The European Commission’s 150-page "'Blue Guide' on the Implementation of EU products rules" (the Blue Guide) is critical to a proper understanding and interpretation of the vast majority of product laws under the EU new legislative framework.
Last issued in 2016, the guidance is, however, becoming out of date. This is particularly so in relation to its treatment of the digital economy, software and e-commerce. However, updates to it are in progress. These updates also relate to aspects of the circular economy such as the remanufacturing and treatment of used goods, certain legal implications of Brexit, and coherence with the EU’s ongoing enhancement of its market surveillance and enforcement regime, as well as including a handful of clarificatory changes, for example, around the position of “end-users” and “own use” of products.
Revisions to the Blue Guide are nearing completion, with the majority of edits made and the Commission due to publish the new guide in mid-2021.
Based on the latest draft text, this article briefly summarises the key changes as we see them.
What is not changing?
Readers who are closely familiar with the Blue Guide and its many nuances will be relieved to know that the new Blue Guide will not be a complete re-write. Subject to the points noted below, its core structure and key concepts will remain largely unchanged.
In particular, the detailed definitions of the key trigger points of “making available”, “placing on the market” and “putting into service” are not materially changed nor, in broad terms, are the key descriptions of “manufacturer”, “authorised representative”, importer” and “distributor”.
Online sales and “placing on the market”
A number of the draft amendments aim to bring the guidance up to date in respect of the increased prevalence of e-commerce, including rules around products sold online.
In particular, the draft expands on the test for whether a product offered for sale online is considered to be “placed on the market” in the EU. While it states that an offer for sale is considered to be targeted at end-users in the EU if the relevant economic operator directs its activities to a Member State, it also states that the mere fact that the economic operator’s website is accessible in the Member State in which the end-user is established is insufficient. The draft also clarifies that the physical fulfilment of an order for a product sold to end-users in the EU by an online seller based outside the EU, including by a fulfilment service provider, gives irrefutable confirmation that the product is placed on the EU market regardless of whether the seller is based in or outside the EU.
The draft also states that the timing of “placing on the market” may differ for each individual product sold via an online offer. For example, when an offer concerns a product that has not yet been manufactured, the placing on the market will only take place after the manufacturing stage has been completed. However, for a products already manufactured, the placing on the market occurs at the moment it is offered for distribution, consumption or use on the EU market. The legal consequence is that, when the offer does not concern a product that has already been manufactured, the obligation on the relevant economic operator to cooperate with the market surveillance authorities will not apply until after the manufacture has been completed.
Fulfilment service providers (FSPs)
The draft provides updated guidance on FSPs following their inclusion in the Market Surveillance Regulation 2019/1020 as an additional category of economic operator. This is contrasted with the current Blue Guide, which states that FSPs should be considered as “distributors” and must meet the corresponding requirements.
FSPs are defined in the Market Surveillance Regulation as any natural or legal person offering, in the course of a commercial activity, at least two of the following services: warehousing, packaging, addressing and dispatching, without having ownership of the products involved, excluding postal services, parcel delivery services and any other postal services or freight transport services. The draft revisions to the Blue Guide reiterate this, and state that FSPs are to be considered economic operators who must cooperate with enforcement authorities to address issues of non-compliance with the products they handle, and against whom enforcement action can be brought.
Responsible economic operators (REOs)
The Market Surveillance Regulation also specifies that, for certain product categories, there must be an economic operator in the EU able to carry out a number of tasks, including cooperation with the market surveillance authorities. The draft Blue Guide includes a new section on REOs, which lists the possible candidates (including an FSP established in the EU where there is no eligible EU-based manufacturer, importer or authorised representative).
The draft notes that a number of the REO’s tasks will already be fully or partially covered by their obligations under EU harmonisation legislation, depending on the type of economic operator they are; for example, a number of the obligations overlap significantly with the commonly applied manufacturer and importer obligations. Importantly, however, the draft goes on to say that when the REO is an authorised representative or an FSP, they will not have to take corrective action or mitigate risk themselves, but will need to ensure that the necessary action is undertaken, e.g., by requesting the manufacturer to follow up and verify whether it has done so.
Another point the draft makes is that all REOs must indicate their name and contact details on the product or its packaging. It states that where multiple names and details of economic operators are indicated on the product, it should be made expressly clear which of them is the REO.
Amendments relating to software focus mainly on signalling that software changes and updates have the potential to substantially modify a product, such that the initial risk assessment carried out no longer applies and the existing product may need to be treated as a brand new product for conformity assessment and other compliance purposes.
The draft does not introduce significant changes on this topic, but notes that the concept of product safety encompasses protection against all kinds of risks arising from the product, including not only mechanical, chemical and electrical risks, but also cyber risks and risks related to the loss of connectivity of devices. The draft also points to current legislation, such as the Radio Equipment Directive and Medical Devices Regulations, to demonstrate how the safety of standalone software can be regulated.
Instructions and safety information
The draft makes a fairly small but noteworthy amendment in relation to the obligation to accompany products placed on the market with instructions and safety information.
While the draft states that safety information still needs to be provided on paper, it also states that, unless otherwise provided for in specific legislation, the full set of instructions may be provided in an easily accessible manner through a website, electronic label or QR code, by prompting the end-user to read on a webpage or download the full documentation in the language of their choice, or through other electronic formats.
The draft notes that where this option is taken up, the full documentation must remain accessible for a period of 10 years after the product is placed on the market, and a paper version must always be available free of charge for consumers who request it.
After being placed on the market, products may have a second life through repair, reuse or remanufacturing. Remanufacturing is not mentioned in the current 2016 version of the Blue Guide, but the concept is close to the hearts of proponents of a more resource-efficient “circular” economy.
The current draft of the new guide expressly addresses remanufacturing in a section covering repairs, remanufacturing and other modifications to products. The draft defines remanufacturing as a process that may involve dismantling a product, restoring and replacing components, and testing the individual parts and the whole product to its original design specifications; and, significantly, states that in remanufacturing the performance of the product after remanufacture is expected to be at least the same as the original performance specification (“like new”) or even better. The draft guide distinguishes this from repair, where only the faulty part is rectified.
The draft goes on to clarify that where a remanufacturing process restores a product to the same state as it was when originally placed on the market without changing its original performance, purpose or type, the remanufactured product is not considered as a new product for the purposes of EU harmonisation legislation and therefore does not need to undergo new conformity assessment. Where these criteria are not fulfilled, however, the remanufactured product is liable to be treated as a modified product required to comply afresh and in full with EU product laws.
Second-hand and used products
The current 2016 version of the Blue Guide already goes some way to addressing the status of second-hand and used products. Both types of product are subject to EU product compliance laws (conformity assessment, CE marking, etc.) when they enter the EU market for the first time, in the same way as new products, if they are being supplied in the course of a commercial activity. However, products that are already on the EU market (i.e., they were introduced to the market as new products) are not subject to EU product compliance laws if they are subsequently supplied as used or second-hand products.
The draft Blue Guide clarifies that used and second-hand products that are already on the market, whilst not subject to EU product compliance laws, are subject to the general safety requirements under the General Product Safety Directive 2001/95/EC (GPSD) if marketed to consumers; i.e., the entity marketing the used or second-hand product to consumers assumes the role of “producer” under the GPSD. The duty under the GPSD is essentially to ensure that the product is safe when used for its intended or reasonably foreseeable use(s).
The current version of the Blue Guide makes it clear that if a product is subject to post-manufacture changes that modify its safety performance to an extent which impacts on its conformity with the applicable EU product safety requirements, it will be considered a new product when placed on the market. This means that the modifier becomes the manufacturer for the purposes of EU product compliance law, and the modified product will need to go through a fresh conformity assessment and CE marking procedure before it can be marketed in the EU.
The draft includes a clarification that modified products will not be subject to EU product compliance laws if they are not made available, i.e., if the product is used exclusively by the person carrying out the modification. That would potentially be a very useful clarification for companies that procure equipment and modify it before deploying it in their business activities (for what is termed “own use”), as this would potentially avoid the need to update the EU conformity assessment and CE marking. However, for the reasons set out in the next section, it appears that the draft intends to confine that exception to natural persons, but not corporate entities that provide modified equipment for use by their employees.
Own use and putting into service
Amongst the suite of EU product compliance laws, there are a few which include a “putting into service” trigger in addition to “placing on the market” (including the Electromagnetic Compatibility Directive 2014/30/EU, the Machinery Directive 2006/42/EC and the Ecodesign Directive 2009/125/EC). This trigger comes into play only when there has been no “placing on the market” of a product, and means that when such a product is first “put into service”, it must be compliant with EU product compliance laws at this point.
The Blue Guide indicates that the “putting into service” trigger only applies when a product is manufactured or imported to the EU for “own use”, meaning that any such products largely escape regulation under EU product compliance laws save for the limited number which include a “putting into service” trigger.
The definition of “own use” has to date been less clear. It was generally understood that this would cover a situation where an employer provided a product or equipment for use by its employees; i.e., this form of own use would not constitute a placing on the market, notwithstanding that there is a supply from the employer to the employer, but would be a putting into service. Section 2.5 of the 2016 version of the Blue Guide appears to confirm that.
However, the draft of the revised Blue Guide includes a new section which states that where a manufacturer supplies products it manufactures for the use of its own employees, they are supplied for use on the EU market and thus there is a placing on the market; i.e., this form of own use is a placing on the market rather than a mere putting into service. The impact of that proposed change is potentially significant, as it would mean that products imported or manufactured (or significantly modified) by employers for own use by their employees are subject to the full suite of EU product compliance laws rather than just those with a “putting into service” trigger; the “own use” exception would only then apply to natural persons.
Components, spare parts and finished products
Generally speaking, EU product compliance laws apply only to finished products. However, as always there are exceptions, such as where components and spare parts may be regarded as finished products in their own right when marketed separately from the product into which they are intended to be incorporated. Certain EU product compliance laws (e.g., the RoHS Directive 2011/65/EU) specifically apply to spare parts and certain types of components (e.g., cables).
The nuances as to how EU product compliance laws apply to components and spare parts were not made entirely clear in the current 2016 version of the Blue Guide. The new draft includes some additional sections which seek to provide greater clarity on this topic. Amongst other things, it clarifies that:
- The supply of a component from its manufacturer to be integrated into a final product can constitute a placing on the market if that component is either a finished product in its own right or the type of component that is specifically caught by EU product compliance laws (meaning it must be conformity assessed and CE marked).
- In the above example, the manufacturer of the final product can rely on the declaration of conformity and conformity assessment of the component manufacturer when undertaking the conformity assessment of the final product.
- For certain products, again in step with circular economy principles, manufacturers are now required to make spare parts available for a minimum period of time. If those spare parts are individually caught by EU product compliance laws, they are not required to comply with the latest state of the art (e.g., if the applicable EU harmonised standard is updated) if this would make them incompatible with the product they relate to.
As mentioned above in respect of FSPs and REOs, a number of the proposed draft Blue Guide amendments comprise an explanation of the new Market Surveillance Regulation 2019/1020, the majority of which comes into force from 16 July 2021.
The draft indicates how the new provisions will operate, and the purposes they are intended to serve in ensuring product compliance. This is a particularly detailed portion of the draft on which much could be written; however, in summary, the draft explains how the Regulation is intended to improve and modernise market surveillance by:
- preventing non-compliance by providing information to and carrying out joint activities with businesses;
- providing more effective enforcement tools to address online sales; and
- ensuring improved cooperation between EU countries, between market surveillance and customs authorities, and through an EU-wide product compliance network.
What is not covered?
A number of other EU legislative reviews are currently underway and are expected to make changes to EU product laws in the near future.
One example of this is the above-mentioned GPSD, which went through a consultation period in Q3 of this year, and for which the proposed amendments are expected to be adopted by the Commission in the latter part of 2021. While some aspects of the GPSD review are covered by the draft in part – for example, some of the safety issues around software and the way in which product compliance rules relate to online sales – other concerns likely to be addressed by the GPSD are not represented, such as the safety challenges imposed by artificial intelligence and robotics.
Other legislative reviews that are worth watching out for include the Ecodesign Directive 2009/125/EC, for which public consultation is anticipated in Q1 of 2021, and the Machinery Directive 2006/42/EC and Low Voltage Directive 2006/95/EC, both of which are in advanced stages of review and expected to be finalised during 2021.
The Commission has stated that the revised Blue Guide will be published in mid-2021, although this is potentially subject to COVID-related delay.