UK update - Radical reform ahead?
The UK Office for Product Safety and Standards (OPSS) has published its response to the recent call for evidence on product safety in the UK ("Response") (see here).
OPSS has not published concrete proposals for reform yet (more detailed proposals are expected to follow). However, OPSS concluded that the product safety framework needs to be "radically reformed" to be more adaptable and capable of responding to accelerating change, indicated some of the key focus areas for change (see below) and outlined some initial steps that will be taken in the short term (such as developing training for enforcement authorities and refreshing business tools).
In line with the government's aim to capitalise on Brexit opportunities, the Response emphasises that the UK now has a genuine opportunity to "think boldly" about how to regulate product safety. One concern that is not addressed in detail in the Response is the risk that divergence from the EU product safety and regulatory regime could actually make the UK less attractive for business and in fact discourage innovation within the UK. However, it is somewhat reassuring that the Response acknowledges that the UK must take an international approach to tackling these challenges.
EU update — Progress report published on the proposed General Product Safety Regulation
Product safety reform is at a more advanced stage in the EU and no doubt OPSS will be looking carefully at the EU proposed General Product Safety Regulation when considering changes for the UK regime (see here).
The EU recently published a progress report on the draft General Product Safety Regulation (see here). At a high level, whilst there is preliminary support amongst Member States for the proposed Regulation's overall objectives, the Working Party on Consumer Protection and Information highlighted a few issues (see below). The report concludes that further work at a technical level is required before the Council can take a political decision.
The Response discusses a number of hot topics, such as addressing challenges posed by: (i) online sales and online marketplaces; (ii) developments in technology (iii) repair, reuse, sustainability and net zero goals.
Points of particular interest in the Response include the following:
- Online marketplaces: OPSS concluded that change is required to protect consumers and ensure marketplaces are fair as online marketplaces have revolutionised the way we buy products. In the short term, OPSS issued a warning to consumers about the risks of buying products online. Other short term actions may include continuing to "challenge major online marketplaces to play their part to protect UK consumers from unsafe goods" and expanding enforcement work. It is worth bearing in mind that, in response to the call for evidence, enforcement authorities raised concerns about sales through social media (including closed forums). Some stakeholders suggested that the UK should consider creating an equivalent to the voluntary EU Product Safety Pledge, with online marketplaces and platforms arguing in favour of the flexibility created by a voluntary approach. OPSS intends to consult on a reform agenda that, in relation to e-commerce, includes ensuring that there is greater accountability for products sold in the UK. It is not clear yet to what extent proposed UK reform will mirror the proposals set out in chapter IV of the proposed EU General Product Safety Regulation, which is dedicated to online marketplaces.
- Sustainability/Net Zero: OPSS said that, as products are expected to become increasingly energy and resource efficient, with longer product lifecycles and greater ability to repair and reuse, it is important that consumers can have confidence in the safety of products and that the environmental benefits of these trends can be fully realised. In the short term, OPSS will also consider the role of voluntary standards for products to encourage environmental sustainability and to support industry's transition to Net Zero. OPSS recognised the opportunity for the government to set a clear direction in relation to concerns about liability for and safety of repaired and second hand products (working with stakeholders to understand the most effective way forward), which are seen by many as a barrier to ensuring a more circular economy. Creating a more circular economy is an important issue in the EU as well and this is another area where we wait to see the extent to which the UK and EU regimes will align going forward.
- Regulation of new technologies: OPSS noted that responses to the call for evidence had highlighted challenges posed by new products and technologies (including whether the increasing use of software and new technologies make it more challenging for consumers to determine who is responsible if something goes wrong). OPSS is continuing to work with relevant government departments and bodies to understand the impact of AI on product safety and liability. OPSS also said that it will actively explore the possibility of using e-labelling in the future. The regulation of new technologies is a challenging issue which is certainly not limited to the UK. The EU proposed General Product Safety Regulation includes some changes which are intended to address challenges posed by new technologies, for example, by including the "evolving, learning and predictive functionalities of a product" in a list of factors to take into account when assessing whether a product is safe.
- Regulatory requirements and enforcement: OPSS intends to consult on how product safety processes and testing requirements could become more "risk based" (this might involve additional requirements for high risk products). OPSS also intends to consult on reform to plug gaps in enforcement powers that have emerged with the rise of new technology and business models and potentially to expand access to data on product safety incidents to help regulators assess risk. OPSS also indicated that future reform could include making sure obligations are simple, consistent and risk proportionate. OPSS indicated that it may consider improving the UKCA marking framework and recognised the importance of building capacity and capability in the UK among conformity assessment bodies. A frequent suggestion from stakeholders, including enforcement authorities, was that non-UK manufacturers should be required to establish a UK economic operator with regulatory and compliance obligations for all (or just specified) products, similar to the regime recently introduced in the EU by Article 4 of the EU Market Surveillance Regulation (2019/1020/EU) (see also article 15 of the proposed new EU General Product Safety Regulation). In the short term, OPSS will continue to develop a more rigorous, agile and up-to-date risk assessment methodology for authorities, improve the functionality of tools such as the Product Safety Database and sponsor BSI to develop a standard aimed at improving the inclusiveness of data used to make standards.
The issues highlighted in the EU progress report concerning the proposed General Product Safety Regulation include the following:
- More clarity needed — Member States would like more clarity on the subject matter, scope and definitions used in the proposed Regulation. Suggestions include addressing end-users instead of just consumers and adding definitions of certain terms, e.g., "precautionary principle," "interconnected" as well as "repaired," "reconditioned" or "refurbished" products.
- Safety requirements — Despite general support for the use of standards and extending criteria for safety assessment, including risks related to products using new technologies, Member States would like to see further clarification regarding the priority of factors when assessing safety, the wording of the provisions and the definitions used.
- Obligations of economic operators — Whilst there is broad agreement among Member States to align the obligations that apply to non-harmonised products with those applicable to harmonised products, some are concerned that widening scope in this way may not be feasible and may lead to an overload of information for national authorities.
- Online marketplaces and the Digital Services Act (DSA) — It is good to see that there is general consensus among Member States that consistency should be achieved between relevant provisions of the proposed Regulation and the DSA. However, there is some discrepancy amongst Member States as to whether additional responsibilities for online marketplaces should be included in the proposed Regulation, such as on recalls or prohibiting offers of dangerous products from being placed online.
- Market surveillance rules — Member States generally agree that the proposed Regulation should broadly align with the EU Market Surveillance Regulation (2019/1020), but some would prefer that the latter's provisions should be incorporated, as opposed to merely referenced, in the proposed Regulation.
- Safety Gate — Some Member States suggested that it may be more appropriate to share information between Member States via Safety Gate on serious risks only (to avoid information overload). Member States agreed that they should not be required to submit information to Safety Gate within two working days.
At a UK level, we do not yet have concrete proposals for how the UK's product safety regime will change in the years to come. However, the recently published Response does provide a helpful insight into the likely issues OPSS will focus on for future reform.
Further work is needed on the proposed EU General Product Safety Regulation, so the EU proposals may change before being finalised.
Unsurprisingly, many of the challenges OPSS is grappling with (e.g., in relation to online marketplaces and new technologies) are issues which the EU reform also needs to address. We do not know yet whether the UK Government is likely to adopt similar proposals to those already under consideration at an EU level. The OPSS Response indicates that there will be further engagement with stakeholders/consultation, which would provide an opportunity for businesses to make their voices heard. Whilst the UK Government wishes to think boldly and capitalise on opportunities arising from Brexit, manufacturers in the UK and companies importing into the UK market will likely be advocating for alignment as far as possible between the UK and EU regimes.