Recently, we wrote about the Digital Services Act, which will introduce new regulation for online marketplaces.  There are also new EU rules on the horizon about product safety, which will also affect online marketplaces. The Council of the EU and the European Parliament have reached a provisional agreement on updated product safety laws.  The new Regulation updates the existing Directive to require that products sold online and offline are safe and in line with European standards.

All products traded in the EU are already subject to general safety requirements. However, given digital and technological developments and the challenges related to digitalisation and the increasing volume of goods and products sold online, the current rules are considered no longer suitable.

So, what’s changing?

Obligations of economic operators and safety assessment

Under the new rules, a product can be sold only if there is an economic operator (such as the manufacturer, importer or distributor) established in the EU, who is responsible for its safety. When assessing product safety, risks to the most vulnerable consumers (e.g. children), gender aspects and cybersecurity risks must be taken into account.

New requirements for online marketplaces

The new Regulation introduces obligations for online marketplaces including designating a single point of contact for national surveillance authorities and consumers. National surveillance authorities will be able to require online marketplaces to remove or disable access to offers of dangerous products without undue delay and in any event within two working days. Providers of online marketplaces will have to make reasonable efforts to check randomly for dangerous products.

Recall, replacement and refunds

The new legislation improves the product recall procedure.  Currently, the EU says that return rates remain low, with an estimated third of EU consumers continuing to use recalled products.

If there is a safety recall or warning, economic operators and online marketplaces will be required to inform all affected consumers they can identify.  They also need to disseminate the information widely. Recall notices should avoid expressions that can decrease consumers’ perception of risk (such as “voluntary”, “precautionary”, “in rare/specific situations”).

If there is a recall and consumers return their goods, they must be clearly informed about their right to repair, a replacement or an adequate refund (at least equal to the initial price). They will also have a right to file complaints or launch collective actions. The rapid alert system for dangerous products (“Safety Gate” portal) will be modernised to allow unsafe products to be detected more effectively and will be more accessible for disabled people.

The provisional agreement needs to be confirmed by the Council and the European Parliament. Following the formal adoption of the Regulation and its entry into force, member states will have 18 months to apply the new rules, so we expect to be looking at late 2024 for this to come into effect.

How does it affect me?

The new rules will apply in Northern Ireland due to the Northern Irish Protocol.  UK traders doing business in the EU will also need to comply with the new EU rules.

The UK ran its own call for evidence seeking views on changes to the UK's product safety regime, including to address new methods of manufacture and distribution, new products and technologies such as artificial intelligence, and environmental considerations. The UK Government response identified the safety of products sold through online marketplaces as an area of the UK's product safety regime that requires urgent attention. The Office for Product Safety and Standards intends to publish its proposals for reform in due course.

The rules will add to the regulatory obligations for online marketplaces, which are already grappling with the new rules in the Digital Services Act.

If you need advice on your new obligations under the Digital Services Act or the new product safety rules, do contact us!