A New EU Regulation Could Inadvertently Crush the Bandcamp Ecosystem

Just last week, the European Union officially enacted the Packaging and Packaging Waste Regulation (a.k.a. PPWR), and while most people have probably never heard of this environmentally minded regulatory framework, it inadvertently threatens to make the selling of physical goods on Bandcamp, Discogs or, frankly, any other direct-to-consumer platform a financially unreasonable endeavor—especially for small labels and independent artists. That includes labels and artists that aren’t even based in the EU; literally anyone who wishes to sell within the bloc is required to follow these new rules.

These claims might seem hyperbolic, especially since there’s been nearly zero coverage of PPWR in either the music press or the mainstream media, but the potential consequences of the new regulation are very real. Noncompliance can lead to massive fines, and even those who wish to follow the rules and continue selling in the EU are now required—at least on paper—to take on thousands of euros in new expenses, and do so while navigating a dauntingly complex new bureaucratic regime.

Although the PPWR only went into effect on August 12, it’s actually been in the works for several years, and was designed to replace the EU’s Packaging and Packaging Waste Directive, which was enacted in 1994. Given the large-scale economic changes that have taken place since then—namely, the rise of platforms like Amazon and the general explosion of online shopping—it’s no surprise that the EU sought to update its regulatory approach, and do so in a way that would significantly reduce the amount of waste being created by mailorder sales. Approved by the European Parliament in April 2024 and formally adopted by the European Council in December of that same year, the PPWR most directly targets packaging producers, implementing new obligations and targets that include:

• All packaging materials must be designed for recycling.

• All plastic packaging must include a set percentage of post-consumer recycled (PCR) material. (The percentage varies depending on the packaging type.)

• A ban on certain types of single-use plastic packaging types.

Those items represent just a small fraction of what’s inside the PPWR, but it’s important to note that many of these new criteria won’t become fully binding until January 1, 2030.1 That said, the regulation has already officially entered into force, and its laundry list of new rules and responsibilities will affect not just packaging producers, but any business that puts packaging waste into the market.

Do you sell goods online, and do you then use packaging materials to ship those goods to people in the European Union? If so, the PPWR almost certainly applies to your business—even if that business is not based in the EU, and even if the business is being conducted by an individual. (Full disclosure: I am not a lawyer, nor am I a regulatory expert, so absolutely nothing in this article should be taken as legal advice. If you’re selling goods within the EU, or conducting any sort of activity that involves packaging and might be construed as a business, contacting experts and / or professionals who are better versed in these matters is probably a good idea.)

For sellers, the most basic PPWR-related responsibilities have to do with things like using recyclable materials and ensuring that the empty space in e-commerce packaging does not exceed 50%, but full compliance does not stop there. It also includes something called Extended Producer Responsibility (EPR); this designates online sellers as the “producers” of the packaging waste that they put into the market, and holds them directly responsible for ensuring that packaging-related regulations are followed. (Think of it as a “polluter pays” framework.)

Within a seller’s own country—or any country where their business has a physical presence—they can represent themselves when it comes to PPWR-related matters, as their actions are accountable to the governments of where they’re operating. Where things get tricky, however, is when a seller who’s based in one EU country sells and ships goods to customers in a different EU country. In that case, compliance now requires the seller to designate an Authorized Representative—a locally based entity in that country who acts as a legal proxy, filing the necessary paperwork and also serving as an official point of contact to government inspectors.

Unfortunately, an option to designate a single Authorized Representative for the entire European Union does not exist. There is no one-stop shop for EPR compliance, and under current rules, sellers must contract the services of an Authorized Representative in every single EU market where they wish to sell goods. Complicating matters further, all 27 EU member countries have their own seller registries and their own specific approaches to EPR, which means that any seller who wishes to operate legally across the entire bloc must navigate a staggeringly complex bureaucratic web, one with a myriad of different languages, procedures and costs.

That’s the other issue: Authorized Representatives don’t work for free. Most are private individuals and businesses, and at this point their fees vary wildly. A German company called EcoComply, for instance, charges a fixed, all-in price of €1,000 per country per year, while AuthoriseMe—another German operation—offers different tiers of service that vary from one country to the next; for Slovakia, annual prices range between €184 and €529, while the cost for Austria and Spain starts at €274 and goes up to €974, and the Czech Republic ranges between €139 and €1299. (Just FYI, none of those prices include VAT, so the actual costs are even higher.)

Estonian firm Eldris2 also varies its rates by country, and might be the most illustrative example of just how financially burdensome these new compliance requirements can be; packaging EPR in Germany, at €360 per year, is the cheapest country on their list, while the annual rates for Denmark, Hungary, Portugal, Latvia and Slovenia all run more than €1000 each. The price for Slovenia, in fact, is just shy of €1500, and if someone wanted to register with Eldris for all 27 EU member countries, the total cost for just the first year would be nearly €16,000.

These new requirements might make sense for Amazon and corporate retailers, but they can’t possibly apply to everyone, right?

Wrong. When drafting the PPWR, the EU included some very small regulatory carveouts that apply to Micro-, Small- and Medium-Sized business—those are official designations that correspond to a recommendation that was adopted by the European Commission back in 2003. But when it comes to EPR compliance, for instance, there is no minimum threshold, which means that corporations and the smallest of businesses—whether they’re fledging record labels hawking tapes on Bandcamp or hobbyists selling handicrafts on Etsy—are essentially subject to the exact same regulatory regime.

The problem is, while large businesses and high-volume sellers can theoretically absorb the added burden of complying with the PPWR, the imposition of thousands of euros in new annual compliance costs is going to be devastating for smaller sellers doing cross-market business in the EU. Add in the time and effort required to maintain compliance across 27 different countries, and many businesses may be forced to question whether continuing to operate is even financially possible.

Let’s do a little thought experiment:

Imagine a small record label, anywhere in the world, that sells 20 records per year to Germany. If that same label wants to be EPR compliant and finds an Authorized Representative that charges €300 per year, that brings an additional cost of €15 for each record sold. That’s completely unsustainable, and even if the label in question sells 100 records in a year to Germany, it’s important to remember that most releases already have razor-thin margins; an additional cost of €3 per record is enough to drive most successful projects into the red. And that’s just for Germany! If this exercise is extrapolated across all 27 EU member states—many of which have significantly smaller music markets—the math starts to get ugly very quickly.

Some of these compliance costs can potentially—and most likely will—be passed along to consumers, but with shipping costs already high and continuing to rise, further price increases are bound to stifle sales. And when it comes to smaller EU countries, where the sales figures are lower and the compliance costs are often higher, the idea of trying to offset the financial burden of PPWR by tacking on an additional €10, €20 or €50 to every item sold simply doesn’t make sense. What’s more likely is that small sellers will begin to pull out of these markets altogether; some might even decide that trying to sell things anywhere in the EU simply isn’t worth the hassle.

Considering the sheer volume of packages that are already being processed by postal services around the world, small sellers—many of whom already skirt official rules and regulations, doing things like marking all of their mailouts as gifts—may be tempted to ignore the PPWR. After all, it’s not like postal services are asking for proof of EPR compliance every time a package is sent, so sellers, particularly if they’re in the EU, theoretically have a decent chance of avoiding detection, especially if they’re using PPWR-compliant shipping materials. (Sellers outside of the EU, on the other hand, face a different situation; while no widespread reports of PPWR-related procedural changes have surfaced yet, it’s not difficult to imagine customs officers folding EPR compliance checks into their routine screening process—and either flagging or outright rejecting shipments from noncompliant entities before they even reach the European market.)

Regardless of where a seller is located, conflating minimal enforcement levels and a low risk of being caught with an actual lack of legal responsibility is an exceedingly risky strategy. Although PPWR enforcement methods vary from one country to the next, the penalties for non-compliance can be severe. In Germany, for example, violators can legally be fined up to €200,000 for the most severe offenses, and even more routine infractions, such as failing to sign up for the country’s centralized packaging registry, can incur fines of up to €100,000. Many other EU members have implemented similarly imposing penalty schemes, and also reserve the right to A) ban noncompliant entities from selling in their countries altogether and B) audit those entities’ shipping histories, assessing additional fines and requiring the backpayment of uncollected fees—plus interest.

As intimidating as those fines and penalties are clearly meant to be, sellers are also starting to be pressured by the very platforms that they rely upon to sell their wares. Amazon, for instance, has already begun requiring all sellers to provide proof of EPR compliance in every country where they wish to sell goods. Other large-scale platforms are likely to follow suit, although music-focused hubs such as Discogs and Bandcamp have yet to do so, or even comment publicly about the PPWR.3 (The “Legal & Compliance” section of Bandcamp’s help page, however, does include a post addressing a different EU regulation, the General Product Safety Regulation, where the company specifically states that it cannot be listed as a seller’s Responsible Person.4 The PPWR is clearly another matter, but barring some sort of unexpected sea change, it’s hard to imagine the platform displaying a sudden willingness to assume the compliance responsibilities currently being shouldered by its users.)

At least for now, sellers are more or less on their own, and though PPWR-related Reddit threads aren’t exactly a reliable source of information, they do reflect a serious level of concern. Some online sellers—including a handful of artists and labels on Bandcamp—have already suspended sales within the EU, and given the general lack of clarity about how best to move forward, more will likely follow suit in the weeks and months ahead. For sellers that are already in the EU, one of the only ways to significantly reduce the impact of PPWR compliance is to limit sales to only the country in which they are based. This, of course, goes against the spirit of the single market, but for anyone running a small business, giving up on one of the EU’s defining economic characteristics might prove to be a more reasonable course of action than contending with EPR requirements.

In a very real way, the PPWR endangers the future viability of any online ecosystem in which direct-to-consumer sales to the EU play a major role. Oddly enough, this could prove to be a boon for music distributors and online stores. One quirk about the PPWR is that when artists and labels send their releases and merch in bulk to any sort of middleman (i.e. engage in a business-to-business transaction), the packaging used is classified as transport packaging, which eliminates most, if not all, of the aforementioned compliance responsibilities related to that shipment.

To be clear, the responsibility for compliance doesn’t simply vanish in this scenario; it’s merely passed on, and ultimately falls on whatever entity eventually sells the items in question to members of the public. Contending with the PPWR will likely prove to be challenging for almost any business, but record shops—whether they exist as physical stores or solely as online hubs—are theoretically taking in so much revenue and processing such a large volume of orders that they can more realistically fold the increased costs and workload of EPR compliance into their existing business models. This is a situation where size truly matters, and while the prospect of absorbing a new annual cost of €16,000—and that’s just to have Authorized Representatives in every EU member country—is still going to be a dealbreaker for many smaller record shops, there’s little question that retailers are generally going to be better positioned to navigate the PPWR than the individual artists and labels whose music sits on their shelves.

Almost anytime a new law or regulation comes into effect, there are economic winners and losers. In the case of the PPWR, it’s nice to think that some record shops and distributors might wind up on the winners list—after all, many of those businesses have been visibly struggling throughout the digital and streaming era. But in the grand scheme of things, it’s the largest retailers and online sales platforms that will come out ahead, simply because their scale will blunt the impact of the PPWR’s new regulatory burden. There’s a depressing irony in the fact that a new set of environmental rules, which were ostensibly designed to rein in the wasteful practices of corporate actors, may ultimately wind up bolstering the economic position of those very same actors, at least within the EU.

As of right now, the answer is unfortunately “not much.” The PPWR is already in effect, and there is no grace period allowing those affected to gradually adjust to the new rules. It took years to craft and approve these regulations in the first place, and any effort to amend them is likely to be a similarly slow endeavor. What’s more, the stated intent of the PPWR—that is, the reduction of packaging waste—is something that the majority of the public, especially in the EU, would likely support. Pretty much everyone has at some point seen an oversized Amazon package in which a tiny item is surrounded by dozens of plastic air pillows. The wastefulness of that is obvious, and in a time when the impact of climate change is becoming harder and harder to ignore, any effort to eliminate environmentally reckless business practices will seem not just necessary, but righteous.

Against that backdrop, turning the tide of public opinion isn’t going to be easy. The streaming era has already demonstrated that addressing the plight of independent artists and labels isn’t much of a priority for most people, and given that most modern consumers are primarily interacting with music via platforms like Spotify, YouTube and TikTok, the loss of direct-to-consumer sales of tapes, vinyl and other merch is unlikely to register as an urgent crisis. For any movement to amend the PPWR to succeed, it’s going to have to go well beyond the music world—activating the Etsy masses would probably be a good place to start—and on a more basic level, it’s going to require a multi-pronged approach.

One of those prongs involves simply speaking up. Getting a handle on the PPWR isn’t easy—there’s obviously a lot of jargon involved, and conversations about not just packaging waste, but the regulation of packaging waste, aren’t exactly sexy or algorithm-friendly—but unless people start talking about this topic and actively pressuring others to do the same, it’s doubtful that the EU will be motivated to make changes on their own. Press outlets, both in the music world and the mainstream media, should be encouraged to cover the PPWR and dig deeper into its potential impact. (From an editorial standpoint, any story about poorly designed government regulation endangering small business seems like a no-brainer, both in terms of being newsworthy and something that will get audiences fired up and stoke engagement online.)

For those looking to take more formal action, there’s also the option of reaching out directly to politicians. That can of course be done on an individual basis, but earlier this month, the EU Commission initiated a five-week window in which the public—including people outside of Europe—can share their thoughts on the PPWR. That window will remain open until September 10, but more than 5000 comments have already been made, and most of them seem to be calling for the new regulations to be reformed. Some of the most common suggestions include:

• The establishment of a minimum threshold, one that would effectively exempt all businesses below a certain size and / or revenue level from at least some of the PPWR, particularly when it comes to EPR compliance.

• In lieu of total exemption, the creation of a separate tier for small businesses in which the ongoing costs and bureaucratic burden of the PPWR are significantly reduced.

• The adoption of uniform EPR rules and procedures across the entire EU.

• The establishment of an option for sellers to sign up for a single, PPWR-related registration that covers the entire bloc, and also designate a sole Authorized Representative who’s responsible for EPR compliance throughout the EU. (For sellers who are already located in the EU, especially those whose size and / or revenues sit below a certain threshold, the Authorized Representative requirement could also be eliminated altogether.)

Long story short, most people affected by the PPWR aren’t looking to completely scrap it. They do, however, want these new regulations to be applied in a way that isn’t disproportionately burdensome to small sellers. In the music world, many independent artists and small labels are already operating at a loss, or barely scraping by, and it seems ludicrous that a DIY operator who’s doing limited runs of 100 cassettes or 50 t-shirts is now being slapped with the same packaging-related rules and compliance requirements as Amazon and other corporate giants.

Obviously there’s a middle ground between those two extremes, and debates can be had about exactly who should and shouldn’t be exempted from certain provisions of the PPWR. But as things stand now, a huge swath of sellers—many of whom don’t even know what the PPWR is yet—are in a position where they might wind up deciding that doing business in the EU is no longer worth it. Even worse, some of those sellers might decide to shut their doors altogether. Being forced to use recycled and less wasteful packaging materials is one thing, but not many artists and labels got into the music game so they could contend with an expensive bureaucratic quagmire.

First Floor is published and overseen by Shawn Reynaldo, a freelance writer, editor, presenter and project manager. Find him on LinkedIn and Instagram—and make sure to follow First Floor on Instagram as well—or you can just drop Shawn an email to get in touch about projects, collaborations or other potential opportunities.