The rules of product safety on an Australian e-commerce marketplace are there to shield platforms, sellers and shoppers from unsafe merchandise, spurious claims and the expense of a recall. Under the Australian Consumer Law (ACL) all online sales fall within its purview in this country, be the seller a major marketplace, a home operator, a dropshipper or one from overseas.
We have put together this guide to set out the principal requirements Australia places on those who run a platform or sell on one. You will find information on mandatory standards, what is banned, how to handle recalls and verify sellers, as well as the importer’s role and the way to go about taking off a dangerous product. I am Thomas Ashbury; my method is to take the legal route with a product before it goes on the track. One is better off doing that than having to retrace one’s steps in time.
Australian Safety Laws: Who is bound by them?
Any business in Australia that makes, puts on the market, advertises, imports or distributes consumer goods has to abide by product safety laws. The fact that the sale is concluded via a website, an app or an overseas checkout is no excuse to shirk these duties. These duties form part of the legal requirements for Australian e-commerce.
Compliance can rest with the party offering the goods. And while a marketplace might have its own obligations contingent on its level of control and knowledge of the sale, do not think that being “only a platform” is some sort of legal talisman. Mozzies are more dependable.
Manufacturers and Importers
It is up to the manufacturer to see that goods are in keeping with any bans and the applicable safety standards. For importers the risk is considerable since the consumer or regulator in Australia will turn to the importer if getting in touch with the foreign manufacturer is problematic.
An importer has responsibilities that extend to verifying the design, testing, electrical approvals, age recommendations, warning labels and the like, as well as having records of provenance. Do not put too much stock in a supplier’s “compliant” box; the documents behind it are what count.
Sellers and Dropshippers
Under the ACL a seller must put forward goods that are safe and in accordance with their description and the consumer guarantees. There is to be no misleading as to performance, materials, certification or safety.
With dropshipping one may never have the product in hand but that is no reason to be in the dark about it or to be remiss in checking the supplier and dealing with a complaint or incident. Should a customer come to harm, you will not make matters right by saying the warehouse is in another country.
Duties under the Australian Consumer Law
The ACL is the national framework for enforcement, product safety and the curbing of unfair trading. It is in force for much of what is sold to Australian consumers, online marketplaces included. Sellers would do well to comprehend these duties so as to head off trouble. Dealing with a matter with a refund or replacement is preferable to letting a minor grievance draw the attention of a regulator.
On the subject of consumer guarantees
Goods must be durable, of a quality that is acceptable and fit for the purpose put forward by the seller. They have to correspond with the sample or model shown and the description. These are statutory rights, not to be confused with a store’s own warranty. No amount of “no refunds” on a page or in a marketplace’s terms and conditions will negate the ACL.
Accuracy in your claims
A buyer should be able to get the necessary information from a product page before making a purchase. Put “non-toxic”, “child-safe” or “tested to Australian standards” only where the evidence is there to back it up. Be judicious with safety claims; a lab report on one model is not tantamount to compliance for every batch, colour or subsequent version. Have the evidence for the product and supplier in question.
Bans, Standards and Labelling
Before supply, certain products must conform to the standards Australia makes mandatory, while others are off limits altogether or in some circumstances restricted. This is true of toys, children’s items, cosmetics, electricals and anything with small parts or hazardous content.
What is required in the way of construction, packaging, instructions and labelling will be dictated by the product. A blanket safety statement will not suffice.
Standards are specific to the product
In listing an item the seller needs to know the category. Consider the claims, the size, the power source, what it is made of and who will be using it. There will be different requirements put on a product aimed at children than on a comparable one for the adult market.
And do not be under the impression that an overseas test report, a CE mark or some declaration from the supplier is enough to meet Australian rules. While such evidence can be of use, it is up to the business to see if it in fact conforms to what is required here.
Warning Labels in Context
The likely buyer must be able to read and make sense of warning labels; they have to be plain and accurate. An online listing should not relegate a pertinent warning to a photo that is indecipherable on a mobile device.
Where applicable, instructions are to cover safe disposal, charging, cleaning, assembly and use. Should there be a foreseeable risk with the product, the warning has to spell out the risk and what is to be done about it. “Use responsibly” does not constitute a safety system.
Responsibilities of the Marketplace Platform
What a platform is obliged to do in the way of product safety is a function of its part in the transaction. Even a host of listings can be exposed to risk through unresponsive handling of a hazard, lax controls over sellers, unsafe stock or content that is misleading.
One would be well advised to regard product safety as something of an operational concern and not just a clause in the seller agreement. The platform ought to be in a position to know how fast a listing can be put to a stop, and who and what is being sold.
Getting to Know the Seller and Product
Verification of a seller should yield some useful data: legal and tax details, location, contact and business information, proof of any necessary approvals or licences. You would apply more rigour in your checks for high-risk goods than for a run of the mill household article.
Traceability is also to be maintained by the platform. Be it batch numbers, product identifiers, dates of listing or the like, having records of the supplier and customer makes for a quicker and more focused recall.
Claims and Listings Under Control
A marketplace may have to limit repeat offenders, review complaints and screen listings, and set down rules for products that are off limits. There is no substitute for a human eye when it comes to serious hazards, even if automated tools can flag risky terms.
Make reporting of unsafe goods a simple matter for staff, the seller and the customer. A report is to be followed by a documented assessment with an owner and a deadline for a response. Relying on hope is no control measure, cost free though it is.
Some Practical Checks for the Seller
Product checks need not be onerous but they should be consistent. A brief pre-listing routine will reveal any absent warnings or opaque supplier arrangements before the item is in the hands of a customer. In my experience when reviewing a product information process, the chasm between what a business thinks it has checked and what it can put forward as proof is where one gets caught, more so than by the rule.
Reality and Expectation
It is expected the supplier has taken care of compliance. But the marketplace seller is still answerable for the claims and the goods on offer.
One might think putting an end to a listing is the end of it, yet the platform could find itself having to put a halt to sales, talk to the buyers concerned, keep the records and deal with a regulator or a recall.
| Check | What To Confirm | Useful Record |
|---|---|---|
| Product identity | Model, version, materials, size and specification along with photographs. | Product specification and photographs |
| Safety evidence | Current reports for the exact product, testing and certification to the applicable standard. | Current reports linked to the exact product |
| Warnings | The approved label and online copy covering age, hazard, storage and charging. | Approved label and online listing copy |
| Supplier chain | Invoices, declarations and the manufacturer or importer’s contact and batch details. | Invoices and supplier declarations |
| Incident response | The register and record of any complaint, defect or injury and how it was escalated. | Incident register and response record |
More Is Required for Higher-Risk Goods
If the product is to be ingested or involves chemicals, heat, electricity, batteries, physical restraint, vehicles or contact with skin, or is for a child, then a deeper check is in order. The platform should look to have specialist review, insurance and stronger evidence from the seller, and perhaps have the product tested.
Seller verification is not a once only affair. Put important information to the test again if there is a change of product or supplier, a pattern of complaints or a new warning from the regulator.
Dealing with Recalls and Unsafe Goods
An Australia wide recall may be called for if a product is banned, does not live up to a mandatory standard or is otherwise a safety risk. Remedies can range from a refund or repair to collection and disposal.
When credible word of an unsafe product comes to hand, the business should not tarry in the name of perfect certainty; a delay only complicates matters and puts more customers in the way of it.
Prompt Incident Response
Put on record the date, the batch, the action you have taken and the particulars of the product, the seller and the complaint or damage. Do not edit the page and lose the original evidence, preserve the communications and the listing.
The onus is on a business to put the regulator in the picture where called for and to be cooperative when information is sought. In this regard, the ACCC has oversight of a number of national product safety matters, though state and territory regulators can have a part to play as well. For official direction one should look to Product Safety Australia and recalls.gov.au will have the latest on any recalls.
Remove, Warn And Trace
Taking a product off the search results does not go far enough. A platform ought to think about what else is required: disabling the listing, halting fulfilment and relisting, putting buyers in the loop and seeing if the like of it is being offered under another name.
When instructing customers on how to proceed with a product, be unambiguous. Where there is an injury or poisoning risk, or one of fire, choking or electric shock, make sure the communication conveys the need for immediate action.
Penalties And Enforcement Risks
There are risks of non-compliance, from regulator action and adverse publicity to injunctions, seizures and compensation claims. Should a defective item do damage to property or cause death or injury, product liability exposure is a possibility.
In the event of a serious contravention of consumer law, the penalty for a corporation may run to the higher of 30 per cent of adjusted turnover in the period, three times the benefit derived or AUD 50 million. An individual faces up to AUD 2.5 million. The precise penalty is a matter of the conduct and the legal provision at hand.
What is it that gets businesses in trouble?
Selling wares that are banned, not heeding a mandatory standard, putting forward safety claims without basis or not having supplier records in order are all too common.
So is the error of writing off a complaint as a routine return when in fact it is a sign of a hazard. “Battery swelling”, “cut my child” or “overheated” are reasons for a return that should be in the hands of someone with safety training, not lost in a general inbox.
Marketplace Compliance Checklist
This is a useful way to organise compliance across an e-commerce operation in Australia, but it is no replacement for legal counsel on product-specific issues of high risk.
- Identify the seller, manufacturer, importer and supply chain for each product.
- Check applicable mandatory safety standards, bans, warning labels and instructions.
- Match test reports and certificates to the exact model, batch and product version.
- Review online claims for accuracy, including “safe”, “approved”, “non-toxic” and “child-safe”.
- Keep traceability records for listings, orders, batches, complaints and supplier documents.
- Set clear rules for prohibited products, repeat sellers and relisting after removal.
- Train staff to identify injury, fire, choking, poisoning and electrical-risk complaints.
- Maintain a written process for recalls, regulator contact, customer notices and refunds.
One-Day Priority Plan
With a day to put better controls in place on a marketplace, turn your attention to products that present a danger of serious injury, or involve heat, electricity, batteries or children. Go through the top sellers and anything with a history of complaints or for which you lack evidence from the supplier. A small seller’s task is more circumscribed: find out who made and imported the product, get the listing in line with Australian requirements and have a folder of evidence to show for it. Such discipline is preferable to a policy document that is nicely presented but not adhered to.
Frequently Asked Questions
Product Safety Laws in an Online Context
Many goods put before the Australian consumer online are subject to the Australian Consumer Law, with its rules on product safety, mandatory standards, bans, recalls and misleading conduct. There may be other laws at the state or territory level depending on the circumstances.
Is a Platform Liable for Unsafe Goods?
Not by default for the wares of an independent third party. But the platform’s own conduct, knowledge and how it has responded to safety information can make it responsible. Effective controls over listings, incidents and sellers are to be had.
Mandatory Standards
It is a question of the category and use of the product. Certain toys, household or electrical items and the like may be covered by a ban or a mandatory standard. It is best for the seller to verify the requirements for the actual product rather than assume from the category name.
Consequences of Unsafe Sales
Aside from financial penalties of substance, there can be product removal, compensation and recalls. On a serious breach the corporate maximum can be 30% of adjusted turnover or AUD 50 million (or three times the benefit), whichever is greater.
Reporting an Unsafe Product
Have the photographs, order and seller details and proof of the problem to hand. If there is imminent danger or an injury, call for emergency help. Otherwise report it via the proper channels at Product Safety Australia or recalls.gov.au and, as is fitting, the marketplace.
Rules for Overseas Sellers
An overseas seller cannot expect to be immune from the Australian consumer law or claims simply by virtue of location. Those supplying to Australian consumers must be in compliance. It is for importers and platforms to sort out who is accountable for what before the product is listed.
A word to sellers
A marketplace is only as safe as its ability to say in short order who sold and made a product, what the evidence is and which customers have it, and what is done should it prove unsafe. That is what the law requires of Australian e-commerce in practice. Do not put off the unglamorous paperwork; it is better than having to account to your accountant or a regulator for a recall that could have been avoided.