Key facts
- Shopify will ban all vape products from its platform as soon as this week.
- The decision comes after pressure from a coalition of 25 U.S. state attorneys general.
- The attorneys general are targeting the sale of illegal e-cigarettes online.
- Unlicensed vapes are widely available in the U.S. despite being illegal to import or sell.
- Mastercard has also warned partners that unlicensed vape sales violate its network standards.
Shopify Inc. is set to ban all vape products from its e-commerce platform as early as this week, according to sources familiar with the matter. This move comes after sustained pressure from a bipartisan coalition of 25 U.S. state attorneys general who are seeking to curb the booming market for illegal e-cigarettes sold online.
The Ottawa-based company, which provides the infrastructure for millions of merchants, has been in discussions with the state officials since last year. The attorneys general are concerned about the public health risks posed by unlicensed vapes, many of which are manufactured in China and are widely available in the U.S. despite lacking the necessary import or sales licenses.
A Shopify spokesperson stated that the company prohibits illegal activity and adjusts its enforcement approach when legal changes require it, adding that such decisions are based on global legal frameworks and not solely on feedback from any single group. The ban is expected to disrupt e-commerce sales and potentially have a significant impact on sellers of these products.
The illegal U.S. vape market is estimated to be worth $9 billion, according to British American Tobacco, which has seen its business affected by the proliferation of these illicit products. The U.S. Food and Drug Administration has only authorized a limited number of e-cigarette products for marketing, a situation that some argue has fueled the illegal market.
Separately, Mastercard has issued a global notice to its partners, including merchant acquirers, warning that unlicensed vape sales violate its network standards. The company indicated it would investigate and potentially impose fines on retailers and acquirers that fail to comply with its requirements, emphasizing a zero-tolerance policy for unlawful activity on its network.