product safety and consumer protection obligations, including sectoral legislation (e.g., toy safety, cosmetics regulations, medical device rules), and (b) how to contact national authorities when they identify illegal products. This transforms marketplaces from passive infrastructure into compliance educators. Amazon must provide seller resources explaining EU product requirements, CE marking obligations, sectoral rules, and how to report concerns to regulators.
Paragraph 5 requires transparency about platform policies: terms and conditions must disclose restrictions on content, ranking factors (including paid placement), and any remuneration affecting display. If Amazon features sponsored products more prominently, or penalizes sellers with high return rates in search rankings, these practices must be disclosed. This addresses 'black box' ranking systems that traders can't understand or contest.
Article 31 shifts marketplaces from 'dumb pipes' to 'smart gatekeepers' - expected to understand product categories, assess compliance risks, educate traders, and intervene when violations detected. For Amazon selling 350+ million products across thousands of categories, this represents enormous compliance challenge.
Key Points
Marketplaces must assess (random checks or other means) if products are subject to EU product safety rules
If marketplace has knowledge/reasonable grounds to suspect product is illegal, must take Article 16 measures (notice-and-action)
When illegal product identified, must ensure trader can be identified for enforcement action
Must inform traders of: (1) EU product safety/consumer protection obligations, (2) how to contact authorities about illegal products
Terms must disclose restrictions on content, ranking factors, and remuneration affecting ranking
'Compliance by design' philosophy - build compliance support into platform infrastructure
Complements Article 30's trader verification with product-level compliance monitoring
Practical Application
For Amazon (Multi-Category Marketplace): Amazon must implement: (1) Product categorization system identifying regulated categories (toys requiring EN 71 compliance, cosmetics requiring CLP labeling, medical devices requiring CE marking, electrical products requiring EU safety standards); (2) Automated listing screening flagging products in regulated categories without compliance documentation; (3) Random manual reviews of 1-2% of new listings per category checking for compliance red flags; (4) Seller onboarding materials explaining EU product regulations: 'Selling Toys in EU? Requirements: CE marking, EN 71 testing, choking hazard warnings, chemical restrictions...'; (5) Seller help center with category-specific compliance guides and authority contact information; (6) When listing flagged as potentially illegal (e.g., toy without CE mark, cosmetic with prohibited ingredient), initiate Article 16 process: notify seller, request compliance documentation, suspend listing if not provided, report to authorities if clearly dangerous; (7) Terms disclosing: 'Amazon may restrict products violating safety regulations. Sponsored products appear in top positions. High return rates negatively affect search ranking.' (8) Maintain trader identification from Article 30 verification, enabling authorities to pursue bad actors selling dangerous products.
For eBay (Auction and Fixed-Price Marketplace): eBay faces unique challenge - auction format means items listed quickly, often by consumers clearing attics, not professional traders. Compliance by design approach: (1) Category-specific listing forms asking compliance questions: 'Is this item CE marked? Does it meet current EU safety standards?'; (2) AI-powered image analysis detecting products likely subject to regulations (identifying toy listings from images, flagging if no CE mark visible); (3) Random checks of high-value electronics, toys, cosmetics listings; (4) Automated warnings during listing: 'You're selling children's toy - EU requires CE marking, safety testing, age warnings'; (5) Seller education center with plain-language guides: 'Selling Used Electronics? Requirements: WEEE compliance, battery safety, electrical safety standards'; (6) When vintage toy from 1980s listed, system alerts: 'Pre-harmonized product may not meet current safety standards - seller must verify or include disclaimer'; (7) Report mechanism enabling sellers to flag suspicious products to eBay and national authorities; (8) Terms explaining eBay's product restrictions, ranking factors (seller rating, shipping speed, return policy), and promoted listing placements. Balance marketplace openness with safety compliance.
For Etsy (Handmade/Artisan Marketplace): Etsy's focus on handmade goods creates distinct compliance challenges - artisans may not understand industrial product safety regulations. Compliance by design must educate small-scale makers: (1) Category-specific onboarding: 'Selling Handmade Jewelry? EU Requirements: REACH compliance for metals, nickel restrictions, labeling rules...'; (2) Interactive compliance checker: 'What are you selling?' → 'Children's clothing' → 'EU requires: flame resistance testing, drawstring restrictions, small parts safety, fiber composition labeling'; (3) Integration with craft/artisan compliance resources and testing labs; (4) Proactive outreach when regulations change: 'New cosmetic labeling requirements effective January 2024 - update your listings'; (5) Random checks focused on high-risk categories (children's products, cosmetics, electrical items); (6) Seller forum connecting artisans to compliance experts and regulators; (7) When potentially non-compliant item identified (e.g., handmade soap making health claims without certification), provide education opportunity before removal: 'Your listing may violate cosmetic claims regulations - review EU rules and update listing'; (8) Terms explaining Etsy's handmade/vintage/supply categories, search ranking factors (listing quality, shop policies, seller performance), and promoted listing disclosure.
For Vinted (Secondhand Fashion Marketplace): Vinted facilitates peer-to-peer sale of used clothing - different compliance context than new products. Compliance by design approach: (1) Focus on categories where safety rules apply to secondhand items: children's clothing (flame resistance, small parts), cosmetics (prohibited even if used), electronics (electrical safety); (2) Automated detection: listing includes 'baby clothes' → inform seller: 'Children's clothing must meet safety standards even if used - ensure no recalled items, unsafe features'; (3) Integration with EU RAPEX (Rapid Alert System for dangerous products) database - automatically flag recalled items; (4) Education: 'Selling Used Cosmetics? EU prohibits resale of opened cosmetics for hygiene reasons'; (5) Consumer protection transparency: require sellers to disclose condition, defects, authenticity concerns; (6) When dangerous product identified (e.g., recalled children's item, counterfeit electronics), immediate removal with seller education; (7) Simplified compliance for normal clothing (no regulatory requirements), focused enforcement on high-risk categories; (8) Terms explaining Vinted's prohibited items (counterfeit goods, unsafe products, recalled items), ranking by upload time, and no paid placement.
For AliExpress (Cross-Border Marketplace): AliExpress connects Chinese sellers with EU buyers - international dimension complicates compliance. Compliance by design must address: (1) Seller education in multiple languages explaining EU product requirements (often stricter than Chinese standards); (2) Mandatory compliance declarations for regulated categories: 'Selling to EU? Confirm: CE marking, RoHS compliance, safety testing, labeling in local languages'; (3) Import compliance warnings: 'Electrical products require EU voltage compatibility, plug adapters, electromagnetic compatibility'; (4) Random checks of high-risk imports (electronics, toys, cosmetics); (5) Partnership with EU customs and market surveillance authorities sharing compliance data; (6) When non-compliant pattern detected (e.g., Chinese seller listing products with fake CE marks), suspend seller account and report to authorities; (7) Consumer warnings: 'Product ships from China - verify CE marking, safety compliance, import duties'; (8) Terms explaining cross-border restrictions, product prohibitions, ranking factors, and sponsored placements. Navigate tension between marketplace openness and EU consumer protection.