A new report from the U.K.’s Chartered Trading Standards Institute (CTSI) calls on the government to reform online selling laws and introduce a windfall tax on marketplaces to improve consumer protection.

Founded in 1881, the CTSI is a not-for-profit membership organization. Its report alleges that U.K. consumers are being put at risk by dangerous products sold by third-party sellers on online marketplaces and highlights that laws designed for physical stores are obsolete in the digital age.

Entitled “Mind the Gap Between the Chain and the Platform,” the measures recommended by the report include:

  • A windfall tax or levy on online marketplaces to fund and support consumer protection regulation and enforcement by local authority trading standards services
  • Legal responsibilities for online marketplaces and other websites in line with the Online Safety Act 2023
  • Making online marketplaces responsible for the legal compliance of products sold by third-party sellers on their sites
  • The expansion of the legal definition of an ‘economic operator’ to include online marketplaces and fulfillment houses

According to the CTSI, the report was informed by the work the All-Party Parliamentary Group on consumer protection, which includes business and consumer protection experts.

The report highlighted evidence from a 2022 study conducted by the British Toy and Hobby Association, which found that all 40 toys it purchased online at random from third-party sellers on four marketplaces were illegal to sell in the U.K.

According to the CTSI, a lack of clarity in existing legislation, combined with low funding for enforcement, is allowing online marketplaces to evade their responsibilities because there are “no legal obligation to ensure products supplied by third-party sellers through their platforms comply with legal requirements and are safe.”

A recent survey conducted by delivery company Yodel found that over half (54%) of U.K. shoppers aged 16+ were reselling items on online marketplaces, generating £7.0 billion ($8.9 billion U.S.) a year in sales. It estimated that there were 29.5 million “microsellers” in the country, earning an average of £246 a year through such sales.

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