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The landscape of lawlessness online

Across the world, e-commerce has transformed how consumers access products and how businesses reach global markets. Online marketplaces and social media platforms now facilitate billions of transactions every day, cutting across borders and connecting buyers and sellers on an unprecedented scale.

However, this rapid expansion has also created significant vulnerabilities. Criminals and unscrupulous sellers exploit gaps in online oversight to offer illicit, unsafe, or non-compliant goods that would never be permitted in regulated offline environments. These include unlicensed pharmaceuticals, counterfeit and adulterated cosmetics, banned pesticides, illicit alcohol and tobacco, unsafe children’s products, and even stolen merchandise. The result is a growing disconnect between long-standing consumer protection frameworks and the realities of digital commerce.

TRACIT’s report, The Landscape of Lawlessness Online, documents the breadth of illicit trade occurring on online platforms and examines the structural weaknesses that allow such activities to persist. The report provides concrete examples from major global marketplaces and social media platforms, illustrating how gaps in seller verification, product screening, and enforcement routinely expose consumers, businesses, and governments to harm.

Report structure
The first part of the report documents the breadth of lawlessness taking place across online marketplaces. It details how e-commerce platforms have become channels for:

• Unauthorized sale of regulated products,
• Widespread resale of stolen goods,
• Circumvention of consumer health and safety regulations, and
• Violation of product safety laws and standards.

The second part examines why these failures persist. It evaluates the policies and practices of major online platforms by assessing three questions fundamental to any effective regulatory system:

1. Have platforms established clear and accessible rules for sellers?
2. Do platforms put in place operational measures to enforce those rules?
3. Do platforms impose meaningful penalties that deter repeat violations?

The report concludes with TRACIT’s policy recommendations for establishing online–offline regulatory parity: the principle that rules applying to the sale of goods in physical stores must also apply when those same goods are sold online. ​

Key findings

• Illegal and unsafe products are widely available on major online platforms, often in direct contravention of national regulatory frameworks.
• Existing platform policies focus primarily on intellectual property protection, while safeguards for other high-risk products remain limited or unenforced.
• Self-regulation has not contained illicit trade: weak verification, minimal oversight, and inconsistent penalties allow violators to operate with relative impunity.
• Because platforms design and control every stage of the online transaction, they are not neutral hosts. Consequently, safe-harbor protections are inapplicable and should be removed from any statutory or regulatory provisions.
• Stronger, government-mandated due diligence requirements are needed to ensure that online platforms meet the same obligations expected in offline commerce.

Critical recommendations

1. Establish clear statutory duties for platforms: require online marketplaces to verify sellers' identities, licenses, and eligibility before products can be listed.
2. ​Implement mandatory pre-listing checks for regulated and high-risk goods: Platforms should verify that products comply with national requirements— such as registrations, labeling standards, age or prescription requirements, and safety certifications—before allowing listings to go live.
3. Introduce continuous monitoring and effective enforcement mechanisms: Regulations should require proactive detection, timely takedowns, and credible “stay-down” systems to prevent re-listing of prohibited goods.
4. Mandate transparent record-keeping and traceability: Platforms should retain seller information, verification records, and transaction histories to support oversight and enforcement.
5. Require public transparency reporting: Platforms should regularly disclose the volume of illicit listings detected, enforcement actions taken, and measures adopted to improve compliance.
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If platforms do not fulfil these duties, they must bear legal liability for illicit trade conducted through their services.

MEDIA CENTER

• TRACIT Media Release​

Download the report