A low-quality toy story

In 2021 the MCCAA purchased and tested 20 toys from non-EU online marketplaces. No less than 19 of these failed to meet the requirements specified in the EU’s Toy Safety Directive.

Making online purchases has never been more attractive.

Not only are thousands of products being constantly advertised on our devices whether we like it or not, but they are potentially cheaper and save us the hassle of having to bus, walk, or drive from outlet to outlet in search of the right product.

Since it’s Purchase Season, or rather the time when we all scratch our heads to think of the right gifts to give, we spoke to the Malta Competition and Consumer Affairs Authority (MCCAA) to understand how online purchases affect local business.

The Maltese stand out for a reason

A spokesperson for the MCCAA laid down the facts. The 2023 Consumer Conditions Scoreboard published by the European Commission indicates that 59% of Maltese consumers have made online purchases in the past year. Although this seems like a lot, we are far off from other Europeans, since the EU average reached 71%.

What makes us stand out is the fact that we are buying things from people and businesses that are located outside European borders. In fact, 43% of the Maltese consumers who made online purchases, have bought from retailers or service providers located outside the EU. This figure is 20% for the EU consumers.

Our three most frequent woes

We ask the MCCAA about the three most frequently reported practices that concern Maltese consumers when using online platforms for shopping.

What seems to bother us are personally targeted online advertising, hidden advertising in search results, and reviews that do not appear genuine.

 In fact, Maltese consumers claimed to be mostly worried about the use and sharing of personal data; the collection of online data and related profiling without explicit knowledge or agreement; and the installation of cookies.

In the context of Information Technology, “cookies” refer to small pieces of data that websites store on a user’s computer or device. They play a significant role in online sales by enabling e-commerce websites to track user behaviour for marketing and analytics purposes.

The Omnibus Directive

The Office for Consumer Affairs within the MCCAA actively participated at EU level through extensive feedback on European proposals to strengthen consumers legal rights online.

The coming into force of the Omnibus Directive last year brought about key legislative changes. The new rules have a big impact on sellers, online sellers, and online marketplaces, who now must:

  • Let customers know about the original price when there is a discount.
  • Check if the reviews are from real customers who bought or used the product or service. If a seller shows customer reviews, they need to explain how they make sure the reviews are from real users.
  • Follow the rules of GDPR (data protection) and consumer rights for contracts where the customer doesn’t pay with money but with personal information for digital content or services.
  • Tell customers if the displayed price is personalised using automated decision-making and profiling.
  • Inform customers whether a third-party that is selling things on the online marketplace is a trader. If the third-party is not a trader, the seller must tell customers that the usual consumer rights do not apply to the deal.

There are just a few changes. The rules laid out in the Omnibus Directive address transparency and information requirements of online platforms, ranking and search results, online consumer reviews and personalised pricing.

Of course, all this applies to purchases made within the EU. If you’re buying from businesses outside the EU, such as those in the UK, the US, China, and others, your rights may not be the same and you could be subject to reduced protection and additional taxes and charges.

For instance, EU-based websites typically offer a 14-day cooling-off period, allowing you to return items and receive a full refund. This may not be a guarantee when dealing with websites located outside the EU. To determine the location of a business, it’s crucial not to rely solely on the website name or the display of prices in euro. For example, a website with a .co.uk ending doesn’t necessarily mean the business is based in the UK. To find out a business’s location, you need examine the terms and conditions, privacy policy, or the ‘Contact Us’ section of the website, as these sources often provide the physical address of the business.

Toy story

Data provided by the MCCAA indicates that products bought (at a much low-price than the average similar product) from platforms that are established outside the EU, have a higher rate of failing safety-related checks.

“The Authority has been very active in this regard, carrying out digital checks through artificially intelligent tools and even sending samples for testing,” explains the MCCAA spokesperson. “In 2021 the Market Surveillance Directorate (within the MCCAA) purchased and tested 20 toys from non-EU online marketplaces. No less than 19 of these failed to meet the requirements specified in the Toy Safety Directive.”

This led to the issue of Safety Gate notifications and requested the marketplaces (AliExpress & Joom) to remove the 19 product listings posing risks.

Safety Gate, formerly known as RAPEX (Rapid Alert System for Non-Food Products), is a European system for the rapid exchange of information about dangerous non-food products posing a risk to the health and safety of consumers. Safety Gate notifications are alerts issued through this system to notify member countries about products that have been identified as posing such risks.

Education and digital investigation

The MCCAA has a strong outreach to customers through awareness raising and guidance of how to spot products that do not meet EU standards.

In addition, the Authority has actively promoted at EU level stronger accountability and enforcement tools by extending the legal obligations of all the economic operators in the chain, not only manufacturers but also platforms, importers, and distributors.

The MCCAA also set up a Digital Investigations Unit (DIU), whose aim is to detect the placing on the online market of unsafe products, the use of fraudulent or missing clauses in traders’ terms of sales, and the monitoring of unfair commercial practices by the trader providing an online service and /or selling goods online. Since February 2022, the DIU has investigated more than 9,000 online shops, and notified over 500 traders on possible unsafe products being sold on their e-shop or platform.

How local prices are impacted

“The influence of foreign websites on pricing dynamics in the Maltese consumer market is a complex and context-dependent issue, particularly because it cannot be compared to a scenario where no online sales exist,” explains the MCCAA representative. She adds that the effect is also impacted by changing demographics and socio-economic characteristics of consumers, as well as evolving economic conditions.

“As an Authority, we have indications that, at least in the clothing retail sector, foreign online websites exert a significant competitive constraint on local retailers, even if certain aspects of brick-and-mortar stores which customers value, such as the possibility to try on clothing to assess the fit, comfort, and material quality and the provision of personal assistance, cannot be replicated by online shopping platforms,” she observes.

What to keep in mind

If you’re going to purchase things online, here’s what you should keep in mind.

  • Make sure the website you use is secure. Look for “https://” in the website’s URL, indicating a secure connection.
  • Buy from reputable retailers.
  • Read reviews and ratings from other customers. 
  • Use secure payment methods, such as credit cards.
  • Do not share sensitive information like social security numbers or passwords.
  • Familiarise yourself with the seller’s return and refund policies.
  • Read product descriptions well, to ensure you are getting what you expect.
  • Check the estimated delivery times and shipping costs.
  • Look for clear contact information, including a physical address.
  • Save confirmation emails, receipts, and order details.
  • Check your credit card or bank statements for accurate charges.

Most importantly: trust your instincts. If something seems too good to be true, that’s because it probably is.

Photo credit: KawaiiArt1980

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