KANBrief Artificial intelligence

New legislation governing market surveillance and product safety

On 16 July 2021, new legislation came into force creating a harmonized legal framework for market surveillance for a large number of products.

Regulation (EU) 2019/1020 on market surveillance and compliance of products establishes a single body of rules for the seventy European harmonized product sectors listed in it in Annex I. The regulation is wide in scope, ranging from lifts, machinery, motor vehicles and construction products to explosives and toys. In future, Regulation (EC) 765/2008, previously the essential regulation governing market surveillance, will contain only the key provisions concerning accreditation and the CE mark. The provisions governing market surveillance have been transferred to the new Regulation (EU) 2019/1020 and adapted to the requirements of the market.

Explicit rules for online trade

For the first time, the Market Surveillance Regulation (EU) 2019/1020 contains key provisions for market surveillance in online trade, thereby addressing the continual growth in sales volume in this sector of the economy. In future, products must be treated in the same way by the market surveillance authorities, whether they are made available on the market online or offline. This presents the market surveillance authorities of the German regional administrations with a new challenge, and requires continual further development of the authorities’ surveillance strategies and methods and also closer networking between the authorities. The first step has already been taken with the establishment of a joint facility for use by the regional authorities for surveillance of online trade, and harmonization of the procedure across the regional market surveillance authorities.

Besides making provision for improved instruments for market surveillance, such as covert purchase of products, the new regulation also treats fulfilment service providers, such as logistics companies performing at least two of the services of warehousing, packaging, addressing and dispatching of products, as economic operators. With respect to certain product groups such as electrical equipment, machinery, lifts, PPE and pressure equipment, the regulation also sets out a legal obligation for at least an authorized representative to be appointed in the European Single Market as an economic operator should no manufacturer, importer or fulfilment service provider be established in the EU. The authorized representative’s contact information must be communicated as soon as the product is placed on the market, i.e. when it is made available on the vendor’s website. Products offered for sale online for which only the manufacturer or consignor in a third country is stated should therefore no longer present problems for tracking and implementation of adequate measures by market surveillance authorities as was the case in the past. The market surveillance authorities now also have greater authority to remove content from and restrict access to websites or apps (online interfaces) in cases where a serious risk cannot otherwise be eliminated.

Legislative instruments in Germany now structured more clearly

Prior to the new regulation, the German Product Safety Act was the sole statutory instrument in Germany for market surveillance and the measures deriving from it for enforcing safety provisions governing the making available of products on the market. For products for which harmonizing European legislation exists, Regulation (EU) 2019/1020 is now the relevant legislative instrument for product safety, and for non-harmonized products, the German act governing market surveillance and assurance of product conformity
(Market Surveillance Act, MüG (in German) of 9 July 2021.

Consequently, market surveillance is now regulated in Germany at national level for the first time by a dedicated act, one which also has an overarching function. Where more specific market surveillance provisions exist in the relevant sectoral product safety regulations, they take priority over the act. The German Market Surveillance Act sets out regulations applicable throughout the country for the performance of market surveillance, from the delegation of powers to the authorities to sanctions and reimbursement of costs.

The German Market Surveillance Act makes reference to the powers and measures of the EU Market Surveillance Regulation. These apply directly only to the area subject to harmonization. Reference to these provisions also transposes them into German law with respect to products that are subject only to the general Product Safety Directive 2001/95/EC (the non-harmonized area). Examples of products within the non-harmonized area are hand tools, work furniture and used products of any kind. Before now, the general principle in Germany was that responsibility always lay with the authority within whose territory the manufacturer or importer of the offending product was established. The new act contains special provisions governing responsibility for market surveillance of online trade that deviate from this principle. This requires market surveillance authorities to work even more closely together in the future in order to keep up with continual changes in the market.

As the key item of legislation, the Product Safety Act continues to govern the conditions subject to which products are made available on the market, exhibited or used for the first time in the course of commercial activity. The act continues to form the basis for implementation of product-specific Single Market directives and the general Product Safety Directive 2001/95/EC. To avoid conflicts between provisions, those governing market surveillance have been transferred to the Market Surveillance Act. The Product Safety Act now only contains the provisions governing random sampling and, for example, implementation of the additional provisions concerning making consumer products available on the market. Transfer of the previous Section 9 concerning installations subject to mandatory regular inspection into a separate law has resulted in the Product Safety Act once again being a “pure” legal instrument governing the making available of products on the market.

Helmut Heming
helmut.heming@ms.niedersachsen.de

Lower Saxony Ministry for Social Affairs, Women, Family and Health 
Occupational Safety and Health Unit, Technical Consumer Protection