European Commission secures higher levels of protection for European consumers shopping on Shopify-based webshops
After an 18-month dialogue between the European Commission and its EU Consumer Protection Cooperation (CPC) Network with Shopify, the webshop-building and -hosting platform, an agreement was secured aimed at improving safety for EU consumers buying from web stores on the platform.
The dialogue was initiated by European Union consumer protection authorities following receipt of numerous cross-border complaints, particularly during the COVID-19 pandemic years of 2020 and 2021, by all the European Consumer Centres across the European Union and the European Economic Area.
The global e-commerce platform Shopify now has committed to extensive improvements in order to make shopping safer for customers of the webshops hosted on its platform, bringing it in line with EU consumer protection rules.
Over the first two pandemic years when online shopping increased multifold across the European Union, many new webstores were created in response to the increased demand, particularly as supply chains were disrupted across the continent and beyond. The increased rate of e-commerce trade also generated more complaints from EU consumers, particularly in relation to illegal practices by some of the traders operating online shops on the Shopify platform (among others). Based on the consumer complaints received by the European Consumer Centres (ECC) Network’s offices, many webshops on the Shopify platform were found to operate straightforward scams, others supplied counterfeit goods, some failed to deliver orders and many failed to supply contact details of any kind.
To tackle this problem at source, the European Commission, in conjunction with the offices of the CPC Network, initiated a dialogue with the webshop platform in July 2021. Shopify has agreed to address and monitor illegal practices by traders operating web stores on its platform, by responding quickly to notifications about problem traders, and making its trader registration more comprehensive and transparent.
As a result of the dialogue, Shopify has committed to the following:
- Redesign its webshop templates to make pages for contact details, Terms and Conditions, Privacy Policies and Refund Policies mandatory;
- Provide clear guidance to web traders on EU consumer law applicable to their e-commerce trade operations within the EU and EEA;
- Supply the registered company details of any EU trader on request by any national consumer authority in the EU Member States;
- Remove web shops reported by national consumer authorities and supply their details for further investigation.
The CPC Network, comprising national consumer protection enforcement authorities in all EU Members States and countries of the EEA, will actively monitor the implementation of these commitments, as well as any further complaints made by consumers.
As many other global technology companies, Shopify has an operations base in Ireland. Even though Shopify is headquartered in Canada, according to its EU- and EMEA-applicable Terms of Service (article 3(a-b)), if the trader’s billing address is in Europe or selected countries of the EMEA region (from list at shopify.com/legal/country-list), then the “Shopify Contracting Party” in the B2B relationship will be ‘Shopify International Limited’, a private company limited by shares, incorporated in Ireland and subject to the jurisdiction of the Irish courts.
The ECC Network, including the European Consumer Centre Ireland, is the first point of call for consumers with disputes and complaints against traders based in another EU or EEA country. During the first COVID-19 pandemic years, when online shopping surpassed in-person shopping in most countries, complaints generated by cross-border online shopping within and outside the EU, from both big brands as well as small traders operating through platform-hosted webshops (including Shopify but not only), led to a surge in case volumes across all of its offices. The European Consumer Centre Ireland was involved in resolving disputes between Irish consumers awaiting resolution from web companies based in the EU and, vice versa, assisted many EU consumers with complaints against Ireland-based webshops.
Due to a scarcity of many products during extended periods of the pandemic, many EU consumers shopped online outside the EU and the EEA also – complaints following disputes with non-EU traders are unfortunately not within the remit of European Consumer Centres or national consumer authorities, such as the Competition and Consumer Protection Commission in Ireland.
European Commissioner for Justice and Consumers, Didier Reynders said,
“Almost 75% of internet users in the EU are shopping online. This is a huge market for scammers and rogue traders to exploit, and they will continue to do so unless we act. We welcome Shopify’s commitment to ensure that traders operating on its platform are aware of their responsibilities under EU law, and are taken down if they break the rules.”
The European Consumer Centre Ireland said,
“The European Consumer Centre Ireland is optimistic that the result of the EU dialogue and the commitments made by Shopify will pre-empt a lot of relevant complaints and make online shopping safer and transparent in the EU going forward. Irish and European consumers should be confident when shopping online within the EU/EEA space at all times; however, caution and common sense is advisable at all times.”
For consumer advice on how to shop online safely, head over to the ‘Online Shopping’ section of their website: eccireland.ie.
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