Shopping the Global E-Mall, Round 2

In my last post, I discussed the growing phenomenon of e-commerce sales directly to consumers from foreign (Chinese) manufacturers. My concern is that the regulatory stance of the CPSC—asserting that a foreign manufacturer is legally responsible for compliance with all U.S. safety standards when a U.S. consumer buys a product directly from that manufacturer—is both naïve and unenforceable.

Therefore, I was interested to see the announcement last week from the CPSC that it has entered into a voluntary agreement with Alibaba, the Chinese e-commerce direct sales company, to work with the agency to try to monitor its platforms for dangerous products.  Kudos to the agency for negotiating this agreement, as modest as it is.

According to press reports, Alibaba handles more e-commerce business than Amazon.com and eBay Inc. combined and, as a platform for third parties, it controls as much as 80 per cent of the Chinese e-commerce business.  Obviously, Alibaba can be a potent ally in policing the marketplace for unsafe products.

Looking at the reported details of the agreement, it is not clear whether it will prove to advance consumer safety in the global e-mall or merely serve as a fig leaf to which the parties can point to show they are doing something.  Alibaba has apparently agreed to block sales of up to 15 recalled products upon request from the CPSC.  Since a substantial number of the over-400 recalls the CPSC does each year are of products from China, there should be no problem finding candidates for this list.  All concede that this agreement is not enforceable. It remains to be seen how aggressive Alibaba will be carrying it out over time.

More interesting is the company’s agreement to make available information about safety requirements to importers into the United States.  U.S. safety requirements are not easily understood, especially those issued since 2009 in response to the CPSIA—see the labyrinthine regulations dealing with testing and certification for examples. Any way to get information to those who are honestly trying to comply can do nothing but help.

Whether this agreement is a modest, but effective first step or just another counterfeit product remains to be seen.  Stay tuned.

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