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01 - The Brief
Marketplaces must now verify every seller's identity before allowing sales
Under the EU's Digital Services Act (Regulation (EU) 2022/2065), online marketplaces are legally required to collect and verify trader identity information before letting a business sell to EU consumers. Known informally as the "Know Your Business Customer" obligation, it's set out in Article 30 of the DSA, and it's fully in force. This isn't a future deadline, it's an active requirement platforms are already enforcing.
Inaccurate or inconsistent details can get you suspended, with no discretion
The part sellers underestimate: if the information you provide is incomplete, inaccurate, or can't be verified against official databases, and you don't fix it when asked, the marketplace is legally required to suspend you until you do. This isn't a warning-and-negotiate situation. The DSA removes the platform's discretion, they must suspend a trader whose details don't check out.
It applies to non-EU sellers, and the penalties on platforms are severe
The obligation applies to any marketplace targeting EU users, wherever the seller is based, so US, UK and Asian sellers on EU-facing marketplaces are squarely in scope. Platforms that fail to comply face fines of up to 6% of global annual turnover, which is precisely why they enforce seller verification so strictly. The fine falls on the platform, but the suspension falls on you.
02 — The Deep Dive
What the DSA's trader verification rules actually require, and how to make sure they never cost you a marketplace account
Last week's issue covered the EU AI Act's transparency rules, a compliance obligation many sellers didn't realize applied to them. This week is a close cousin: a rule that's been building quietly, is now being actively enforced, and whose main risk to sellers isn't a fine, but a sudden loss of access to the marketplaces they depend on.
What the rule requires
The Digital Services Act has been fully applicable across the EU since 17 February 2024. Among its many provisions, Article 30 imposes what's often called a "Know Your Business Customer" (KYBC) duty on online marketplaces, any platform that lets consumers conclude contracts with third-party traders. Before a trader can sell, the marketplace must obtain and make reasonable efforts to verify a defined set of identity information.
That information includes: the trader's name, address, telephone number and email; a copy of an identification document or a qualified electronic identification; payment account details; the trade register number where the business is registered; and a self-certification committing to offer only products and services that comply with EU law. Marketplaces are expected to check this data against reliable sources, such as the EU's VIES system for VAT numbers and national trade registers.
The enforcement mechanism that actually affects you
Here's the part that matters most for sellers, and it's genuinely different from most compliance rules. Under Article 30, if a marketplace has reason to believe a trader's information is inaccurate, incomplete or out of date, it must ask the trader to fix it. If the trader doesn't, or if the platform's verification fails, the marketplace must suspend the trader's account until the situation is resolved. The platform has no discretion to waive this.
In practice, this means the risk to sellers isn't a government fine, it's account suspension, often with little warning, triggered by something as mundane as a mismatch between the address on your marketplace profile and the one on your trade register, or a VAT number that doesn't validate cleanly against VIES. For a business that depends on marketplace sales, a suspension while you scramble to reconcile paperwork can be more damaging than any fine.
The risk here isn't the 6% fine, that falls on the platform. The risk to you is waking up to a suspended account because your trade-register address and your marketplace profile don't match. Consistency is the whole game.
Why non-EU sellers should pay particular attention
The DSA applies to marketplaces targeting EU users regardless of where either the platform or the seller is established. A seller in the US, UK, or Asia listing on an EU-facing marketplace is subject to the same verification as an EU-based one. For non-EU sellers, the friction is often higher, trade register equivalents differ by country, VAT or fiscal identifiers may not map cleanly onto EU databases, and address formats can trip up automated verification. That mismatch between a non-EU business's documentation and the EU databases marketplaces check against is a common, avoidable cause of verification failures.
Consumer-facing transparency, the other half of the rule
Alongside verification, the DSA (Article 30(7)) requires marketplaces to display certain trader information publicly on listings, so consumers can see who they're actually buying from: the trader's name, address, and trade registration where available. For legitimate sellers this is mostly automatic once your details are verified, but it's worth knowing that the identity information you provide isn't only used for a background check, some of it becomes publicly visible on your product pages.
Why this is being enforced harder now
Although the DSA has been in force since early 2024, 2026 is widely described as the year enforcement shifts from warning letters to actual penalties. Platforms have moved from initial onboarding checks to ongoing verification and re-verification of existing sellers. The original transition allowed platforms to make best efforts to verify already-active traders within twelve months of the rules taking effect; that window is well past, so the checks are now routine and continuous rather than a one-time onboarding hurdle. If your details were loosely entered a year or two ago, they may be re-checked at any time.
Action plan, if you sell on EU-facing marketplaces
Make your identity data identical across every platform. Your legal name, address, VAT number and trade register details should match exactly across all marketplaces and your official registrations. Mismatches are the most common trigger for verification problems.
Verify your own VAT number against VIES. If your VAT ID doesn't validate cleanly on the EU's VIES system, fix that at the source before a marketplace flags it. This is a frequent, avoidable failure point.
Keep your details current. A changed address, phone number or registration status that you didn't update on the marketplace can trigger a verification failure. Update proactively, not after a suspension.
Non-EU sellers: confirm how your business maps to EU fields. Understand which of your national identifiers the marketplace expects in the "trade register" and fiscal fields, and make sure what you enter is verifiable, not just accurate.
Keep your documentation ready. Have your identification document, registration proof and payment details organized, so if you're asked to re-verify, you can respond immediately rather than losing selling days.
This article is for informational purposes only and does not constitute legal advice. The Digital Services Act is complex and its application depends on your specific circumstances and the marketplaces you use. Consult a qualified legal adviser for guidance on your particular situation.
03 — The Stack
VIES VAT number validation
Given this week's topic, the most directly useful tool is the free EU system marketplaces themselves use to check your VAT number.
Free to access ✓Official EU system ✓All 27 member states ✓Instant validation ✓No account needed ✓
VIES (the VAT Information Exchange System) is the European Commission's free tool for checking whether an EU VAT number is valid and active. Since it's one of the primary databases marketplaces use to verify sellers under the DSA, running your own VAT number through it, and confirming the associated business details display correctly, is one of the simplest ways to catch a verification problem before a marketplace does.
The one limitation worth noting: VIES only validates EU VAT numbers, so it won't help non-EU sellers who aren't VAT-registered in the EU confirm their other identifiers. It also occasionally shows a number as invalid due to a member state database being temporarily unavailable rather than a genuine problem, so a single failed check is worth re-testing before acting on.
Not a sponsored placement. No affiliate relationship.
04 — The Number
6%
The maximum fine, as a share of global annual turnover, that a marketplace can face for failing to meet its Digital Services Act obligations, including seller verification.
Source: EU Digital Services Act (Regulation (EU) 2022/2065); European Commission
The 6% penalty is aimed at the platforms, not individual sellers, which is exactly why platforms verify sellers so rigorously, their own exposure is enormous. For sellers, the practical consequence flows downhill: a marketplace facing that kind of liability has every incentive to suspend first and ask questions later when a trader's details don't verify. Understanding that dynamic is the key to staying on the right side of it.
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