Consumer protection: Shopify commits to new practices to make it safer for consumers buying from web stores on the platform

This article is brought to you in association with the European Commission.

Following dialogues with the Commission and the network of national consumer protection (CPC) authorities, multinational e-commerce business Shopify has committed to making several improvements to make shopping safer for customers, bringing it in line with EU rules. The dialogue first originated following the receipt of numerous complaints, which peaked during the COVID-19 pandemic, through the European Consumer Centres. The complaints mainly related to web stores hosted by the platform, found to have engaged in illegal practices, such as making fake offers and fake scarcity claims, supplying counterfeit goods or not providing their contact details. The Commission, together with the CPC, and led by Belgium’s Directorate General for Economic Inspection, launched a dialogue with Shopify in July 2021, aimed at introducing changes to address the illegal practices of traders in its platform. Shopify has now committed to create a fast and effective ‘notice and action’ procedure for national consumer authorities and to change its templates to push traders to be more transparent towards consumers.

Commissioner for Justice, 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.”

Main commitments:

To address the issue of web shops providing insufficient information about their companies, as well as missing mandatory information on consumer rights, Shopify has committed to:

• Designing its templates for web shops contact pages and generators for Terms and Conditions, Privacy Policies and Refund Policies to include fields for company information and contact details;
• Providing clear guidance to traders on the applicable EU consumer law;
• Providing company details about any EU trader when requested by any national consumer authority.

To address breaches of EU consumer law by web shops notified by national consumer authorities in a faster and more efficient way, Shopify has agreed to take down the concerned web shops, as well as provide the relevant company details. Such breaches could include, for instance, fake scarcity claims, pressure selling, counterfeit goods, or undelivered products, for example.

Moreover, national consumer authorities have also agreed to reinforce their cooperation with the Canadian Competition Bureau against Shopify traders that are not based in the EU/EEA.

Next steps

The Consumer Protection Cooperation Network (CPC) will actively monitor the implementation of these commitments, as well as any further complaints made by consumers.

In addition, actions at national level may be launched to ensure that EU standards are respected and to guarantee that all platforms abide by the same rules.

Background

The Consumer Protection Cooperation (CPC) is a network of authorities responsible for the enforcement of EU consumer protection laws. To tackle cross-border issues, their actions are coordinated at EU level.

National authorities are responsible for the enforcement of EU consumer protection laws. Thanks to the updated Consumer Protection Cooperation Regulation, they now have stronger powers to detect irregularities and take speedy action against rogue traders. Cooperation applies to consumer rules covering various areas such as unfair commercial practices, e-commerce, geo-blocking, package holidays, online selling, and passenger rights.