-Seven Operators of Online Market Places Sign-
June 29, 2023
Joint Press Release with the Consumer Affairs Agency, the Fire and Disaster Management Agency of the Ministry of Internal Affairs and Communications, and the Ministry of Land, Infrastructure, Transport and Tourism
Based on the “Communiqué on Product Safety Pledges” that the Organization for Economic Co-operation and Development (OECD) publicized, the Japanese “Product Safety Pledges” (hereinafter referred to as the “Pledges”) were formulated by related ministries and agencies for consumer products, including the Consumer Affairs Agency (CAA), the Fire and Disaster Management Agency of the Ministry of Internal Affairs and Communications, the Ministry of Economy, Trade and Industry (METI) and the Ministry of Land, Infrastructure, Transport and Tourism (hereinafter referred to as the “related ministries and agencies”), in collaboration with the operators of online marketplaces (hereinafter referred to as the “OM”), aiming to further protect consumers more than ever from the risk of harm to their lives and bodies posed by recalled products and unsafe products.
As of June 29, 2023, today, seven major OM operators signed the Pledges.
The OM operators that have signed the Pledges will be required to conduct: [ⅰ] efforts to remove entries of recalled products and products that violate laws and regulations governing safety standards and other criteria, [ⅱ] efforts in response to the notices from consumers of entries related to recalled products and products that violate such laws and regulations, and [ⅲ] establishment and maintenance of an internal control system to make these efforts. This approach will contribute to further improving the safety of products that consumers purchase at OM run by these operators.
1. The Pledges
Based on the “Communiqué on Product Safety Pledges” that OECD publicized,(1) the Pledges were formulated by the related ministries and agencies in collaboration with major OM operators.(2)
Aiming to further protect consumers more than ever(3) from the risk of harm to their lives and bodies posed by recalled products and unsafe products,(4) e.g., fire from such products, that have been placed or sold on OM, the Pledges are voluntary efforts in public-private collaboration(5) across the legal frameworks for product safety. The scope of businesses covered includes both B-to-C businesses, e.g., large online shopping malls, and C-to-C businesses, e.g., online flea markets and online auctions.
Moreover, the Pledges are composed of three parts: [ⅰ] main text of the Pledges, which consists of 12 pledge items in total (see Appendix 1), [ⅱ] Guidance for OM Operators, which is a reference material for such operators in understanding the details of the Pledges (see Appendix 2) and [ⅲ] Guide for Personnel in Charge, which was compiled by the related ministries and agencies(6) about ideal approaches, concrete details of efforts and procedures involving unsafe products and others (see Appendix 2). The public and private sectors are expected to collaboratively execute the Pledges.
Notes:
(1) See the Communiqué on Product Safety Pledges released on the CAA website.
(2) Online marketplaces, also called “malls or online malls” in Japan, are herein referred to as “online marketplaces” to clarify that businesses that provide a “site” for online product transactions are the targets of the Pledges.
(3) To secure the safety of consumer products, the public and private sectors have been collaboratively advancing efforts, including the removal of entries by OM operators and the issuance of alerts by the related ministries and agencies. The Product Safety Pledges are to expand and improve these efforts.
(4) Application stores and digital advertisement do not fall under the coverage of the Pledges.
(5) The Pledges are based on voluntary efforts and are not a scheme under certain laws.
(6) The number of related ministries and agencies is expected to increase in the future.
2. Participation of OM operators in the Pledges
If an OM operator has a sufficient ability to conduct all 12 pledge items in the Pledges(7) and it wishes to participate in the Pledges, it should submit a document stating how it undertakes the 12 pledge items in advance and also file with the CAA a copy of the pledge document of the Pledges with a signature of its representative.
In response, the CAA will post on its website the information of the operator, including a copy of the signed pledge document, the name of the operator (or all operators, if any) and a list of OM operators that have signed the Pledges.
As of June 29, 2023, the number of OM operators that have signed the Pledges was seven (see Appendix 3).
Note:
(7) No restrictions of participation in the Pledges, such as capital adequacy ratios and other financial regulations, are imposed.
3. Concrete details of the Pledges
The main text of the Pledges (Appendix 1) presents the details of all 12 pledge items.
For example, an OM operator that has signed the Pledges should check the websites of the regulatory authorities, etc. concerning recalled products and unsafe products(8) on a regular basis and remove entries of such products in response to a request from the authorities and, if it is notified by any consumers of such products, it should take appropriate actions in accordance with the handling processes that the operator has determined in advance.
Moreover, such OM operator should build a system required to take: [ⅰ] appropriate measures, including suspension of accounts of malicious sellers and [ⅱ] appropriate measures to prevent recalled and unsafe products from re-entry.
Based on this, the regulatory authorities should undertake the Pledges in a public-private collaborative manner to make the Pledges effectively functional through such efforts as: [ⅰ] providing OM operators with information on sellers of recalled products and unsafe products and other data, and [ⅱ] providing OM operators with explanatory materials targeting sellers (e.g., information on the ST Marks of the Japan Toy Association or the SG Marks of the Japan Product Safety Association).
These efforts are expected to facilitate sales of safer products on the OM run by the OM operators that have signed the Pledges and further improve consumer safety.
Note:
(8) “Recalled products and unsafe products” refers to, for example, products that fall into the list of items subject to the PS Mark system but do not indicate a PS Mark under the laws and regulations. The related ministries and agencies decide on specifics of such products.
4. Annual check of OM operators’ execution of the Pledges (continuous quality assurance)
From all OM operators that have signed the Pledges, the CAA will receive an annual report on their performance results using key performance indicators (KPIs) and check if the operators continue to conduct efforts involving the Pledges.
In addition, the CAA should compile the results of the check, hold discussions with all related ministries and agencies as well as with all OM operators, and then publicize the overall situation of OM operators that have signed the Pledges. Through this process for an annual check of OM operators’ execution of the Pledges, these operators are able to continue to secure the quality of the Pledges.
5. International trends in and background to product safety pledges
Product safety pledges have been signed by multiple OM operators in a collaborative framework between the operators and the European Commission in June 2018; between the operators and the Competition and Consumer Commission of Australia in November 2020; and between the operators and the Fair Trade Commission and the Consumer Agency of the Republic of Korea in April 2021.
Moreover, the OECD International Conference on the Consumer Marketplace of the Future held from June 15 to 17, 2021, released the Communiqué on Product Safety Pledges, stating the main commitments that are required to be shown in product safety pledges.
In response, Japan reported that it would start efforts for formulating its own product safety pledges before the “Joint Meeting of the Consumer Product Safety Subcommittee under the Industrial Safety and Consumer Product Safety Committee of the Industrial Structure Council and the Product Safety Committee under the Council for Consumption Economy” as a METI body(9) held on March 25, 2022.
Note:
(9) The CAA and the METI have jurisdiction over the Consumer Products Safety Act, a general law on consumer products.
6. Characteristics of the Japanese version of Product Safety Pledges
Japan formulated the Product Safety Pledges in close collaboration with major domestic OM operators, while complying with the pledge items stated in the Communiqué on Product Safety Pledges of OECD, of which Japan is a member, and also referring to the current situations of such pledges in the European Commission and Australia.
Before the formulation of the Pledges, METI had required major OM operators to take certain actions, e.g., “those to exhibitors suspected of violating laws and regulations.”(10) As these operators have signed the Pledges, a new framework for product safety on OM has now been created in Japan.(11)
The Pledges that OM operators should execute in Japan satisfy a common scheme among those in the European Commission and Australia. Moreover, the Pledges contain Japan’s unique actions that place more emphasis on consumer protection, for example, submission of an annual report on consumer measures, e.g., “actual workflows that the operators have undertaken,” using KPIs.
From an international viewpoint, the Pledges are an effort in line with efforts by the European Commission and the Competition and Consumer Commission of Australia in terms of product safety pledges in which KPIs are set.
Notes:
(10) In addition, METI established a collaborative tie with OM operators ahead of other countries, e.g., examination by OM operators of products subject to laws and regulations prior to selling them on OM. METI has also been encouraging OM operators, through liaison meetings, to conduct such efforts as the examination of products prior to selling them and patrol activities to encourage sellers to observe laws and regulations.
- See “Trends in Product Safety Administration” on the METI website.
(11) Under this framework, multiple ministries and agencies with jurisdiction over consumer products will be permitted to [i] designate the website that OM operators should refer to in removing entries of recalled or unsafe products and [ii] clarify the definitions of unsafe products by law, thereby allowing OM operators to expand the coverage of products subject to the removal and making comprehensive actions for such products.
7. Comments from OM operators that have signed the Pledges
For comments that seven OM operators that have signed the Pledges made on their efforts, see Appendix 4.
