EU tightens rules for product design and sales: new obligations for manufacturers and sellers

The European Union is on the verge of adopting three pieces of legislation to promote more sustainable product design and extended product life:

• the Ecodesign for Sustainable Products Regulation (“Ecodesign Regulation”),
• the Repair of Goods Directive and
• the Empowering Consumers for the Green Transition Directive ("Empowering Consumers Directive").

Together, these legal acts form an integral part of the European Green Deal and the ambitious objective of making Europe the first continent to be climate-neutral by 2050.
The three EU legals acts complement each other and together cover the entire life cycle of a product. They entail far-reaching consequences for manufacturers and all players in the distribution chain.

The new Ecodesign Regulation targets product development and manufacturing by setting new requirements for certain products regarding endurance, reusability, reparability and energy and resource efficiency. The Empowering Consumers Directive imposes extensive information obligations on sellers. They serve to enable the buyer to make a sustainable purchasing decision. It also regulates the protection of consumers from being misled by purported green claims (this aspect falls within the scope of unfair commercial practices and is not addressed here. We refer to our client alert of 14th of November 2023).

In contrast, the Repair of Goods Directive focuses on the after sales phase: It imposes new obligations on economic operators regarding product repairs outside the seller’s warranty. In addition, the directive amends the Sale of Goods Directive encouraging buyers to opt for repair over replacement during the warranty period.

In the following, we provide a tabular overview of the objectives, the current status of the legislative process, the products and economic operators concerned and the time frame for application and implementation. Subsequently, we provide a brief overview of the planned obligations for economic operators.

Overview of the three EU legislative acts

Brief overview of the specific legislative acts

Ecodesign Regulation

The Ecodesign Regulation replaces the current Ecodesign Directive. It imposes new and significant-ly extended obligations on businesses. While the previous directive was limited to energy-related products, the scope of the new regulation extends to almost all physical products. This is a significant expansion. Additionally, the regulation introduces new requirements to make products more durable, reliable, reusable, upgradeable, repairable, easier to maintain, refurbish and recycle, and more energy and resource efficient. The regulation itself does not impose requirements in terms of specific product parameters to be met, but merely sets forth the framework for future product-related delegated legal acts by the EU Commission.

Overview of obligations of economic operators

Obligations of economic operators in connection with the delegated acts to adopted by the EU Commission:

• Compliance with ecodesign and performance requirements in the manufacture of regulated products (Art. 5, 6)
  
  • Obligation to comply with specific product parameters (durability, reliability, reusability, upgradability, reparability, possibility of maintenance and refurbishment, re-source efficiency, possibility of recycling, etc.)
  • No premature obsolescence of products due to the use of low-value components, impeded disassembly of key components, unavailable repair information or spare parts or with regards to software no longer working once an operating system is up-dated or when software updates are not provided.
• Extensive information requirements, including on reparability, durability, and carbon/environmental footprint (Art. 7); if necessary, by affixing a harmonised label (Art. 14)
• Obligation to issue a digital product passport (Art. 8), which – depending on the delegated acts – shall or may among others include a unique product identifier, the Global Trade Identification Number (GTIN), user manuals, EU declarations of conformity, technical documentation and information for consumers and other operators on product maintenance and repair (see Annex III)
• Requirements on the conduct of conformity procedures and CE marking (Art. 32 to 40)
• Information obligations towards market surveillance authorities (Art. 30)
• Monitoring and reporting obligations towards the EU Commission (Art. 31)
• Requirements for supply chain actors to provide, upon request, manufacturers with available relevant information related to their supplies or services or to give access to relevant documents or facilities to those manufacturers (Art. 31a).

Obligations with regards to consumer products:

• Duty to disclose information on discarded unsold consumer products, including their number and weight, the reasons for the discarding, the preparing for re-use, remanufacturing, recycling, energy recovery and disposal operations in accordance with the waste hierarchy as defined by Art. 4 of Directive 2008/89/EC.
• Prohibition of the destruction of consumer products listed in Annex VIIa (Art. 20a). The annex is currently limited to apparel and clothing accessories and footwear.

Liability/impending sanctions

A major innovation is Article 69a of the Ecodesign Regulation. It provides for direct liability for damage caused to consumers in the event of non-compliance of a product with eco design requirements laid down in the delegated acts. The liability lies with the manufacturer or – in case the manufacturer is not established in the EU – with the importer or the authorised representative of the manufacturer. In case the importer is not established in the EU or there is no authorised representative of the manufacturer, the fulfilment service provider is liable. Furthermore, consumer associations will be able to bring class actions against economic operators on behalf of a large number of consumers. For this reason, the regulation amends the directive on representative actions 2009/22/EC.

In addition, infringements of the regulation may be subject sanctions, the details of which are to be determined by the Member States (Art. 68).

Outlook

While delegated acts already exist for some product groups, they are in the planning stage for others. The current focus is particularly on energy-intensive products such as commercial washing machines, universal external power supplies and chargers for electric vehicles. Nevertheless, economic operators should carefully monitor future developments with respect to their products. This applies in particular to obligations relating to unsold consumer products.

Repair of Goods Directive

The Repair of Goods Directive aims to strengthen consumer rights in relation to the repair of certain products. On the one hand, it imposes extensive obligations on economic operators with regard to the repair of products outside the seller’s warranty. On the other hand, the directive amends the Sale of Goods Directive and extends the scope of warranty. The obligations of economic operators (see below) are limited to the product categories listed in Annex II of the directive. These are products for which ecodesign requirements have already been defined at the design and manufacturing stage. The Repair of Goods Directive thus builds on the Ecodesign Regulation.

Furthermore, the EU Commission will establish an EU-wide platform that will enable consumers to find suitable repair shops. Correspondingly, repairers shall be able to offer their services via the platform.

Obligations of economic operators

• Provision of an European Repair Information Form to consumers by repairers (voluntary) (Art. 4)
  
  
• Requirements limited to products listed in Annex II:
  
  • Obligation to own or subcontracted repair, primarily borne by the manufacturer and in secondary position by the authorised representative, importer, and distributor (Art. 5 para. 1, 2).
  • Duty of the manufacturer to offer spare parts and tools at a reasonable price that does not deter repair (Art. 5 para. 3)
  • Duty to ensure that consumers can access information on the indicative prices that are charged for typical repair via a free access website (Art. 5 para. 3a)
  • Ban on any contractual clauses, hardware or software techniques that impede the repair of goods, unless justified by legitimate and objective factors including the protection of intellectual property rights. In particular, manufacturers must not impede the use of spare parts issued from 3D printing by independent repairers (Art. 5 para. 3b).
  • Manufacturers may not refuse to repair for the sole reason that a previous repair has been performed by other repairers or by other persons (Art. 5 para. 3c).
  • Information obligation on the consumer’s right to repair of the manufacturer, au-thorised representative, importer or distributor (Art. 6)
    
    
• Amendments to the Sales of Goods Directive (right of warranty):
  
  • Extension of the warranty period for repaired goods by a least 12 months (Art. 12 para. 2)
  • In contrast to earlier drafts, the final draft does not prioritise repair over replace-ment. Instead: Duty of the seller to inform consumers about their right to choose between repair and replacement as well as the possible extension of the warranty period, in case that repair is chosen (Art. 12 para. 3).
  • Under certain conditions the consumer has a claim against the seller to provide the consumer free of charge with a (refurbished) replacement good on loan (Art. 12 para. 4).

Sanctions

In addition, penalties may be imposed for infringements of national provisions pursuant to Art. 4, 5 and 6 of the directive, the details of which are to be determined by the Member States (Art. 11).

Outlook

At the EU level, manufacturers should carefully monitor the possible inclusion of further product groups in Annex II of the Repair of Goods Directive.

At the national level, Germany, for example, is currently drafting a repair act (“Reparaturgesetz”) to ensure the availability of spare parts and repair instructions. This act will require manufacturers to provide free and transparent repair information to consumers and professional repairers. In addition, manufacturers will have to stock spare parts for products for a period of at least ten years and make them available within 14 days at a reasonable price so that the repair is financially viable compared to a new purchase.

Empowering Consumers Directive

The Empowering Consumers Directive imposes extensive information obligations on sellers. They serve to enable the buyer to make a sustainable purchase decision. The Directive provides for the use of a so-called harmonised notice and harmonised label, the details of which are to be determined by implementing acts of the EU Commission (see Art. 2 para. 5).

Among others the following obligations are imposed on the seller:

• Information obligation on the existence of the legal guarantee of conformity for goods and its main elements, including its minimum duration of two years, using the harmonised notice form (Art. 2 para. 2 lit. a).
• Information obligation on the existence and duration of a commercial guarantee of durability using the harmonised label, if the guarantee is provided by the manufacturer at no additional cost covering the entire good and with a duration of more than two years (Art. 2 para. 2 lit. b)
• Information obligation on the repairability score and, if such is not applicable, information about the availability and estimated cost of, and procedure for ordering spare parts, and about repair restrictions (Art. 2 para. 2 lit. c)
• Information obligation on the minimum period during which the producer or the provider provides software updates (Art. 2 para. 2 lit. b)