European Commission adopts proposal to revise and replace the 2001 General Product Safety Directive

EU – Ecommerce

The European Commission has adopted a proposal to amend the 2001 General Product Safety Directive (GPSD) which provides the legal framework for the safety of non-food consumer products. The new Regulation aims to address new technologies, such as artificial intelligence, as well as the rise in e-commerce which has hampered the effectiveness of the GPSD.

Key date(s)

• 13 February 2013 – The European Commission adopted a proposal to introduce new consumer product safety regulations which was blocked in the European Council due to a disagreement between Member States on country of origin labelling.
• 23 June 2020 – The European Commission runs parallel evaluation and consultation questionnaire periods seeking input on a combined evaluation roadmap and inception impact assessment on the General Product Safety Directive (the “GPSD”).
• 30 June 2021 – The European Commission adopts a proposed Regulation to revise and replace the GPSD (the “Regulation”).

Status

• The GPSD, viewed as a safety net for consumers, provides the EU legal framework for the safety of non-food consumer products to the extent that other EU legislation does not include specific provisions with the same safety objective. The GPSD also established the ‘Rapid Alert System’, in which Member States send alerts to the ‘Safety Gate’ if they detect dangerous non-food products in order to enable swift information exchange and the removal of dangerous products.
• Following a failed attempt to overhaul the GPSD (and associated market surveillance activity legislation) in 2013, the European Commission as part of its regulatory fitness and performance programme determined to continue with the its intention to modernise the GPSD.
• On 23 June 2020, the European Commission released its combined evaluation roadmap and inception impact assessment which recognised the GPSD's success as a safety net for consumers but also documented shortcomings. These included advances in technology that are not explicitly addressed in the GPSD, including artificial intelligence, as well as the rise in e-commerce which has decreased the effectiveness of the GPSD. Parallel feedback and consultation periods were then run until Autumn 2020.
• Following the feedback, the European Commission proposed the Regulation (as well as associated legislation regarding consumer credit), which will replace the GPSD, and seeks to address the GPSD’s shortcomings.
• The Regulation will now proceed through the standard EU legislative procedure.

 What it hopes to achieve

• The GPSD aims to ensure that only safe non-food products end up in the hands of consumers and, due to the difficulty in adopting legislation for all non-food consumer products that exist or may be developed, the Regulation aims to provide a horizontal legislative framework to fill any gaps, ensuring a high level of protection for the health and safety of consumers.
• The Regulation looks to further build on the GPSD by updating and modernising it (in relation to issues such as new technologies and online selling, as well as new health risks including psychological and developmental risks, or the loss of sleep and altered brain function) while preserving its role as a safety net for consumers and continuing to ensure a level playing field for businesses (in particular in relation to EU retailers and operators based in third countries).
• The Regulation also aims to place increased due diligence obligations on online marketplaces, simplify and strengthen market surveillance by providing authorities with additional powers to reduce risk, and improve the effectiveness of product recalls.

Who does it impact? 

• Consumers whose health and safety (and where relevant, privacy) rights will be protected, but for whom the cost of non-food consumer goods sold online may increase.
• Businesses who will face additional compliance costs, although these are estimated to be comparatively low in comparison to turnover, according to the European Commission’s discussion regarding the Regulation.
• Online marketplaces who will face more stringent due diligence requirements.
• EU retailers who should experience a more level playing field with distance sellers from third countries

Key points 

1. Broader Definitions

• • The Regulation expands the scope of the GPSD with broader definitions of ‘product’ and ‘safe’ alongside new definitions such as ‘substantial modification’.
  • These variously look to: address novel safety risks for items such as ensuring that software is updated; shift the risk where a party makes a material change to the product from the manufacturer to the modifier; extend the concept of who is responsible to include direct imports from third countries; and introduce a more stringent system of traceability along the supply chain.

2. Obligations of online marketplaces

• • The Regulation would bring online marketplaces within the ambit of the GPSD and place on them obligations including: direct communication with Member States' market surveillance authorities; registering with the Safety Gate portal; removing content from online interfaces which is flagged to contain dangerous products; and undertaking sufficient due diligence.

3. Market surveillance and sanctions

• • The Regulation intends to give Member State regulatory authorities additional powers to reduce risk such as to require the removal of online content from an online interface, ensure that warnings are displayed to end-users when they access an online interface, and issue fines up to 4% of an infringing business’ annual turnover in the Member State where the infringing activity occurred.

4. Product recalls
   • The Safety Gate system has been expanded and strengthened with notifications of corrective measures expected to be submitted within two days, stronger obligations on parties (including online marketplaces and potentially third countries) to take steps to complete a recall by way of notices, and a more standardised approach to recall.

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