Regulatory and compliance

European Parliament publishes amendments to EU Product Safety Regulation

Published on 18th Jan 2022

Significant narrowing of the scope and application of the General Product Safety Regulation is proposed

In the summer of 2021, the European Commission proposed reforms to the General Product Safety Directive with the introduction of the General Product Safety Regulation (GPSR). The GPSR provides significant and far-reaching reforms which increase the compliance obligations on businesses involved in product supply chains. The GPSR also addresses new technologies, and aims to improve product safety online through additional coverage of online marketplaces. (For more about the reforms, see our previous Insight).

The European Parliament has now published its draft amendments to the proposal, with some significant changes to the scope and application of the GPSR. Some of the amendments that merit particular attention are those that narrow the scope and encourage a risk-based approach to regulation and enforcement; affect the obligations around traceability; and affect the interplay between this regulation and other reforms with a digital product safety element.   

Narrowed scope and risk-based approach

The Parliament has proposed narrowing the definition of an online marketplace to prevent application of the GPSR to online sales between consumers, and there is a consistent trend of amendments that encourage a flexible, risk-based approach.

The motivation behind these changes is to avoid placing unnecessary compliance burdens on small and medium enterprises, and to allow a more proportionate approach to be taken by regulators when dealing with small producers and low risk products. 

References to environmental risks as well as to physical, mental and social well-being are removed by the proposed amendments, further narrowing the scope of the GPSR. The Parliament's view is that these aspects, as an element of product safety, would not be able to be assessed by businesses or regulators. The GPSR will focus specifically on product safety issues. However, this does not mean that the EU is not prioritising the well-being impacts and risks that may be associated with products: these issues are likely to be tackled more directly through separate legislation associated with the European Green Deal. 

The Parliament has proposed that businesses should be able to provide certain information about products – for example, contact details, instructions and safety information – via electronic means such as a QR code.

The amendment is intended to ease the burden of new traceability and technical documentation obligations. Providing the new information digitally will avoid infringing on often very limited labelling and packaging space, and ease the administrative demands of compliance with the GPSR. 

Online marketplaces 

Interestingly, the Parliament's report states that it sees the GPSR as being fully compatible with other new legislation with product safety elements, such as the Digital Services Act which will also impose new obligations on online marketplaces: the GPSR should act as the overriding legislation for product safety issues (lex specialis), taking priority over other legislation which may have overlapping or parallel scope.

The EU (and UK) have a strong focus on online marketplace compliance, and this priority is reiterated throughout the European Parliament's proposed amendments: it has introduced additional targeted obligations on online marketplaces relating to communications with merchants and consumers in relation to product safety issues. There will also be expanded obligations on online marketplaces to respond to regulators within five working days following receipt of notices related to accidents or safety issues regarding products offered for sale through their services. 

These new obligations will place additional burdens on online marketplaces to communicate with their users (both consumers and merchants), as well as respond to regulator queries on an accelerated timescale. 

Other significant amendments 

Other significant changes to the original draft of the GPSR that the European Parliament has recommended include:

  • That the EU Product Safety Pledge be reproduced in the GPSR as a voluntary commitment that can be made by online marketplaces, to encourage additional platforms to sign up to its provisions.  
  • Expanded duties for online marketplaces to align with economic operators responsible for products, requiring businesses to contact customers directly to inform them of product recalls or safety warnings related to products which have been purchased. 
  • The concept of "reasonably foreseeable misuse" has been deleted from the definition of a safe product. The Parliament has stated that: "While it is possible to test for reasonably foreseeable use, it is not for reasonably foreseeable 'misuse'. Reasonably foreseeable is subjective and as this Regulation governs all consumer products and not a limited sub-set (i.e. the Machinery Regulation), what is reasonably foreseeable for one person, is not for another and therefore it is not possible to have a standard test for an unknown. Moreover any product can be dangerous if misused". 
  • Traceability information provided with a product will include name of the manufacturer, registered trade name or trade mark, postal address and the website or email address at which they can be contacted. 
  • Removing the requirement to make a regulatory notification within two working days of a manufacturer being made aware of an accident, and changing this to allow businesses to investigate a reported accident. Following the results of an investigation which shows that an accident was caused by a product presenting a risk to the health and safety of consumers, businesses will have two working days to make a regulatory notification. This will avoid the need to report unsubstantiated accidents to regulators, but is still likely to reduce the current lag between an accident occurring an a notification being made. 
  • Clarifications to penalty provisions to reflect the need for penalties to be proportionate, and to require Member States to "name and shame" economic operators or online marketplaces who have been found to be in breach of the GPSR each year. 
  • When products are recalled, calculating their value on the basis of the initial purchase price paid by consumers. 
  • The implementation period for application of the Regulation to be extended from 6 to 12 months, to reflect the significant changes the GPSR will represent for businesses.

Osborne Clarke comment

When proposed by the Commission last year, the GPSR set out radical reforms to the EU's product safety regime, with dramatically changed obligations for all parts of a supply chain. The Parliament's proposed amendments retain the significant modernisations of the Commission's proposal, but clearly show that thought has gone into the practicalities of businesses being able to comply with the regulation. As with other legislation, a focus on requirements being proportionate and risk-based will prevent small and medium enterprises from being stifled by legislation intended to curtail activity of the biggest industry players.

Similarly, changes such as the ability to include traceability information on a QR code, and allowing businesses to investigate and substantiate a reported accident before needing to make a notification are sensible amendments which will help avoid the reforms imposing unfeasible or impractical requirements.

At the same time, the Parliament is clearly not seeking to soften the GPSR's impact on the industry. An obligation to "name and shame" businesses which have breached product safety requirements each year, along with the significant "GDPR-style" penalties, represents a very real threat to businesses like online marketplaces which have, until now, existed somewhat outside the remit of EU product safety law.

Osborne Clarke will continue to publish analysis and summaries of changes as the GPSR progresses. Please register for Regulatory and Compliance updates to ensure you are among the first to receive these.

This article was produced with the assistance of Charlie Hennig, paralegal

 

 

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* This article is current as of the date of its publication and does not necessarily reflect the present state of the law or relevant regulation.

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