NZME Fined, Chinese Sellers Untouched: The Inequality of Product Safety Enforcement
"Fun, fascinating, and potentially fatal?" This might not be the tagline for the spherical rare earth magnets (SREMs) still being sold around the world, but perhaps it should be.
New Zealand's business landscape was recently rocked by a case involving NZME Advisory Limited (NZME), a publicly listed company. The company was fined $87,750 NZD by the Commerce Commission for selling 213 sets of magnetic spheres, listed as buckyballs, on its previously owned deal platform, GrabOne.co.nz (1).
The magnets, which are small, high-powered magnetic balls, were sold between October 2020 and September 2021. This activity was in breach of an unsafe goods notice that bans the supply of any magnets, sold in sets of two or more, that are marketed as a toy, modeling kit, or jewelry, with exceptions for educational and industrial use.
The case took a tragic turn when a child in New Zealand swallowed two of the magnets, requiring significant surgery to remove them. Following the incident, the Commission contacted NZME, which subsequently recalled the sets and notified customers of the recall.
The fine NZME received is equal to about $250 USD per set each of the 213 magnet sets sold on GrabOne. In comparison, America's Groupon platform sold over 10,000 sets in just one of many listings (2), with sales continued past December 2022. Similar to GrabOne, products available on Groupon are sold by a third party.
This fine may seem like a victory for consumer safety, but a contrasting reality raises questions about the effectiveness and fairness of New Zealand's product safety enforcement. The US Consumer Product Safety Commission (CPSC) has had similar difficulties at home, where the primary US based SREM brands had been shut down, leaving no industry partners to develop safer child-resistant packaging, age restrictions, or warning labels.
Despite the NZME fine, "buckyballs" continue to be readily available online from overseas sellers, specifically Chinese ecommerce sites, found easily from the top search results. While the real Buckyballs company shuttered in 2014, bootlegs are abound. Buckyballsstore.com, a webstore based in Jiangsu, China, is a prime example (3), and is the same store that the US CPSC was unsuccessful at shutting down (4).
While NZME has been severely penalized for its actions, these international ecommerce sites seem to be operating unimpeded, selling the same potentially dangerous products directly to New Zealand consumers. This situation highlights the glaring difficulty in enforcing product safety laws on international online retailers, especially when demand. The New Zealand Commerce Commission has already filed an appeal of the NZME fine, arguing that it should be about double (5) the amount fined.
Businesses absolutely must be safety minded, but it seems that this responsibility is unevenly applied, and largely dependent on whether the business operates domestically or internationally. This situation leaves consumers in a precarious position, as it becomes their responsibility to discern between safe and unsafe products, especially when buying from international sellers.
In the age of global ecommerce, this incident brings to the forefront the need for more robust international cooperation and regulations to protect consumers worldwide. It also underscores the importance of consumers being aware of the safety standards of products they purchase, especially from international online stores.
As NZME faces its penalty and the fallout from this incident, the question remains: How can New Zealand regulators, US CPSC, and other countries, effectively reduce injuries from products in digital marketplace to ensure consumer safety across borders?
Shihan Qu
Director of MagnetSafety.org
3.) https://www.buckyballsstore.com/pages/about-us
4.) https://www.magnetsafety.org/releases/stop-sale-defied-buckyballsstore-com
Other Groupon listings for SREMs:
https://www.groupon.com/deals/gg-mp-5mm-multi-colored-magnetic-balls-216
https://www.groupon.com/deals/gg-mp-216-piece-magnet-ball-fidget-for-kids
https://www.groupon.com/deals/gg-mp-216pcs-3mm-5mm-buckyballs-magnetic-diy-balls-neocube-puzzle-toy
https://www.groupon.com/deals/gg-magnicubes
https://www.groupon.com/deals/gg-mp-216x3mm-buckyballs-magnet-magnetic-diy-balls-puzzle-toy
https://www.groupon.com/deals/gg-mp-5mm-multi-colored-magnetic-balls-216#tips