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Shopify enhances level of consumer protection for web stores using its services

Belgium | Tuesday, October 11, 2022

Following a dialogue with the Network of Consumer Authorities, under the lead of Belgium’s Directorate General for Economic Inspection and the coordination of the Commission, Shopify agreed to create a fast and effective notice and action procedure to be used by Consumer Authorities and to change its templates in order to push traders into being more transparent towards consumers, an innovative approach to consumer  protection otherwise referred to as ‘compliance by design’.
 
Shopify, headquartered in Canada, is one of the leading companies enabling traders to create their own web stores on its platform, offering them also webhosting, drop-shipping and other services. Consumer Authorities received numerous complaints through the European Consumer Centres about web stores hosted by Shopify that engaged in illegal practices such as fake offers, fake scarcity claims, counterfeit goods, no or late delivery or no provision of contact details. Especially during the Covid-19 pandemic there was a spike of complaints as consumers and legitimate traders moved online quickly and scammers quickly took advantage of the situation. Many of the web stores using Shopify also conduct business through the so-called drop-shipping business model without duly informing consumers about expected delivery times or additional customs charges. 
 
Overview of Shopify’s main commitments:  

  • Fast and effective notice and action procedures dedicated to CPC authorities, against traders that engage in unfair commercial practices through web stores hosted by Shopify. 
  • More clear and detailed legal guidance on EU consumer law, addressed to traders when setting up their web stores through Shopify
  • Fields have been added for company information and contact details in Shopify’s templates to create web stores and in the Terms and Conditions, Privacy Policy, and Refund Policy Generators.
  • Provision of company details for EU/EEA traders when requested by CPC Authorities.

Moreover, national consumer authorities have also agreed to reinforce their cooperation with the Canadian Competition Bureau against Shopify traders that are not based in the EU/EEA.

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