Green light for new product safety rules affecting online marketplaces

In brief:

The EU legislators have now reached agreement on the final text of the new General Product Safety Regulation (GPSR), which will replace the current General Product Safety Directive and further harmonise consumer product safety rules across EU Member States.

Among the key changes are new obligations on operators of online marketplaces. These include increased market surveillance requirements and obligations to notify competent authorities and consumers about product safety issues, on very tight timescales.

The new rules, which are aligned with wider changes to the EU digital services and product liability regimes, are expected to apply from late 2024.

In more detail: 

Against all odds, on 28 November 2022, the Czech Presidency of the Council managed to close a political deal on the GPSR. After several months of technical meetings and lawyer linguist translations, Members of the European Parliament (MEPs) gave the green light to the final text on 30 March 2023.

The final text received an overwhelming support from MEPs, with 569 votes in favour and only 13 against. This approval marks almost the final formal step in the EU legislative process before new obligations for online marketplaces which consumers often use for their online purchases enter into force.

In this post, we analyse the main sticking points from the discussion in trilogues, as well as the key obligations for online marketplaces – which shall be aligned with those included in the Digital Services Act (DSA) - ahead of its upcoming publication in the EU Official Journal.  

Key highlights from the discussion in trilogues

In less than three months (near-record time), the Czech Presidency of the Council was able to land a compromise on product safety rules among MEPs, European Commission officials and Member States in the Council of the EU.

After 15 technical meetings and three political trilogues, the Czech Presidency ironed out the details of the compromises reached on the key sticking points of this legislative text. While this was not an easy task, they succeeded in giving some concessions to both co-legislators.

The Council of the EU was granted its preferred wording on penalties by which Member States are given complete discretion in its application, as long as they are proportionate, dissuasive and effective. The European Parliament’s proposal regarding mystery shopping– according to which inspections of products while using a cover identity would need to be conducted – was also included in the final text.

At a time in which the EU keeps negotiating and implementing new rules in the technology sector, negotiators were inclined to make sure that rules under this file were closely aligned with the obligations arising from other pieces of legislation, such as the DSA, especially when it comes to online marketplaces.

New obligations for online marketplaces

As trailed in our previous blogpost on the GPSR, one of the key changes introduced by the Regulation is the introduction of additional obligations for online marketplaces, designed to ensure that consumers do not buy dangerous products online. This includes a general obligation for online marketplaces to ensure they have the right internal processes for product safety in place to be able to comply promptly with all the requirements of the GPSR.

These obligations are intended to align with the DSA, which introduced several new requirements for digital service providers. Indeed one of the requirements of the GPSR is to provide the safety information needed to comply with certain articles of the DSA. They also align with proposed revisions to the Product Liability Directive, which, in some circumstances, will impose civil liability on operators of online marketplaces which sell defective consumer products (see further here).

Article 20 of the GPSR places the following types of obligation on online marketplaces providers:

• market surveillance authorities will have the power to require providers to remove, disable or display warnings on content offering dangerous products, and providers must act upon orders issued by market surveillance authorities within two working days;
• providers must directly notify consumers of product safety recalls and safety warnings;
• providers must immediately inform market surveillance authorities of dangerous products offered through their marketplace of which they have actual knowledge;
• providers must register with the Safety Gate portal, by which information on dangerous products will be provided, and use it e.g. when conducting random safety spot-checks on the products offered on their digital marketplace (as required under the DSA);
• providers must process product safety notices (provided under the DSA) which relate to products sold on their marketplace within three working days;
• providers must organise their online interface so that traders can provide certain minimum information to consumers on a product (including manufacturer details);
• providers must generally cooperate to facilitate safety measures being taken in relation to products offered on their marketplace.

There are concessions in the Regulation to some of the technical difficulties that these obligations might pose for online marketplace providers. For instance, when a provider is ordered to remove content referring to a dangerous product offering, the provider can only be required to remove other identical content “in a proportionate manner by reliable automated tools”; the provider will not independently have to assess the targeted content.

Looking Ahead

Following the overwhelming approval of the file by the European Parliament’s plenary on 30 March, the Council is expected to formally adopt these new product safety rules in April. This piece of legislation will enter into force 18 months after its publication in the EU Official Journal, which is expected to happen in the coming weeks. The new rules are expected to take effect in late 2024.

By 2031 The Commission will carry out an evaluation and publish a report assessing whether the protection of consumers against dangerous products has been enhanced with this piece of legislation while taking into account the challenges posed by new technologies.