B2C marketplace regulation: what changes are coming?

According to the FEVAD, there will be more than 240 marketplaces in France by 2021, which is constantly rising due to new buyers and new consumer habits. Faced with such a boom, the legislator regulates their creation and obligations each year. Here is an update on the latest regulations to be aware of.

AGEC Act: Towards the end of non-food waste for B2C marketplaces

The numerous scandals surrounding major luxury brands that destroyed millions of euros worth of unsold products rather than selling them off were enough to push the public authorities to legislate on the subject. From January the 1st, 2022, the law passed on February the 10th, 2020, for the fight against waste and a more circular economy (AGEC) prohibits companies from destroying their unsold products and obliges them to re-use, re-purpose or recycle them. This is THE topic of the year. These measures had already become part of the habits of food companies since the Garot law of February the 11th, 2016. The sectors distributing non-food products (textiles, cosmetics, technology) have naturally followed suit.

Marketplaces are now required to undertake a series of measures to comply with the current legal provisions. They will have to adapt their product sheets and terms and conditions to the new rules in practice. In addition, these platforms will be subject to extended producer responsibility. They will have to pay an eco-participation fee for collecting and treating waste. The marketplace will also be responsible for taking back the product sold free of charge at delivery. On the sellers’ side, they will have to provide their unique identifier (IDU). They prove that they have registered with an eco-organisation managing the collection and processing of used products.

P2B Regulation: Strengthening transparency for consumers

Through its Directive 2019/2161 of November the 27th, 2019, the European Union has endeavoured to regulate the practices of marketplaces to guarantee absolute consumer protection. In France, it has been transposed by Order 2021/1734 of December the 22nd, 2021, which will come into force on May the 28th, 2022. In fact, this new regulation follows the logic of the P2B regulation, which regulates the relationship between the online platform operator and the merchants selling on the marketplace.

First, the ordinance completes the Consumer Code by including three new definitions.

• Online marketplace: this is “a service using software, including a website, part of a website or an application, operated by or on behalf of a trader, which enables consumers to conclude contracts at a distance with other traders or consumers”.
• Online marketplace operator: the definition covers “any professional who provides an online marketplace to consumers, within the meaning of 2° of the I of Article L. 111-7”.
• Commercial practice: the definition covers “any commercial action, omission, conduct, approach or communication, including advertising and marketing, by a trader directly related to the promotion, sale or supply of goods, services, or relating to rights and obligations.

It then tackles the information that should appear on the marketplace (home page, product pages in particular). The consumer must know:

• Whether the seller is a professional or not.
• What are the parameters for ranking the products after a keyword search?
• If the product reviews have been given by other consumers who have tested it. In this case, the marketplace must guarantee the veracity of the reviews.

Finally, the ordinance strengthens consumer protection by completing the list of misleading commercial practices in Article L121-4 of the Consumer Code:

• Distribute or cause to be distributed false opinions or modify consumer opinions.
• Asserting the veracity of opinions without having taken the necessary guarantees to really do so.
• Reselling tickets for events where the seller has used an automated means to circumvent the limit on the number of tickets purchased.
• Providing search results without informing the consumer that a third party has made a payment to obtain a higher ranking (sponsored products).

B2C marketplaces that contravene these new provisions could be fined up to €15,000 for natural and €75,000 for legal persons. If the infringements are found to be Europe-wide, the fine rises to €300,000 (or 4% of turnover).

Therefore, it is recommended that B2C marketplaces carry out an audit of their site!

Digital Services Act: tightening up on traceability of marketplace products

“Everything allowed offline must be allowed online, and everything forbidden offline must be forbidden online“. For Thierry Breton, European Commissioner for the Internal Market, the primary objective of the Digital Services Act is to organise a safer digital space. Illegal content, misinformation, the protection of users’ rights and the fight against online counterfeiting will be in the sights of the European Commission, which intends to tighten the screws on GAFAM. The measures in the DSA complement those in the Digital Market Act (DMA), which regulates the abuse of dominant positions by the major platforms. It highlights transparency on the internet and, more particularly, on marketplaces: any illegal content or product must be reported by “trusted whistle-blowers”, including public authorities and manufacturers. Marketplaces will be required to remove products that contravene the DSA and check sellers’ identities to trace the origin of illegal products. Large platforms will have to carry out independent audits to ensure compliance with the DSA obligations. Failure to comply will result in a fine of up to 6% of global turnover.

Currently being finalised, the DSA is expected to come into force during 2023.

PSD2: 3DS-v2 authentication protocol migration completed

The secure authentication of online payments is reinforced by the PSD2 regulation in its new iteration of the 3D-Secure protocol, mandatory since May the 15th, 2021. However, the European Banking Authority has announced the end of the migration of the 3DS-v2 protocol to October 2022 to ensure a smoother transition with 3DS-v1. As a reminder, the 3DS-v2 protocol aims to make Strong Customer Authentication mandatory for all online payments except those below €30 and those where the fraud rate of the acquiring or issuing bank does not exceed the thresholds imposed by PSD2. Payment service providers handling transactions on behalf of their marketplace customers must comply with the protocol, ensuring that they increase the security of payments without degrading the user experience.

Since its implementation, Lemonway, a licensed payment service provider, has worked with its customers to ensure the transition from the old iteration without impacting the frictionless transaction rate.

More globally, Lemonway will help you create your B2C marketplace by taking care of implementing your payment solution and advising you on the regulations to be respected. Tell us about your project!