The Risk of Gray Trade: Product Safety and Post-Market Surveillance

Paolo Emilio Ascoli, Director of Distribution Control, Corsearch

Recent press reports¹ surrounding the sale of potentially dangerous children’s car seats, highlighted by consumer group Which? have stoked concern among brand owners about the online distribution of their products. After product withdrawals and recalls, or the discovery that product safety regulations have not been met by an unauthorized seller, just how can brand owners maintain control of product distribution and ensure their withdrawn product is no longer available in the online marketplace?

Alarmingly, Which? found listings of illegal car seats on websites from Shein, to online marketplaces including eBay. As eCommerce expands, financially challenged consumers are naturally attracted to discounted products. Meanwhile we also see the growth of the gray market - the sale of genuine products through unofficial or unauthorized channels.

Product Safety Regulations – a cornerstone of consumer protection

A particularly dangerous gray market scenario occurs when unauthorized sales engage in the sale of a brand’s product without the necessary safety checks, certifications, or regulatory oversight. Product safety certification is a cornerstone of consumer protection. For many categories, such as baby strollers, baby car seats, toys, and electronics, specific regulations and standards must be met before a product can be sold, also online.

Products sold in the EU and Great Britain must bear a mark of conformity, such as the CE mark (Conformité Européenne) for the EU or the UKCA mark (UK Conformity Assessed) for Great Britain. These marks are a declaration by the brand owner that the product meets all applicable legal and safety requirements.

Beyond general safety laws, various industries have their own stringent rules. For example, medical devices, pharmaceuticals, and certain food products are subject to highly specific and detailed regulations which also differ from country to country. Car seats and baby car seats require the necessary ECE R44 or R129 certification before they can be offered for sale.

Understanding Product Withdrawals and Recalls

In some cases, unforeseen risks develop during the use of a product, and a brand owner decides to recall their products from the market. However, currently available products can continue being offered online, even after many years.

In both the European Union and the United Kingdom, product safety is governed by a clear legal framework. At its core is the principle that products placed on the market must be safe. In the event a product is deemed to be unsafe, the brand owner can engage in two processes: a) withdrawal, which is the action taken to remove an unsafe product from the supply chain before it reaches consumers, and b) recall, which is the action taken to remove an unsafe product once this has already reached the public. The latter requires the brand owner to actively seek out and retrieve the product from end-users and consumers.

The EU's new General Product Safety Regulation (GPSR) and the UK's aligned regulations mandate that brand owners and distributors immediately inform both authorities and consumers once a dangerous product is identified.

When a brand owner discovers a product is unsafe, a swift and transparent response is not just a legal requirement but a moral one. The correct procedure involves several key steps:

• The brand owner must immediately inform all relevant national authorities (e.g., the Office for Product Safety and Standards (OPSS) in the UK or the EU’s Safety Gate system) of the issue.
• A detailed plan must be created, outlining how the product will be withdrawn or recalled. This includes how consumers will be notified and what remedy will be offered.
• The brand owner must issue clear, standardized recall notices that are easily understandable and free of jargon. The GPSR, for instance, requires companies to offer a choice between a refund, replacement, or repair.
• The company must use its internal records to trace the product's distribution, ensuring all affected items can be accounted for and removed from the market.

The Dangers of Recalled Products in the Gray Market

The proliferation of unauthorized sales in the gray market means it is not uncommon for recalled products, now in the hands of smaller retailers, to continue being offloaded to consumers. Brand owners must develop a comprehensive online monitoring program in order to combat this danger. This program should continuously scan online marketplaces, social media, and other websites to identify unauthorized sellers and products that have been recalled. The goal is to ensure the complete removal of violating content, even years after the initial safety issue became public.

Best Practices for Post-Market Surveillance and Enforcement

When an infringing product is discovered, the brand owner or brand protection team must act quickly. The primary method of removal is a Notice of Takedown sent directly to the marketplace (e.g., Amazon, eBay) or internet service provider (ISP) hosting the advertisement. The notice must outline the violation, provide proof of the product’s unsafe status and recall order, and demand its immediate removal. This procedure, now further clarified under the Digital Services Act (DSA - Reg. 2022/2065) in the EU, requires ISPs to act swiftly under such notifications. It is also important to highlight that the DSA now extends Intermediary Liability to “illegal content”, which now includes “…the sale of products or the provision of services in infringement of consumer protection law..” (Reg. 2022/2065, Recital no. 12).

The rise of the gray market and online commerce has shifted the burden of product safety. While regulators and brand owners bear the primary responsibility, consumers must also remain vigilant, and ISPs must integrate and improve their detection and removal processes to include other forms of “Illegal content.” It is of critical importance to engage in proactive and diligent post-market surveillance practices.

Strengthening Market Surveillance

In practice, the ability to meet these obligations depends on robust monitoring and enforcement infrastructure. Technological solutions need to tackle post-market surveillance at scale, ensuring that infringing or unsafe products are identified, documented, and removed in line with regulatory requirements such as the DSA.

Technology that integrates advanced detection methods, spanning marketplaces, social platforms, domains, and wider online ecosystems can provide brand owners and their legal teams with the evidence they need to substantiate takedown requests. By automating the collection of proof points, including screenshots, metadata, and seller histories, technology helps ensure that Notices of Takedown meet the evidentiary thresholds required by platforms and regulators. These solutions can also provide mechanisms to track and analyze patterns of infringement. Rather than treating each infringing listing as an isolated incident, such platforms can connect seller accounts, cluster activity, and highlight repeat offenders. This intelligence enables counsel and brand protection teams not only to act on individual infringements but also to pursue broader enforcement strategies, from escalation to regulators to civil or criminal proceedings when appropriate.

In recognition of the expanded intermediary liability under the DSA, it is important to support rights holders in holding platforms and ISPs accountable for the timely removal of illegal content. Reporting and audit trails, which provide transparency and defensibility, are essential for advising clients, responding to regulatory inquiries, or substantiating compliance.

All brand owners aim to safeguard the public while protecting their brand reputation. Compliance with product safety regulations, including proper procedures for withdrawals and recalls, is essential. Ultimately though, only by integrating thorough post-market surveillance will legitimate brands successfully act against unauthorized sellers, even years after the fact, helping to protect not only their brand, but also mitigating risk to the unsuspecting public.

¹ https://www.bbc.co.uk/news/articles/c8643d1p85zo