The European Union is set to introduce sweeping reforms that would make major e-commerce platforms like Temu, Shein and Amazon Marketplace legally liable for dangerous or illegal products sold through their sites, particularly targeting the surge in imports from China.

According to a draft proposal seen by the Financial Times, the reforms would shift responsibility for imported goods from individual customers to the platforms themselves, requiring online retailers to handle duties, VAT collection and ensure compliance with EU regulations.

The move comes as the EU grapples with a dramatic increase in lower-value parcels, which reached 4.6 billion in 2024 - four times higher than 2022 levels. Over 90 per cent of these shipments originated from China, placing what the draft describes as an "unsustainable strain on the authorities."

"The surging volume of products that are unsafe, counterfeit or otherwise non-compliant leads to serious safety and health risks for consumers, has an unsustainable impact on the environment, and fuels unfair competition for legitimate businesses," the proposal states.

The reforms include establishing a new central EU customs authority (EUCA) that would pool customs data from all 27 member states. This body would have the power to screen goods and identify risks before they even arrive in the EU.

The financial impact of counterfeiting on European industries is substantial, with the clothing sector losing nearly €12 billion annually (5 per cent of revenue), cosmetics losing €3bn (5 per cent of sales), and the toy industry suffering €1 billion in losses (almost 9 per cent of sales).

Major platforms have previously defended their practices, with Amazon stating it has proactive measures to prevent unsafe products from being listed, while Temu has expressed support for consumer-beneficial policy changes.

The proposal is scheduled for publication on February 5, though the draft could still undergo changes before then.

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