France to force online retailers to tackle compliance free-riding
The French Government is set to introduce new rules obligating online marketplaces, such as Amazon, to ensure that the collection and recycling of waste arising from products that they market through their sites is properly financed.
The new obligations were announced by Brune Poirson, Secretary of State for Ecological Transition, last Wednesday (16 January) and will require online retailers to prove that all of the products sold through their platforms have had an ‘eco-contribution’ paid on their behalf.
In France, the collection and recycling of the majority of post-consumer wastes, such as packaging and waste electronic and electrical equipment (WEEE), is managed through an extended producer responsibility (EPR) regime. Producers have to finance the management of the waste generated by their products at end of life by paying an ‘eco-contribution’.
For example, for packaging this payment consists of a variable fee based on the weight of the packaging according to material type, added to a flat Consumer Sales Unit (CSU) fee, based on how many units of packaging are in each CSU.
The rise of online shopping and marketplaces such as Amazon poses difficulties for producer responsibility, with many products placed on the market through e-commerce sites avoiding national producer responsibility obligations, a practice known as free-riding.
The issue is particularly salient in regard to WEEE. All producers of electronic and electrical equipment (EEE) in the EU are obligated under the WEEE Directive to declare how much EEE they place on the market, as well as to organise its collection and recycling at the end of life stage, directly or through a compliance scheme.
The issue of free-riding stems from online retailers, domiciled outside of the EU, which sell products directly to households in the EU from producers in places like China that are not registered with WEEE compliance schemes – bypassing national importers and distributors as well as retailers with a physical presence, such as warehouses.
Free-riding puts ‘bricks and mortar’ retailers at a material commercial disadvantage, as they have to bear the costs of compliance while overseas retailers selling through online marketplaces such as Amazon often avoid this. In the UK, it is estimated that around 20 per cent of lamps sold include LED lamps that do not comply with WEEE regulations due to online free-riding.
“It is time we updated the system of extended producer responsibility to keep pace with evolving business models,” Poirson said, adding that Amazon and other online platforms currently “slip through the net” and avoid their responsibilities for compliance “under the pretext that they are only intermediaries”.
Poirson continued: “Now, by default, Amazon will be held responsible if it cannot prove that a business that sells a product on its site makes an ‘eco-contribution’.”
The new obligations for online platforms will be included in the upcoming law on the circular economy, which was presented to the National Council on Ecological Transition last Thursday (17 January) in advance of its presentation to France’s Council of Ministers.