Europe’s customs systems are buckling under the weight of an e-commerce flood. In 2024, over 4.6 billion low-value parcels entered the EU—almost double the previous year—with 91% arriving from China. Nearly all are declared under €150, dodging customs duties under the bloc’s de minimis exemption. Platforms like Temu or Shein mask the real sellers behind their digital storefronts, creating a black hole for enforcement. The result is a system where regulators can’t trace sellers, tax authorities miss out on €10 billion annually, and EU companies that play by the rules are priced out of their own market.

What’s arriving is often more than just cheap—it’s unsafe, counterfeit or environmentally damaging. Toy and cosmetics knockoffs bypass safety checks, small electronics carry unknown fire risks, and there’s no one in the EU to hold accountable. Meanwhile, carbon emissions soar as millions of air-freighted packages make their way from Asia to European doorsteps, their cost artificially suppressed by tax arbitrage and cut-rate shipping. For European SMEs, it’s a death by a thousand clicks—undercut by a system that rewards opacity and regulatory evasion.

Member states are growing restless and might potentially face EU setback. France has proposed a €2 handling fee on small parcels, even at the risk of breaching single-market rules. Germany and Italy want the €150 exemption scrapped entirely. But without a coordinated EU-wide response, these solo efforts risk fragmenting the internal market. The European Commission’s broader customs reform—centered around a common handling fee and a new EU Customs Authority—isn’t due until 2028, and key states are pushing for parts of it to be fast-tracked.

Pressure is mounting. The U.S. has already revoked its own de minimis rule for Chinese goods, and trade experts warn that the redirected flow will soon target the EU’s porous system. Without urgent intervention, Europe could become the global dumping ground for untraceable, untaxed and often unsafe goods. Fixing this isn’t about closing borders—it’s about restoring fairness, accountability and resilience to a digital marketplace that now feels rigged against those who follow the rules.

Difference between an online platform and an online store

The key difference lies in the role of the operator. An online store sells products under its own name, even if it sources products from various suppliers or manufacturers, and has full control over pricing, payment, and most importantly customer service. Customers interact with a single entity and complaints follow a unified process. In contrast, an online marketplace serves as an intermediary between independent sellers and customers. Its operator provides the technical platform and interface, but individual sellers are responsible for pricing, shipping, returns, and complaints. Each seller operates under their own terms, and customer service is therefore fractured between many entities. These sellers are furthermore often untraceable, and customers are left without a proper way to file a complaint.

The issue the EU is currently facing is simple; the online marketplace platforms are pretending, at least through marketing to customers, to be online stores.

Unveiling compliance issues: insights from mystery shopping

Between November 2024 and January 2025, a mystery shopping study of TEMU and Allegro uncovered major compliance shortcomings. Out of 36 products acquired from various categories including cosmetics, electronics, toys, and more, 22 exhibited regulatory violations, i.e. 78%. The majority of transactions breached essential EU regulations, such as the Market Surveillance Regulation (EU) 2019/1020, GDPR (EU) 2016/679, and the Digital Services Act (EU) 2022/2065. Fiscal infractions like VAT non-compliance (Council Directive 2006/112/EC) and failures related to the Packaging Waste Directive (94/62/EC) were also widespread. Notably, eight orders were never delivered, violating the Consumer Rights Directive (2011/83/EU).

The findings pointed out problems like deceptive marketing, counterfeit sales infringing trademark law (Directive 2015/2436; Regulation 2017/1001), absence of CE markings, and missing user manuals, which contravene safety regulations. A “Wireless Charging LED Desk Lamp” from TEMU even caused an electric shock due to faulty insulation, exemplifying severe product safety risks.

Furthermore, many violations were associated with highly regulated items such as disinfectants, specialized foods, jewelry, infant nutrition, pyrotechnics, and corrosive materials. Significant breaches were noted against regulations including the CLP Regulation (EC) No 1272/2008, Biocidal Products Regulation (EU) No 528/2012, and the Food Information to Consumers Regulation (EU) No 1169/2011.

Additionally, the investigation exposed a lack of adequate age verification systems for products where such checks are legally required. Consequently, items like pyrotechnics, dangerous chemicals, adult toys, and certain products potentially containing higher THC levels than stated were readily available. This lack of oversight not only violates sector-specific regulations, including age-restriction laws, but also significantly increases risks for vulnerable consumer demographics.

Moreover, the inquiry uncovered a deficiency in effective age verification systems for products that legally require such checks. Consequently, items like pyrotechnics, adult toys, and certain products that may contain higher levels of THC than stated were readily available. This lack of oversight not only violates industry-specific regulations, including age-restriction mandates under national laws, but also significantly heightens risks for vulnerable consumer demographics.

Equally troubling was the purchasing landscape itself. Researchers found widespread use of deceptive advertising strategies and dark patterns —promotional banners boasting discounts and limited-time offers that were unattainable at checkout. Interactive features, such as “spin-the-wheel” games that promised rewards, consistently failed to deliver real benefits. These actions, which contravene the Unfair Commercial Practices Directive (2005/29/EC), indicate intentional consumer manipulation, raising serious legal and ethical issues regarding transparency and fairness in online commerce.

Beyond these findings, the investigation highlighted structural deficiencies that did not meet consumer expectations. Persistent problems with returns, complaint handling, and customer support were apparent. While marketplaces encourage consumers to interact directly with sellers, operators frequently intervened without formal accountability. They also manage listings, modify rankings, and promote “bestsellers” through non-transparent algorithms, consolidating control while claiming liability exemptions under the Digital Services Act (EU) 2022/2065.

The investigation emphasizes critical regulatory deficiencies, advocating for enhanced enforcement to safeguard EU consumers and maintain market integrity.

Possible solutions

If the European Union is to save itself from this flood of Chinese undercut parcels, it must act swiftly.

The current EU regulations need revision, structural changes, and real enforcement of these rules. The EUR 150 exemption from custom duties needs to be swiftly revoked in order to save the EU market from collapse. Today, the regulation is mostly left on each individual member state, which needs to change.

Current legal interpretations allow online marketplaces to classify themselves as intermediaries, thus evading core liabilities that typically fall on sellers. However, their active role in curating listings, promoting products, controlling rankings, handling payments, and mediating disputes places them in a materially different position. The EU should introduce a presumption of economic operator status for platforms engaging in such commercial behavior. This would render them jointly and severally liable for VAT obligations, product safety, unfair commercial practices, and consumer redress.

The Digital Services Act (EU) 2022/2065 opens the door for this shift by obligating platforms to take greater responsibility—but enforcement must follow suit. Marketplaces should be compelled to conduct mandatory due diligence on third-party sellers, including identity verification, regulatory compliance declarations, and periodic audits.

The EU should apply meaningful disincentives to platforms that repeatedly fail to comply, such as administrative fines for repeated breaches, temporary access restrictions or IP blocking, and public blacklisting of platforms deemed high-risk for consumers.

In addition, closer cooperation between EU Member States is crucial. Enforcement efforts cannot remain scattered or rely solely on national initiative. To avoid inconsistencies and gaps in regulation, there is a clear need for harmonized sanctions, collaborative investigations, and shared digital enforcement tools. Only through meaningful cross-border coordination can the EU prevent any country from becoming a refuge for platforms that choose not to comply.

Article written by Mgr. Vladimír Michael Mohapl from our Czech member law firm PELIKÁN KROFTA KOHOUTEK advokátní kancelář s.r.o.