Shopify to take down fraudulent online stores from its platform

Online-store platform Shopify will take down online stores that violate consumer protection rules. Shopify will do so when European consumer authorities (including the Netherlands Authority for Consumers and Markets, ACM) report violations committed by online stores on Shopify. Shopify will additionally make sure that the requirement of presenting the online store’s contact details is ‘built-in’ in the website templates that traders use. In that way, consumers will be better informed and better protected.

Edwin van Houten, Director of ACM’s Consumer Department, explains: “Shopify left online stores free to decide on the contents of their websites. The standard templates, too, did not take into consideration the requirements that online stores need to meet such as presenting their contact details. As a result of the commitments made by Shopify, thousands of online stores will become better for consumers. Shopify will also take action sooner when fraudulent online stores cause consumer harm.”

What was this case about?

Shopify is a Canadian firm that helps owners of online stores create and manage their websites. With Shopify, it is very easy to launch an online store. The European consumer authorities have received many complaints about online stores hosted by Shopify. These owners of online stores are not so particular with consumer protection rules. For example, the conditions regarding returns were not clear, contact addresses were often missing on the websites, or fake offers were made. Shopify also offers a popular template that makes dropshipping possible. Dropshipping means that the online store itself does not hold any inventory, but has all orders shipped directly by the manufacturer. Those manufactures are sometimes based in China, which means long delivery times. Online stores were often not clear about such delivery times.

What are Shopify’s commitments?

• Shopify will take down any owners of online stores that do not comply with consumer protection rules if European consumer authorities request Shopify to do so;
• Shopify will inform online stores about European consumer protection rules;
• Shopify will add fields for the online store’s contact details in its online-store templates.

ACM and the digital economy

The digital economy is a key topic on ACM’s Agenda. The digitalization of the economy continues without abatement. New technological developments follow each other in rapid succession. Digitalization produces benefits, but it also carries risks. In the digital economy, ACM continues to ensure that markets function well. Through its oversight efforts, ACM wishes to ensure that consumers are able to participate with confidence in a digital economy that works for all people and businesses.

See also

The digital economy
Consumer protection (europa.eu)
Factsheet - Commitments of Shopify (europa.eu)