Proposal for a General Product Safety Regulation

Introduction

According to the European Commission ("EC"), the General Product Safety Directive ("GPSD") is outdated and no longer sufficiently effective to ensure consumer protection. Therefore, the EC adopted a proposal to reform the GPSD with a new regulation. The proposal for a new regulation ("the Proposal") focuses on the safety of products related to new technologies and on the challenges posed by the growth of online sales, ensuring more efficient and uniform market surveillance and improving the recall of dangerous products. If the Proposal is adopted by the European Council and the European Parliament, it will replace the GPSD.

Evaluation of the GPSD

The GPSD has shown to be a successful instrument in ensuring a high level of consumer protection. Its adoption in 2001, however, took place when there were hardly any new technological products and interconnected devices. Current technological developments are putting the current definition of product safety to the test, introducing new risks or modifying the way these risks can occur (e.g. cybersecurity with implications for product safety). Further issues arise from increasingly widespread online sales, with new economic operators selling products online. In addition to technological developments and increasing number of online sales, the EC prioritises protection of vulnerable consumers, especially after the COVID-19 pandemic during which consumers purchased even more products online. For these reasons, the GPSD is subject to revision. 

New Consumer Agenda of 2020

The Proposal adopted by the EC is in line with the New Consumer Agenda of 2020, which aims to update and modernise the general framework for the safety of non-food consumer products, preserve its role as a safety net for consumers, adapt the provisions to challenges posed by new technologies and online selling and guarantee a level playing field for businesses. Some of the key changes proposed by the EC are regarding online sales and the scope of the Proposal, the Safety Network, product recalls and market surveillance.

Key changes

Below we summarize the key changes presented by the Proposal:

Online sales

'Online marketplaces' must take more responsibility in tackling the sale of dangerous products online.

Emerging technologies

In the Proposal certain definitions, like 'product' and 'safety', have been expanded to regulate new technologies. The Proposal introduces obligations for 'economic operators' being the manufacturer, the authorized representative, the importer, the distributor, the fulfilment service provider or any other natural or legal person who is subject to obligations in relation to the manufacturer of products, making them available on the market in accordance with the Proposal.

Safety Network

The Proposal also seeks to make EU market surveillance more effective by setting up a consumer safety network to exchange information and cooperation with tracing and recalling dangerous products. Online marketplaces need to register with a 'Safety Gate Portal' and cooperate with market surveillance authorities.

Product recall

Furthermore, the Proposal strives to increase the effectiveness and efficiency of product recalls in the EU. Examples are:

• Economic operators will be obligated to issue a notification of an 'accident' in the Safety Business Gateway within two working days after becoming aware of the accident;

• The EC may request an economic operator to establish a system of traceability for certain products if the products present a significant risk to health and safety of consumers;

• The recall notice must meet specific requirements (a description of the product including a photograph, the name and brand of the product, a clear description of its hazards, etc.) and terms such as 'precautionary' or 'voluntary' will be prohibited;

• In case of a recall, the economic operator responsible for the recall must offer the consumer an effective, cost-free and timely remedy.

Market surveillance

Member States may impose their own measures in the event of a breach of the proposed regulation. Market surveillance authorities will be able to impose high fines for companies who are not compliant. Fines of up to 4% of the annual turnover of the economic operator or online marketplace in the Member State(s) can be imposed, whereas such an authority was not yet included in the GPSD.

Criticism

The feedback received during the consultation period was relatively positive. However, some organisations believe that imposing significant new restrictions or bans on certain products would be detrimental to trade and to those companies that adhere to fair and proportionate rules.

On 3 September 2021, the Dutch government informed the House of Representatives about the Proposal. The Dutch Government is generally positive about the Proposal. Points of criticism include the far-reaching harmonisation and simplification of existing legislation and deviation from specific product directives. Specifically, the Dutch Government pointed out that it is not entirely clear when an AI-product must meet the Regulation requirements and that the legislative process of the AI-Regulation has not yet been completed. The relationship between de AI-Regulation and the Proposal should therefore be clarified.

Conclusion

The Proposal for a Regulation on product safety provides certain fundamental revisions to the existing EU product safety framework. The Proposal mainly establishes substantial changes to the scope of the Regulation, new procedural requirements for product recalls, stricter notification obligations and enhanced rights of authorities to impose sanctions. If the Proposal is approved by the European Parliament and the European Council, companies need to adapt current practices in order to be compliant with the rules and avoid being sanctioned by market surveillance authorities.