European Product Act: EU plans biggest overhaul of product safety law in two decades

 

The European Commission is on the verge of publishing the European Product Package – a legislative package that will fundamentally recast 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 are on the horizon for industry and trade in Europe. Together, these two draft regulations form the European Product Package and are intended to come into effect as directly applicable law in all Member States.

What does the European Product Act govern?

The EPA is intended to merge 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, ranging from placing on the market and market surveillance to refurbishment and reuse. With this step, the Commission is 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 analogue CE marking – neither of which is now in keeping with the times.

Outline of key changes

• Digital Product Passport (DPP): In future, harmonised products will have to be issued with a digital product passport that 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, repairers and recyclers.

• Digital CE marking: Following a five-year transition period, the physical CE mark will be replaced by a digital mark added to the DPP. The digital CE mark 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: It will not be possible to place a product on the market without a responsible economic operator who is established within the EU. Authorised representatives will also have to take out professional indemnity insurance.

• Extensive obligations for platforms: Online marketplaces will be required to verify the DPP before product listings go live, to automatically remove non-compliant listings and to prevent them from reappearing. In the event of breaches of obligations or the absence of a responsible operator in the EU, the platforms themselves will assume the role of authorised representative.
• Circular economy: For the first time, refurbishers will be classified in a separate category of obligations and will have their own compliance and documentation requirements.
• Direct EU enforcement: For the first time, the Commission will be granted its own powers to investigate and enforce in the event of systemic infringements – including the ability to purchase product samples undercover, carry out tests and impose fines of up to 6 per cent of global annual turnover. This is permitted where non-compliant products from non-EU (“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 will be introduced before articles are released for free circulation on the market. To finance the stepped-up market surveillance, an EU market surveillance fee is to be levied on each item imported.

What changes are being made to standardisation?

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

• Faster standardisation: Binding deadlines and the option to entrust standardisation tasks not only to the traditional European standardisation organisations (CEN, CENELEC, ETSI) but also to other designated standardisation bodies are intended to significantly shorten the time taken to develop standards.
• Free access to harmonised standards: In future, referenced standards and standardisation outputs will have to be available online without restrictions – a direct response to ECJ case law.

• 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 Europe’s influence in international standardisation. In addition, a new EU Standards Platform will be created to provide transparency on the current status of requested standards.

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

A new era for product safety and a wake-up call for industry

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 direction is clear: digitalising compliance, closing enforcement gaps in e-commerce and for imports from non-EU 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 of action:

• IT infrastructure and data strategy: The introduction of the DPP requires companies to set up 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 start taking stock at an early stage.
• Supply chain contracts and allocation of responsibility: As it will be mandatory to designate a responsible economic operator based in the EU, existing importer and distribution contracts should be reviewed to determine whether they need to be amended. Where imports from non-EU countries are involved, the obligations of authorised representatives (including the new requirement to take out insurance) will be significantly expanded.
• New liability risks for platform operators: Online marketplaces that fail to meet their obligations to monitor and remove content will themselves be liable as responsible economic operators in future. This fundamentally alters the risk landscape for the entire online retail sector.
• Hefty sanctions: Fines of up to 6 per cent of global annual turnover imposed by both national authorities and the Commission itself raise product compliance to a penalty level previously associated more 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, especially for SMEs.

Although the drafts are still at an early stage of the legislative process, their level of detail (the EPA draft runs to over 220 pages) suggests that the Commission will be presenting an ambitious and well-thought-out package. For the period 2028 to 2034, the Commission is planning to commit around €472.6 million to the EPA alone.

Businesses – whether manufacturers, importers, retailers or platform operators – would be well advised to follow developments closely and prepare for the new requirements in plenty of time. Action is required across all sectors, mainly involving IT infrastructure for the DPP, compliance documentation and contractual allocation of responsibilities within the supply chain. We will continue to monitor the legislative process and keep you informed of relevant developments.