The UK’s ‘Digital Wild West’ Puts UK Consumers At Risk
The digital wild west of modern e-commerce is putting UK consumers at risk and making it easier for underage users to access adult-only products. Haypp is calling for updated regulations to close loopholes and hold online sellers accountable.
Key Takeaways
- New models of e-commerce bring new risks as well as opportunities for UK consumers.
- Increasing numbers of products on the market do not meet UK safety standards.
- Unregulated online marketplaces let young people access adult-only products, including nicotine products.
- The UK government has held consultations as part of a process to develop stronger rules for unregulated online retailers.
- Haypp Group welcomes the initiative and is calling for a robust regulatory shift to tackle a growing “digital wild west”.
New Regulation Needed for New Business Models
The government’s recent public consultations come at a critical moment. The rules and regulations for online sales have not kept pace with the changes and innovations in e-commerce.
The existing rules were designed for a retail sector that was primarily brick and mortar stores or uncomplicated online sales. New rules are needed for an evolving e-commerce environment.
However, the rise of new models of e-commerce has transformed the market, bringing new risks as well as opportunities for UK consumers.
Drop-shipping, influencer sales, and online marketplaces are not fully covered by existing legislation leaving many loopholes that are exploited by unscrupulous retailers.
Growing Risks to Consumers
This has led to many incidents over recent years of dangerous products entering the market, or young people being able to purchase adult-only products. UK investigations have repeatedly uncovered unsafe and non-compliant products being sold through online marketplaces, particularly by third-party sellers.
These have included toys, electrical goods and baby products that failed to meet UK safety standards, exposing consumers to serious risks.
Many online sellers operate with very little oversight of their supply chains, making it difficult to guarantee product quality, safety and regulatory compliance.
The retailers may not know where the products are manufactured, what ingredients or components are used, or whether they meet UK regulatory requirements. Some retailers do not even have a base in the UK.
Accountability and a Level-Playing Field
The government should introduce stronger rules to make sure online marketplaces, third-party sellers, and overseas operators are held accountable for the products they put on the UK market.
The new rules should have consistent standards for product safety, age verification and supply-chain transparency, to create a level playing field for responsible retailers while providing greater protection for consumers.
Dr Marina Murphy, Senior Director of Scientific Affairs at Haypp Group, said:
"The government's consultations are a rare opportunity to modernise regulations for today's retail environment.
Consumers should be able to trust that products sold through an online marketplace or by a social media influencer meet the same standards of safety and compliance as those sold through any other regulated retail channels.
The biggest threat to responsible businesses is not more regulation, but irresponsible operators who exploit gaps in oversight and accountability.
Whether a retailer is selling products made locally or sourced through a complex international supply chain, they must be able to ensure that the products they are selling meet UK standards. Online marketplaces or drop-shippers must not get a free pass on this."
Regulated Online Channels Set The Standard
Data from Haypp’s Nicotine Pouch Report demonstrates that legitimate online channels are already setting the standard for youth protection.
The report highlights that structured digital age-verification systems, which are increasingly automated, successfully verify 94% of online consumers, a significant contrast to the physical retail sector, where only 38% of consumers report being asked to verify their age.
Dr Murphy added:
"Existing regulations have struggled to keep pace with the growth of cross-border e-commerce and increasingly complex supply chains. If a business profits from selling products to UK consumers, it should be accountable for ensuring those products are safe, compliant and sold responsibly."
Strengthen Consumer Protection, Support Responsible Retailers
Authorities in other countries are taking action, with Shopify in the USA no longer selling vapes on their platform as a result of pressure from US regulators.
Haypp Group believes the consultation represents an important opportunity to strengthen consumer protection while supporting responsible retailers that are already investing in compliance, product safety and robust age-verification measures.
