Securing Europe’s Digital Marketplace: The EU’s Comprehensive Response to E-commerce Challenges

The European Union faces an unprecedented challenge in regulating the rapidly expanding e-commerce landscape, where 4.6 billion low-value consignments entered the EU market in 2024 alone—equivalent to 12 million parcels daily and nearly double the volume from 2023.[1] This staggering growth has exposed critical gaps in consumer protection, product safety, and fair competition within Europe’s digital marketplace. The European Commission has previously voiced concern about these gaps in its communication from February 2025, which presented a comprehensive EU toolbox to tackle the issues.[2] The European Parliament’s adopted a resolution on 9 July, 2025 on Product safety and regulatory compliance in e-commerce and non-EU imports[3] [4], providing a complete roadmap for addressing these challenges while maintaining the delicate balance between innovation and consumer protection.

The Scale of the Challenge

The magnitude of e-commerce growth in the EU represents both an opportunity and a significant regulatory challenge. According to the European Commission, 91% of all e-commerce shipments valued up to €150 entering the EU came from China in 2024.[5] This massive influx of low-value imports, while benefiting consumers through lower prices and greater choice, has created substantial concerns about product safety, unfair competition, and environmental impact.

The Letta Report on the future of the Single Market highlighted that EU consumers waste EUR 19.3 billion per year buying dangerous products that can lead to injuries and are detrimental to European economies.[6] This alarming statistic underscores the urgent need for comprehensive regulatory reform to protect both consumers and legitimate businesses operating within the EU framework.

Digital Services Act: The Foundation of Online Governance

The Digital Services Act (DSA)[7] represents the EU’s most significant attempt to govern the digital sphere, establishing comprehensive rules for online platforms and marketplaces. Since its full implementation in February 2024, the DSA has imposed stringent obligations on platforms, particularly Very Large Online Platforms (VLOPs) and Very Large Online Search Engines (VLOSEs) that serve more than 45 million users.

The Commission has already begun intensive enforcement actions under the DSA, opening formal investigations into major platforms including TikTok[8] and X[9] (formerly Twitter). The TikTok investigation, launched in February 2024, focuses on protection of minors, advertising transparency, data access for researchers, and risk management of addictive design and harmful content. Similarly, the X investigation addresses concerns about content moderation, disinformation control, and algorithmic transparency. However, enforcement at the national level remains limited due to delayed implementation by Member States.

Product Safety: The GPSR Revolution

The General Product Safety Regulation (GPSR)[10], which came into force on December 13, 2024, marks a major shift in the European Union’s approach to product safety. Replacing the outdated General Product Safety Directive from 2001, the GPSR tackles modern challenges such as e-commerce, complex global supply chains, and rapid technological developments.

Under the new regulation, all consumer products must undergo thorough risk assessments throughout their entire lifecycle, taking into account foreseeable usage patterns and potential hazards. Products sold online are now required to display detailed manufacturer information, including the full company name, contact details, and clear product identification to strengthen traceability. The GPSR also expands its scope to cover online marketplaces and fulfilment service providers, making them accountable for the safety of the products they handle. Additionally, the regulation introduces improved recall procedures, requiring companies to notify consumers directly about product recalls and to register them through the Safety Gate portal.

Market Surveillance: Addressing Enforcement Gaps

The Market Surveillance Regulation (MSR)[11], which came fully into force in July 2021, was designed to tackle the unique challenges posed by e-commerce. Under this regulation, all non-EU manufacturers must have an economic operator established within the EU to ensure compliance with safety standards.

Despite these requirements, the European Parliament’s draft report and consequent resolution highlights significant gaps in enforcement. Many market surveillance authorities face severe resource constraints and struggle to inspect the overwhelming volume of small parcels flowing into the EU. A lack of harmonized technological tools across Member States further complicates coordinated enforcement, while inadequate data sharing between customs authorities, online platforms, and market surveillance bodies creates blind spots that undermine safety efforts.

The Safety Gate system[12], which replaced the RAPEX alert system, illustrates both the promise and the challenges of the current framework. In 2023 alone, it recorded more than 3,400 alerts about dangerous non-food products, playing a vital role in information sharing between Member States. However, its effectiveness depends heavily on timely reporting and swift action by national authorities to remove unsafe products from the market.

Customs Reform: The Deemed Importer Concept

The proposed reform of the Union Customs Code introduces the groundbreaking concept of the “deemed importer,” fundamentally transforming how e-commerce imports are regulated within the EU. Under this system, online platforms authorized to use the Import One-Stop Shop (IOSS) would take on full responsibility for customs formalities and compliance obligations.

The deemed importer concept aims to tackle several persistent issues in cross-border e-commerce. By making platforms directly responsible for customs duties and regulatory compliance, the reform levels the playing field and removes the unfair advantage that non-EU sellers often have over EU-based businesses. Another major change is the proposal to scrap the current €150 threshold that exempts low-value goods from customs duties — a loophole that has enabled huge volumes of imports to enter the EU duty-free. In addition, platforms would be obliged to submit detailed product information to customs authorities within one day of a sale, giving officials better data to carry out risk assessments and target non-compliant shipments more effectively.

Digital Product Passports: Transparency Through Technology

The Digital Product Passport (DPP)[13], introduced under the Ecodesign for Sustainable Products Regulation (ESPR)[14], represents a major step forward in promoting transparency and sustainability throughout the entire product lifecycle. By providing comprehensive data accessible via QR codes, NFC chips, or RFID tags, the DPP will give stakeholders — from regulators to consumers — instant access to critical information about a product’s origins, composition, and environmental impact.

The European Parliament’s draft report and consequent resolution highlights the urgent need to implement the DPP, especially for textiles and other high-risk products sold through e-commerce channels. With this system in place, customs authorities would be able to screen products for compliance before they enter the EU market, helping to keep non-compliant or unsafe goods out. Consumers, in turn, would gain access to detailed sustainability and safety information, empowering them to make more informed and responsible purchasing decisions. By enabling full traceability from raw materials to end-of-life disposal, the DPP also strengthens supply chain transparency and supports the EU’s broader circular economy goals.

Consumer Protection: Strengthening the CPC Framework

The Consumer Protection Cooperation (CPC) Regulation[15] sets out the framework for enforcing consumer protection laws across borders within the EU. However, the European Parliament’s draft report and consequent resolution points to significant shortcomings, particularly when it comes to tackling non-EU traders and online platforms that operate without any meaningful presence in the Union.

The Commission’s review[16], published in November 2024, highlighted several persistent challenges. Penalties remain largely ineffective against businesses with no assets or representation in the EU, making enforcement against non-EU traders practically impossible in many cases. Additionally, the consensus-based decision-making process under the CPC Regulation often delays urgent enforcement actions, while national authorities continue to struggle with limited resources to address the growing number of cross-border infringements.

In response to these gaps, consumer protection organizations are calling for stronger powers at the EU level, including giving the Commission the authority to impose fines directly and to launch coordinated actions against large-scale violations. Such measures could help ensure that consumer rights are upheld more effectively, regardless of where traders are based.

Enforcement Challenges and Solutions

The European Parliament’s draft report and consequent resolution sets out a robust strategy to close enforcement gaps and strengthen the EU’s product safety and consumer protection framework. In the near term, it calls for immediate actions such as increased funding for market surveillance and customs authorities, stronger cooperation between Member States, and expanded testing facilities to detect high-risk goods before they reach consumers.

Regulatory updates are also a key part of the plan. The resolution urges the swift adoption of the customs reform package, the creation of an EU Customs Authority to streamline oversight, and mandatory use of the Import One-Stop Shop (IOSS) regime for online marketplaces to boost accountability for cross-border sales.

To match the complexity of modern trade, the Parliament stresses the need for advanced technological tools — including AI-powered screening, better database integration, and automated risk assessment systems — to identify non-compliant products more effectively.

The resolution further underscores the value of international cooperation. Providing training for non-EU partners on EU safety rules and coordinating action against unfair practices like dumping and illegal subsidies are seen as vital for ensuring a fair and secure marketplace.

Given the recent developments seemingly pointing towards a possible centralization in EU consumer protection, it should be explicitly stated that shifting further competences to the EU level risks generating additional administrative overhead and diluting Member States’ ability to address domestic consumer protection priorities effectively. Rather than adopting a centralized enforcement model, such as the ones in the DMA and DSA, it would be preferable to adopt a parallel enforcement model, analogous to the framework under Regulation 1/2003 for competition law, based on a ‘primus inter pares’ logic to ensure both efficiency and subsidiarity.

The Path Forward

This broad approach to regulating e-commerce is an important move toward a safer, fairer, and more competitive digital market. Yet its success will depend on how well these measures are put into practice.

Prompt implementation is essential, especially customs reform — from abolishing the €150 threshold to establishing a central EU Customs Authority to manage goods more efficiently. Equally critical is coordinated enforcement. Closer collaboration among customs, market surveillance, and consumer protection agencies will help close loopholes and block unsafe or non-compliant items from entering the EU.

Innovation will also be decisive. Investments in AI, blockchain, and advanced risk analysis will help manage the volume and complexity of online trade. At the same time, sustained engagement with major trading partners like China will help ensure that rules are respected globally, and competition remains fair.

The EU’s response to the challenges of digital commerce is a careful balancing act: protecting consumers and businesses while safeguarding open trade and technological progress. The proposed framework is ambitious, but its impact will hinge on balanced, practical enforcement and steady follow-through.

As the Parliament moves toward final adoption, the stakes are high. Europe’s next steps will not only shape its own digital market but could set a global standard for fair and forward-looking digital governance. The coming months will show whether the EU can meet this challenge and build an online economy that works for all its citizens.

[1] https://commission.europa.eu/news-and-media/news/tackling-challenges-e-commerce-imports-2025-02-05_en

[2] https://ceuli.com/a-breakdown-of-the-eus-new-e-commerce-regulation-strategy/#_ftn1

[3] https://www.europarl.europa.eu/meetdocs/2024_2029/plmrep/COMMITTEES/IMCO/PR/2025/06-25/1314587EN.pdf

[4] https://www.europarl.europa.eu/doceo/document/TA-10-2025-0154_EN.html#def_1_1

[5] https://www.europarl.europa.eu/topics/en/article/20250708STO29516/eu-targets-low-value-imports-via-e-commerce-platforms

[6] https://www.consilium.europa.eu/media/ny3j24sm/much-more-than-a-market-report-by-enrico-letta.pdf

[7] https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A32022R2065

[8] https://ec.europa.eu/commission/presscorner/detail/en/ip_24_926

[9] https://ec.europa.eu/commission/presscorner/detail/en/ip_23_6709

[10] https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv%3AOJ.L_.2023.135.01.0001.01.ENG&toc=OJ%3AL%3A2023%3A135%3ATOC

[11] https://eur-lex.europa.eu/eli/reg/2019/1020/oj/eng

[12] https://ec.europa.eu/safety-gate/#/screen/home