This blog post summarizes the key points presented by Cooley lawyers Claire Temple, James Maton, Andrew Linch and Enrique Gallego Capdevila during the firm’s recent “Online Marketplaces + Ecommerce” webinar, the latest instalment of our“ On the Record: Cooley Litigation Trends Webinar Series,” focused on the UK and European Union (EU).
The regulatory and litigation landscape for online marketplaces and ecommerce platforms in the EU and UK is evolving at a rapid pace. With the introduction of new regulations, increased enforcement and a surge in collective redress actions, the risks and obligations for online marketplaces have never been higher.
Here’s what tech companies, platform operators and ecommerce businesses need to know to stay ahead of the curve.
Safe harbour and intermediary liability: increasing uncertainty
For years, the concept of “safe harbour” has provided a critical shield for online intermediaries and platforms, protecting them from liability for third-party content – provided they remain passive and act expeditiously to remove illegal material once notified. Under the EU’s Ecommerce Directive and now its Digital Services Act, this defense remains but with important caveats.
Particularly exposed are marketplaces that blur the line between passive intermediary and active trader. For example, platforms operating hybrid models – providing warehousing, shipping, customer service or marketing support – are more likely to be deemed to be playing an active role. The more a platform shapes, promotes or influences how third-party goods are listed or perceived, the harder it becomes for them to rely on liability exemptions.
In the UK, the situation is less clear. The Online Safety Act and other post-Brexit regulatory changes have created uncertainty about the continued scope of safe harbor, especially as UK law did not fully implement the EU’s prohibition on general monitoring obligations. As a result, platforms face a growing risk that their activities – especially if they curate, rank or promote listings – could be deemed “active,” eroding the protection that safe harbor once provided.
Product safety: The new GPSR and even newer UK PRAM Act
Product safety is at the forefront of regulatory reform. The EU’s new General Product Safety Regulation (GPSR), in force since December 2024, imposes much stricter obligations on online marketplaces and ecommerce businesses. Key changes include:
- Alignment of obligations for both harmonized (CE-marked) and non-harmonized products.
- Mandatory accident reporting for both sellers and marketplaces.
- New mechanisms for consumers and other parties to report safety issues.
- Specific obligations for online marketplaces, including proactive monitoring, reporting and removal of unsafe products.
- Enhanced consumer remedies in the event of recalls, requiring at least two out of three remedies (refund, replacement, repair) to be offered.
The GPSR also explicitly applies to digital products, including software and apps, meaning that marketplace apps themselves may now fall within the scope of product safety enforcement.
In the UK, the recently enacted Product Regulation and Metrology (PRAM) Act creates new powers for regulators to address emerging risks and technologies, with a clear focus on online marketplaces. While the details will be fleshed out in secondary legislation, businesses should expect new compliance and enforcement measures to arrive very soon.
IP infringement: The expanding scope of platform liability
Intellectual property enforcement remains a core litigation risk for online marketplaces. Historically, platforms could avoid primary liability for trademark infringement by maintaining a passive role. However, recent case law – most notably, the Court of Justice of the European Union decision in Louboutin v. Amazon – has shifted the landscape. In that case, the court introduced a “user perception” test: If a reasonably observant user would believe that the platform itself is marketing the infringing goods, the platform may be directly liable for trademark use. Factors such as uniform presentation of goods, active advertising and the provision of logistics services can all tip the balance from passive to active involvement.
This means that hybrid business models, where platforms both host third-party sellers and sell their own goods, are particularly at risk. Platforms should now take greater care to visually distinguish third-party products, use clear disclaimers and avoid promotional tags that could blur the line between their own offerings and those of third parties.
Consumer protection and unfair commercial practices: A new enforcement era
Consumer protection law is seeing a resurgence, especially in the UK. The Digital Markets, Competition and Consumers Act introduces new rules on unfair commercial practices, including fake reviews, subscription contracts and “dark patterns” in online choice architecture. The Competition and Markets Authority (CMA) now has direct enforcement powers, including the ability to levy fines of up to 10% of global turnover and issue personal fines for accessories to infringements.
The CMA’s enforcement priorities include aggressive sales tactics, hidden fees, unfair contract terms and practices that prey on vulnerable consumers. Online marketplaces are firmly in the crosshairs, with the regulator focusing on who is best placed to remedy consumer harm – often the platform itself rather than individual sellers.
Collective redress and class actions: The rise of mass claims
The EU’s Collective Redress Directive has ushered in a new era of class actions, enabling qualified entities to bring cross-border claims on behalf of consumers. This dramatically increases the litigation risk for online marketplaces, as consumer organizations and litigation funders are now empowered to pursue mass claims for breaches of consumer protection, product safety and data privacy laws.
The threshold for bringing claims is lower, and the risk of forum shopping is real. Platforms operating across multiple EU jurisdictions must be prepared for coordinated, large-scale litigation.
Key takeaways for online marketplaces and ecommerce businesses
- Safe harbor is no longer a blanket shield. The more active a platform’s role, the greater the risk of liability.
- Product safety obligations are expanding. Both physical and digital products, including apps, are now in scope.
- IP enforcement is intensifying. User perception and platform involvement are critical factors in determining liability.
- Consumer protection enforcement is ramping up. Regulators have new powers and are targeting online marketplaces.
- Class actions are on the rise. Collective redress mechanisms mean mass claims are now a real threat.
The message is clear: Online marketplaces and ecommerce platforms must take a proactive, holistic approach to compliance, risk management and litigation strategy. The regulatory environment is only getting more complex – and the stakes have never been higher.
For more information or to discuss how these developments may affect your platform, please reach out to Claire Temple, James Maton, Andrew Linch or Enrique Gallego Capdevila.
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