European Product Act: The EU is planning the biggest overhaul of product safety legislation in two decades

 

The European Commission is on the verge of publishing the so-called European Product Package – a legislative package that will fundamentally overhaul European product safety and conformity legislation. Leaked drafts of the European Product Act (EPA) and a new European Standardisation Regulation show that far-reaching changes lie ahead for industry and trade in Europe. Together, these two draft regulations form the so-called European Product Package and are intended to apply as directly applicable law in all Member States.

What does the European Product Act regulate?

The EPA is intended to consolidate three existing horizontal legal acts into a single regulation:

• Decision No 768/2008/EC (common framework for the marketing of products),
• Regulation (EC) No 765/2008 (accreditation and market surveillance) and
• Regulation (EU) 2019/1020 (market surveillance and product conformity).

The aim is to create a coherent, digitally oriented legal framework covering the entire product life cycle – from placing on the market through market surveillance to refurbishment and reuse. The Commission is thus responding to the fundamental changes that have taken place since 2008 as a result of digitalisation, e-commerce, complex global supply chains and the transition to a circular economy. According to the Commission’s explanatory memorandum, the current system still relies largely on paper-based compliance processes and an analogue CE marking – neither of which is now fit for purpose.

An overview of the key changes

• Digital Product Passport (DPP): In future, harmonised products must be issued with a Digital Product Passport, which can be accessed via a data carrier (e.g. QR code, RFID). The DPP contains product identifiers, technical documentation, environmental footprints and safety instructions – with tiered access rights for authorities, consumers, repair shops and recyclers.
• Digital CE marking: Following a five-year transition period, the physical CE marking will be replaced by a digital mark within the DPP. The digital CE marking is intended to link the manufacturer’s declaration of conformity directly to verifiable digital compliance data – a paradigm shift for the entire marking process.
• Responsible EU economic operator: No product may be placed on the market without a responsible economic operator established within the EU. Authorised representatives must also take out professional indemnity insurance.
• Comprehensive platform obligations: Online marketplaces will be obliged to verify the DPP before listings go live, to automatically remove non-compliant listings and to prevent their reappearance. In the event of breaches of obligations or the absence of an EU-based responsible economic operator, the platforms themselves assume the role of authorised representative.
• Circular economy: For the first time, refurbishers are classified as a separate category of economic operators, with their own compliance and documentation obligations.
• Direct EU enforcement: For the first time, the Commission is granted its own powers of investigation and enforcement in the event of systemic infringements – including the ability to purchase product samples covertly, carry out tests and impose fines of up to six per cent of global annual turnover. This applies provided that non-compliant products from third countries pose a threat to the market in at least two-thirds of the Member States and the national authorities fail to take action.
• New customs controls and EU market surveillance fee: At the external borders, automatic verification of the DPP prior to release for free circulation will be introduced. To finance the enhanced market surveillance, an EU market surveillance fee is to be levied per imported item.

What changes are being made to standardisation?

The new Standardisation Regulation, presented in parallel, is intended to replace the previous Regulation (EU) No 1025/2012 and addresses known weaknesses:

• Faster standardisation: Binding deadlines and the possibility of entrusting other designated standardisation organisations with relevant mandates, in addition to the traditional European standardisation organisations (CEN, CENELEC, ETSI), are intended to significantly shorten development times.
• Free access to harmonised standards: In future, referenced standards and standardisation outcomes must be available online without restriction and free of charge – a direct response to the case law of the Court of Justice of the European Union.
• New governance: A Chief Standardisation Officer and a Centre of Excellence on European Standardisation are to take charge of the strategic management of EU standardisation and strengthen European influence in international standardisation. In addition, a new EU Standards Platform will be created to provide transparency on the current status of proposed standards.

The Commission expects faster standardisation processes to generate annual savings for businesses of around 295 million euros, with a further 30 million euros resulting from the removal of paywalls for harmonised standards – savings that are likely to benefit SMEs in particular.

A new chapter for product safety – and a wake-up call for the business community

The European Product Package marks the most comprehensive reform of European product safety law since the introduction of the New Legislative Framework in 2008. The focus is clear: digitising compliance, closing enforcement loopholes in e-commerce and regarding imports from third countries, and consistently integrating the circular economy into the framework of obligations. Overall, the system will undergo a noticeable transformation from a decentralised, paper-based supervisory model to a centrally coordinated, digital enforcement regime.

For industry and trade, this gives rise to very specific areas for action:

• IT infrastructure and data strategy: The introduction of the DPP requires the development of high-performance digital systems for the creation, registration and ongoing maintenance of product passports – including the integration of environmental, safety and conformity data. Companies with complex product portfolios, in particular, should begin taking stock at an early stage.
• Supply chain contracts and allocation of responsibility: As it will be mandatory in future to designate a responsible economic operator based in the EU, existing importer and distribution contracts must be reviewed to determine whether they need to be amended. Particularly in the case of imports from third countries, the obligations of the authorised representative – including the new insurance requirement – will be significantly expanded.
• New liability risks for platform operators: Online marketplaces that fail to fulfil their obligations to monitor and remove content will themselves be held liable as responsible economic operators in future. This fundamentally alters the risk landscape for the entire online retail sector.
• Severe sanctions: Fines of up to six per cent of global annual turnover – imposed by both national authorities and the Commission itself – raise product compliance to a level of penalties previously associated with data protection law (GDPR) or the Digital Services Act.
• Opportunities through standardisation: Free access to harmonised standards and faster standardisation processes can reduce compliance costs and facilitate market access, particularly for SMEs.

The drafts are still at an early stage of the legislative process, but their level of detail – the EPP draft runs to over 220 pages – suggests that the Commission will present an ambitious and well-thought-out comprehensive package. For the period 2028 to 2034, the Commission is planning commitments of around €472.6 million for the EPA alone.

Companies – whether manufacturers, importers, distributors or platform operators – would be well advised to follow developments closely and prepare for the new requirements at an early stage. Action is required across all sectors and concerns, in particular, the IT infrastructure for the DPP, compliance documentation and the contractual allocation of responsibilities within the supply chain. We will continue to monitor the legislative process and keep you informed of relevant developments.