National Council must finally address initiatives on foreign online marketplaces

Low-cost online marketplaces Shein and Temu continue to benefit from overreaching. Various Swiss laws cannot be enforced by foreign online providers or are not applied. Whereas companies in Switzerland must comply with the law. The focus is on fair competition on the one hand and consumer protection and sustainability on the other. Every day, masses of low-quality, risky and often toxic goods are legally imported into Switzerland.

Swiss Textiles, together with other associations and consumer protection organisations, has now called on the National Council in an open letter to advocate for a level playing field in the coming sessions.

Not the first letter to the authorities

Back in November 2024, Swiss Textiles wrote a letter to the Federal Council together with business and consumer organisations.

They demanded:

• No more circumvention via direct sales: laws on product safety and the Food Act must be amended so that they also apply to privately imported goods. This is about consumer safety.
• Keeping an eye on VAT: The new platform taxation (VAT Act) for foreign online marketplaces has been in force for over a year. The Federal Tax Administration is tasked with ensuring compliance and identifying and reporting any loopholes.
• Strengthen customs and cantonal food inspectorates: The volume of small consignments from abroad is overwhelming border controls. The federal government must ease the burden on them, if necessary financed by a levy on every imported parcel.
• Comply with environmental protection law: It is currently almost impossible to monitor abuses of labour and environmental standards. Foreign marketplaces should take responsibility like their counterparts in Switzerland. This is why the new requirements of the Environmental Protection Act on the circular economy (EPR solutions) must also apply to them.
• Mandatory domicile: Authorities should be able to easily reach large online retailers based abroad and prosecute them if necessary - which is why legal representation is needed in Switzerland.

Up to half a million parcels from Asia

Up to 500,000 parcels arrive in Switzerland from Asia every day. Many of them demonstrably contain products that do not meet domestic safety standards. For example, an investigation by the Toy Association 2023 showed that 15 out of 18 toys sold on Temu and Shein were not marketable.

The federal government also carried out checks and came to a similar conclusion. As did European tests: more than two thirds of the toys and clothing tested had safety defects and contained harmful and banned substances.

EU has long since taken action

The EU plugged the legal loopholes in Switzerland when the Market Surveillance Ordinance came into force. In addition, the EU's Digital Markets Act makes large platforms accountable. As a result, the EU can now take measures against platforms such as Temu and Shein. The EU Commission found several violations of the Digital Services Act and obliged Temu to rectify the situation within one month.

The products of the Swiss textile and clothing industry are characterised by quality and durability. They pursue a different strategy to the goods of Chinese direct suppliers. The industry and companies have to face up to the competition. This is free competition. However, the same rules must apply to all market participants. That is why Swiss Textiles believes that a level playing field is key.