Even more new laws?
In recent years, the EU and UK have significantly heightened their focus on product safety requirements. Just a few examples from the EU include the new European Accessibility Act (“EAA”) and the Artificial Intelligence Act (“AI Act”) which have been introduced to address emerging technological risks and ensure comprehensive safety standards across various product categories. At a UK level, an example would be the introduction of the Product Security and Telecommunications Infrastructure (PSTI) Act 2022, which mandates stringent security measures for consumer connectable products.
This increase in new (or at minimum, extended) legislation in both the EU and UK, aimed at ensuring only safe products are placed on these markets, in turn heightens the risk of regulatory scrutiny. This is made all the more complex for companies trying to navigate the various requirements at play, by the ever-growing notion of what is meant by a ’product’, as well as what ‘safe’ means in this context.
The key trends we have identified in this space include:
A real focus on traceability: The introduction of the EU Market Surveillance Regulation enhanced traceability requirements by obliging companies to identify an EU entity in the supply chain before placing products on the EU market. Similar requirements have been introduced by the UK, which now mandates that a UK importer is identified before any product is placed on the Great Britain market.
Stricter reporting obligations: Pursuant to the General Product Safety Regulation (“EU GPSR”), which will replace the current General Product Safety Directive as of 13 December 2024, companies will need to comply with stricter reporting requirements. In particular, companies will need to report accidents caused by a product “without delay” where the incident has resulted in death or has serious adverse effects on health and safety. Similarly, whilst the EU GPSR, which was adopted post-Brexit, will not come into force in the UK, the UK Product Safety Review highlighted the importance of the notifications of recalls, serious product safety incidents and corrective actions, again suggesting that stricter reporting requirements may soon be applied in the UK too.
A watchful eye on online marketplaces: The EU GPSR has also significantly enhanced the obligations of online marketplaces, which are now required to, among other things, cooperate with authorities, register with the EU Safety Gate Rapid Alert System and designate a single point of contact if they wish to sell goods in the EU. Similarly, as part of its wider UK product safety review, the UK’s Office for Product Safety and Standards (the “OPSS”) proposed enhancing obligations for online marketplaces, including with respect to co-operating with enforcement authorities and taking appropriate action when products they supply are found to be non-compliant.
These new trends mean companies operating on the EU and UK markets now face the following key challenges:
An ever growing complex compliance framework: The concept of “product safety” has significantly widened in recent years and companies must stay abreast of both EU and UK wide requirements as well as national laws introduced at a local Member State level to ensure full compliance and avoid significant penalties.
New liabilities: Whilst historically online marketplaces were considered to fall within a regulatory 'gap,' recent legislative developments, such as the EU GPSR and the revised Product Liability Directive, as well as proposals from the OPSS, make it clear that online marketplaces must now comply with much stricter requirements at both an EU and UK level.
Ensuring an environmental focus: Compliance with enhanced sustainability regulations may entail substantial changes to existing working practices and therefore, additional costs. For example, Article 11 of the new EU Batteries Regulation significantly widens the requirements regarding the removability and replaceability of portable batteries used within in-scope products, likely mandating design changes for such products placed on the EU market from 2027; while the PPWR requires manufacturers to reduce packaging waste and incorporate recycled materials, again likely necessitating changes in packaging design and materials.
To navigate these challenges effectively, companies involved in the supply of products on the EU and UK markets should consider:
Proactive horizon scanning: Regularly monitor legislative and regulatory updates and engage in (or at the least closely follow) industry forums and consultations to stay informed about upcoming developments. Being proactive in this regard helps anticipate new requirements, providing necessary lead-time to adapt processes and minimizing the risk of non-compliance.
Putting in place robust compliance processes: Develop comprehensive compliance programmes and implement rigorous quality control and safety checks for products, particularly when dealing with products listed on online marketplaces. This ensures that all products meet EU and UK safety standards before being placed on these market, thereby enhancing product safety and reducing the risk of corrective actions, regulatory penalties and other liability.
Investing in sustainability: Companies should align business practices with the EU’s and UK’s sustainability goals by adopting eco-friendly product designs and sustainable manufacturing processes, which will not only go some way to achieving compliance but also to enhanced brand reputation.
The need for product companies to adapt to the evolving legislative and regulatory landscapes in both the EU and UK is now – and those who fail to prepare should prepare to fail – meaning reduced market access, enforcement actions and penalties along with litigation risks and reputational damage.
The Hogan Lovells Global Products Law team actively monitors developments in all of the areas mentioned above, and more, with expertise in the EU, UK and beyond. We encourage businesses to keep an eye out for our future updates, and to get in touch with any questions they may have.
Authored by Valerie Kenyon, Vicki Kooner, and Farheen Ahmed.
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