Overview of particularly important potential revisions

Scope of the Draft-GPSR / Definitions

• The Draft-GPSR explicitly expands the personal scope of application and explicitly introduces certain obligations for so called “economic operators” The Draft-GPSR's definition of economic operators is rather broad and means "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 manufacture of products, making them available on the market in accordance with this Regulation".

• In addition to extending the personal scope, the Draft-GPSR’s also expands the definition of a “product” which now also includes interconnected “items” that are supplied or made available on the market in the course of a commercial activity including in the context of providing a service. With this clarification the proposal aims to tackle the rapid development of new technologies and new risks linked to connectivity as e.g. IoT devices.

• According to the Draft-GPSR a product shall be presumed “safe” if it conforms with European Standards or national requirements. In absence of such standards or requirements Article 7 of the Draft-GPSR sets out a variety of aspects for assessing the safety of products, notably for example “appropriate cybersecurity features”.

• Furthermore, any natural or legal person that “substantially modifies the product” will be considered a manufacturer, and therefore will be subject to the obligations of the manufacturer. Insofar, Article 12 (2) of the Draft-GPSR establishes three main criteria to determine whether a modification has to be considered “substantial”.

• As known from other EU Regulations the Draft-GPSR requires a “responsible person” for every product placed on the Union market.

• Article 20 of the Draft-GPSR newly governs the specific obligations of online marketplaces in regards to product safety. For example the Draft-GPSR requires online marketplaces to register with the so called “Safety Gate Portal” and to cooperate with market surveillance authorities, amongst others, to ensure effective product recalls.

New procedural requirements / Form for recalls / Remedy rights for consumers

• If a manufacturer receives complaints which identifies one of the products as dangerous which it placed on the market, the Draft-GPSR formally obligates the manufacturer to investigate these complaints and keep a register respectively. To be able to receive such potential complaints manufacturers will need to make communication channels publicly available to consumers for this purpose.

• Every economic operator needs to have internal processes for product safety in place, so that they can “respect the general safety requirement” of the Draft-GPSR.

• Additionally, the Commission may require an economic operator to establish a system of traceability for certain products which are susceptible to bear a serious risk to health and safety of consumers. A product shall be made traceable by collection and storage of data to be able to identify in particular the product or its components as well as any economic operators involved in its supply chain.

• Under the Draft-GPSR a recall notice could no longer be freely constructed by the economic operator. Article 34 of the Draft-GPSR sets out the form of a recall notice and the elements which need to be included.

• Additionally, the Draft-GPSR includes a general “right to remedy” of the consumer in case of a product recall whereas the economic operator shall either repair or replace the product or refund the value of the recalled product. It remains to be seen how such an independent right would influence and interact with Member States national civil law schemes including warranty provisions as well as statute of limitations in case a defect in a product occurs.

Stricter notification obligations / Strengthened authorities’ rights / Penalties

• The current Draft-GPSR provides for a tightening of the notification obligations. In doing so, Article 19 obliges the manufacturer to inform the authorities in case of an "accident" within two working days from the moment it knows about the accident. In this context, the importance of the Safety Business Gateway should also be strengthened.

• In addition to actions taken by market surveillance authorities the Draft-GPSR in its current form would enable the Commission itself to take appropriate measures if it becomes aware of a product presenting a serious risk to the health and safety of consumers.

• To ensure coherent decisions of market surveillance authorities of different Member States the Draft-GPSR introduces an Arbitration mechanism if market surveillance authorities of different Member States come to a different conclusions regarding the risk level of a product. This mechanism could be an option for economic operators to change the assessment of a market surveillance authority, but only if economic operators would also be granted a possibility to formally initiate the mechanism in some way. As of now the Draft-GPSR only offers the “right to request” an Arbitration to the Member States.

• Article 40 of the Draft-GPSR states that Member States shall lay down the rules on penalties applicable to infringements of this Regulation and shall take all measures necessary to ensure that they are implemented. In doing so, the Draft-GPSR establishes criteria which the Member States shall take into account for the imposition of penalties. In particular, in the case of fines, the maximum amount of penalties shall be at least 4 % of the economic operator’s or online marketplace’s annual turnover in the Member State or Member States concerned.

Next steps

The Draft-GPSR is a first step in a likely long legislative procedure and might be subject to substantial changes along the way. In particular, the Draft-GPSR still has to be submitted to and approved by the European Parliament and the Council.

We will monitor the proceeding closely and keep you updated about relevant developments.