Cow can the European Union crack down on the scourge of Chinese e-commerce. Shein, Temu, Aliexpress… On the Old Continent, these booming platforms sell mass consumer products of all kinds by the millions at unbeatable prices. And, most often, without respecting European standards. This would be the case for 70% of goods imported into Europe via online commerce platforms, according to estimates by the European Commission.
A phenomenon which, as Christmas approaches, is all the less reassuring. The number of dangerous goods reported by customs has thus doubled in 2023 – led by toys, cosmetic products, electrical appliances and clothing – leading to unfair competition for European players, such as Ikea, H&M, Zalando, Decathlon… Not to mention local shops.
But what can the EU do? The most obvious answer was in fact already in the pipeline: it would involve removing the exemption from customs fees enjoyed by packages below 150 euros, which means most of these products are exempt from border controls. At the end of September, ten Member States of the Union, including France and Germany, called in a letter on the European Commission to adopt a hard line in the face of “the risks of harm to consumers and unfair competition”.
Customs overwhelmed
And since then? Beneficial on paper, this idea poses a series of problems in practice. Because the new customs duties would also target European resellers importing their products from abroad. The Eurocommerce organization, representing the retail and wholesale trade sector in Europe, is thus divided.
Furthermore, removing this exemption would likely overburden already overwhelmed customs services. Amsterdam Schiphol Airport and the Port of Rotterdam together process 3.5 million packages per day, or 40 per second. However, last year, 2.3 billion items below the duty-free threshold of 150 euros were imported into the EU, according to the Commission. Carrying out that many checks would seem like a Herculean task.
A sign that the idea is not so consensual among the 27, the EU executive has started to work on alternatives. Two measures are thus under study, according to the “Financial Times”: the introduction of additional administrative costs on the handling of the goods in question, or a new tax on the income of e-commerce companies.
However, these two avenues also present their share of problems. On the one hand, they would each hit European players. Eurocommerce further objects that administrative costs would potentially contravene international trade rules. As for the new income tax, its implementation would require unanimous agreement of EU member states.
Digital Services
In the absence of a miracle solution, the most promising solution for the EU seems to be to attack Chinese platforms via European regulation on digital services, the famous DSA (Digital Services Act). The Commission has already launched, on October 31, an investigation against Temu, whose commercial practices are “strongly suspected” of being in violation of the said regulation.
The latter requires large online platforms to set up a system to guarantee consumers that the products sold meet standards. This is obviously not the case for the Chinese company which, if it did not correct the situation, would face a massive fine – equivalent to a maximum of 6% of its global turnover.
The “addictive” characteristics of the site and the application, which are very fun, are also likely to contravene the DSA. Just like the product recommendation algorithm based on user tracking from which it is impossible to escape.
