By Rutger Oldenhuis
It’s May as I write this blog – the time of year when cockchafers (May bugs) emerge from the ground en masse. This phenomenon is remarkable in itself, as the insect has been largely eradicated in most parts of the Netherlands due to pesticide use. Each time, it’s a fascinating spectacle. After spending up to five years underground as larvae – being a persistent nuisance to my garden – they get to live above ground for just a few short weeks. In that time, they mate, lay eggs, and die. At dusk, you can see them flying around awkwardly, seemingly drunk. Every now and then, I spot one flying around aimlessly in April. Imagine spending five years underground, and no one told you that your moment only comes in May. Or maybe he (I’m sure it’s a male bug) just didn’t listen to his May bug friends – “Don’t go yet, it’s APRIL!!”
Naturally, this all made me think of the cycle of product compliance and product safety. Like the May bug, years of design and development can pass before a product finally hits the market. And how frustrating would it be if the timing were off – for example, because the product fails to comply with the latest legal requirements and technical standards?
Take the Radio Equipment Directive (RED), for example. Effective from 1 August 2025, radio equipment sold within the EU must (also) comply with enhanced cybersecurity requirements under the RED. Depending on the device’s functionalities, radio equipment must not harm network operations, must safeguard user privacy and personal data, and must incorporate protections against fraud. Manufacturers, importers, and distributors are responsible for ensuring compliance with RED.
Unlike the May bug, the example of the RED shows that product regulations are far from extinct. Despite attempts to curb the regulatory “overreach” of Brussels, manufacturers still need a crystal-clear understanding of what’s required to sell products on the EU market. And with the introduction of the General Product Safety Regulation (GPSR) – a topic I’ve written about extensively – new obligations now apply to non-harmonised products, including the requirement to maintain technical documentation and perform risk assessments. And for non-EU manufacturers, it is mandatory to appoint a Responsible Person based in the EU.
Just as April is a May bug’s worst nightmare, there can be serious sanctions for product non-compliance in the EU. I recently researched the fines that can be imposed in EU member states for non-compliance with the GPSR. Some countries have particularly strict national sanction regimes. These can include turnover-based or multi-million euro penalties, often combined with corrective obligations and public enforcement measures.
That said, enforcement bodies do not typically impose fines as a first step. Their primary focus is on consumer safety, not punishment. As long as the company cooperates transparently and acts promptly to resolve the issue, authorities are more likely to issue a warning or allow corrective measures within a set timeframe. Financial penalties are typically reserved for cases involving deliberate misconduct, repeated non-compliance, or failure to act on known risks.
That said, any corrective action can already feel like a punishment in itself. Even better, of course, is to consider product compliance and safety from the very start of product development. It should be a logical and indispensable part of your development budget. After all, the last thing you want as a manufacturer is to spend years “underground” – only to emerge like a May bug in April and find it was all for nothing.
Product Compliance, Safety, and Liability in the U.S. vs. Europe
By Rutger Oldenhuis (Legal Consultant | RecallDesk) and Kenneth Ross (Of Counsel | Bowman and Brooke LLP)
Published on 4 April 2024 in Sporting Goods Intelligence Europe.
In Europe, the United States is often viewed as a land of opportunity for many companies in the consumer products market. The rise of online sales has significantly reduced the barriers to entry into this vast market across the ocean. However, what may be holding European companies back is the unfamiliarity with regulations regarding product compliance and safety in the U.S. In addition, the U.S. has a unique product liability framework that can sometimes deter companies from entering the U.S. market. The prevailing perception of the U.S., in this regard, sometimes appears to be an exaggeration of the European context. Warnings such as ‘Caution: Hot Coffee’ or ‘Do Not Place Pets in the Microwave’ are standard examples illustrating that in the U.S., it appears necessary to provide consumers with warnings even for the most apparent product hazards. Or do you?
In this piece, I will engage in a conversation with Kenneth Ross, an accomplished product safety and liability attorney in the United States. The primary objective of this interview is to explore the basic disparities in the product safety and liability regimes between the United States and Europe. For example, did you know the U.S. does not have a ‘single market’ principle as we know it in the EU? And interestingly, in the eyes of U.S. lawyers, it’s not the U.S. but it is Europe that has the strictest product regulations. Read more about this and other questions in the interview below.
- Introduction
Rutger: Can you tell us about yourself and your experience as a product safety and liability attorney?
Kenneth: I have been practicing product liability and product safety law for 50 years. I spent 12 years as an in-house lawyer at two big companies and the rest of the time at law firms where I have always represented product manufacturers and sellers. I have helped to defend manufacturers in many lawsuits, but for the last 35 years, I have been a counselor to manufacturers and product sellers on how to minimize the future risk of a product liability lawsuit, and how to deal with a product safety problem and a regulatory problem with the government. I represent entrepreneurs, small manufacturers, and huge companies, many of them well-known companies who are having safety problems in the U.S. or around the world. In addition, I have lectured all over the world and have written hundreds of articles on these subjects (see www.productliabilityprevention.com).
- Product compliance and product safety
Rutger: Numerous product regulations have been harmonized within the European Union (EU). If a product adheres to such Union-level legislation, it is typically permissible for it to be marketed across the entirety of the EU, without individual Member States imposing disparate product standards. How does this framework operate in the US concerning the interplay between federal law and regulations within individual states? Consider, for instance, Proposition 65 as an example.
Kenneth: The federal government has several agencies that regulate the safety of some products. These are mostly vehicles, boats, airplanes, consumer products, food, medical devices and pharmaceuticals. There are no agencies that regulate the manufacturers of industrial equipment, construction equipment, and farm equipment. While manufacturers of the regulated products are required to comply with any mandatory requirements issued by these government agencies in order to sell their products, it is possible that there are state laws or regulations that require additional safety measures be designed into these products. While state law cannot diminish the requirements of the federal government, it can supplement them. In that case, the manufacturer must keep track of any safety related requirements for all fifty states.
However, laws and regulations are viewed as minimum not maximum requirements. Thus, even if the manufacturer complies with all applicable federal and state requirements, the injured party in a product liability lawsuit can still argue that the manufacturer should have exceeded these requirements. In addition, the government agency can say that the compliant product creates a substantial product hazard and must be recalled.
Rutger: So if I understand this correctly, the US do not have a ‘single market’ as we know it in the EU. Engaging product lawyers in each state can become a costly endeavour. What practical guidance would you provide to European manufacturers seeking to expand into the US market? How can they ensure that their products comply with the minimum requirements of all states?
Kenneth: It is correct that product liability is not a federal law, but is left up to each state to establish their own laws. And there are many differences from state to state. Since you don’t know in what state you will have to defend yourself, it is not useful to design a product for one particular state. More likely, you consider designing your product to the most stringent legal requirements that exist in any state and applicable standards and hope that this will be defensible if your product is challenged in the future. Of course, for the regulated products, there is a federal law for product safety and the manufacturer must comply with those laws, regulations, and standards.
Rutger: To comply with specific harmonized legislation in the EU, harmonized standards have been established for many product categories. Harmonized standards are usually prepared by recognized European standardization bodies, in collaboration with national standardization bodies and stakeholders from industry, consumer organisations, trade unions and other interest groups. These standards are intended to provide technical specifications that are in accordance with the essential requirements of the relevant European directives or regulations. When a product complies with a harmonized standard, it is presumed that it also complies with the relevant essential requirements of the applicable European legislation. Do the US have a similar system? How can economic operators ensure their product is compliant and safe according to relevant federal and/or state law?
Kenneth: Similar to laws and regulations, compliance with voluntary consensus standards issued by U.S. or international standards development bodies, is viewed as a minimum. Therefore, compliance with these standards does not guarantee that the product is safe enough and the injured party can still argue that the standards should have been exceeded. Despite that, if the manufacturer’s products comply with all applicable laws, regulations and standards, and the product is as safe or safer than any competitor’s product, in most cases, that should be enough to defend the product. However, standards, laws and regulations are not comprehensive and many of them are open to interpretation or are just unclear. So the injured party can still argue that the manufacturer did not comply and that this non-compliance resulted in a defective product.
Rutger: Do the US have an equivalent system to the CE marking used in the European Union?
Kenneth: There are several third-party certification programs that are used by manufacturers to signify that the product complies with a particular standard. The most well-known ones are UL, ETL (Intertek), and CSA (Canadian Standards Association). But the use of these designations merely means that the product complies with a standard issued by UL or CSA. The ETL logo usually signifies compliance with UL requirements.
Also, the manufacturer can place a decal on the product indicating that the product complies with a voluntary consensus standard issued by groups such as the American Society of Testing and Materials (ASTM), the American National Standards Institute (ANSI), and the National Fire Protection Association (NFPA). While none of these certifications provide absolute protection in case of an injury or lawsuit, they can provide good evidence that the product was tested and does comply with certain requirements. There are numerous testing laboratories in the U.S. and elsewhere that will test products and certify compliance, however, with most products, a manufacturer could state that its products comply with certain requirements without getting a third-party laboratory to confirm compliance.
In addition, U.S. federal law requires manufacturers and importers to test some consumer products for compliance with consumer product safety requirements. Based on receiving passing test results, the manufacturer or importer must certify the consumer product as compliant with the applicable consumer product safety requirements in a written or electronic certificate. Certificates are required to accompany the applicable product or shipment of products covered by the certificate, and a copy must be provided to retailers, distributors and, upon request, to the government.
Rutger: In the EU, determining the competent authority responsible for product safety hinges on the product type, encompassing both Union-wide and individual Member State levels. How is this framework established in the US, and what entities serve as consumer product safety regulators within the US? What is their role pertaining to product compliance and safety and what powers do they have?
Kenneth: The U.S. Consumer Product Safety Commission (CPSC) governs all consumer products except for tobacco, motor vehicles, pesticides, firearms, aircraft, boats, drugs, medical devices, cosmetics, and food. The CPSC states its authority and activities as follows:
- Issuing and enforcing mandatory standards or banning consumer products if no feasible standard would adequately protect the public;
- Obtaining the recall of products and arranging for a repair, replacement or refund for recalled products;
- Researching potential product hazards;
- Developing voluntary standards with standards organizations, manufacturers and businesses;
Some states have product safety-related legislation that is enforced by that state’s Attorney General. This legislation cannot conflict with the legislation and actions of the CPSC.
Rutger: The consumer products market is experiencing increased globalization. Imagine a scenario where a manufacturer aims to broaden the sales reach of their consumer products to include the US market. What guidance would you offer from a product compliance point of view? Is it typically advisable to create a distinct product line for the US, or is it feasible to design consumer products in a manner that allows them to be marketed in both the EU and the US?
Kenneth: Manufacturers would prefer to have one design for worldwide sales. However, the EU usually has safety requirements that are more stringent than U.S. laws, regulations, or standards. In that case, many U.S. manufacturers would try to sell a product that complies with the most stringent requirements. If compliance with EU requirements makes the product too costly or difficult to use, then the U.S. manufacturer could consider selling a product in the U.S. that just complies with U.S. requirements. However, there is a risk in doing so in that the EU product could be considered safer and the U.S. version less safe and in a product liability case, the injured party and their expert could argue that the manufacturer could have made the U.S. product safer and chose not to do so. They would argue that this makes the product defective, that there is a reasonable alternative design, and that the manufacturer should be liable for any injuries or damage.
- Corrective actions (including recall)
Rutger: In the EU, risk assessment is a crucial step to determine the appropriate course of action in case of a suspected unsafe product. Specific risk assessment guidelines apply, which may differ from pre-market risk assessment procedures. Risk levels can be low, medium, high or serious. With a serious or high risk in a consumer product, measures to reduce the risk may include withdrawal from the market or recall. Lower levels of risk normally lead to less rigorous measures. It may then be sufficient to add warning labels on the product or to improve the instructions to make the product safe. The risk assessment process involves considering the consumers at risk (especially vulnerable groups like children), the severity of potential harm, and the probability of its occurrence. The goal of the EU risk assessment guidelines is to standardize the approach market surveillance authorities take across the EU, ensuring that products are evaluated consistently and effectively for the safety of European consumers. Risk assessments carried out by economic operators are not binding on Member State authorities who are responsible for carrying out their own risk assessment. It is therefore possible for an authority of a Member State to come to a different conclusion regarding the risk assessment. How does this process operate in the US? How should economic operators determine the appropriate course of action? What criteria do US authorities employ to determine whether a product warrants a recall?
Kenneth: CPSC law says that a report to the CPSC is necessary if the product has a defect which could create a substantial product hazard or if the product, even if there is no defect, poses an unreasonable risk of serious injury or death. A defect could result from:
- a manufacturing or production error;
- the design of, or the materials used in, the product
- a product’s contents, construction, finish; or
- a product’s, packaging, warnings, and/or instructions
After a report is filed with the CPSC, the CPSC staff considers the following factors before deciding what corrective action, if any is necessary:
1) The utility of the product.
2) The nature of the risk of injury that the product presents.
3) The necessity of the product.
4) The population exposed to the product, and its risk of injury.
5) The obviousness of such risk
6) The adequacy of warnings and instructions to mitigate the risk
7) The role of consumer misuse of the product, and the foreseeability of such misuse
8) The Commission’s experience and expertise
9) The case law interpreting federal and state public health and safety statutes
10) The case law in the area of products liability
To determine if there is a substantial product hazard, the CPSC considers the pattern of defect, the number of products distributed in commerce, and the severity of the risk (probability of harm and the severity of the consequences).
If a corrective action is agreed to by the manufacturer or seller, the law requires that the manufacturer or product seller offer one of these remedies – recall, refund, or replacement.
The CPSC does not engage in risk assessment in making this decision and many recalls are undertaken where there have been incidents but no injuries or deaths.
Rutger: In the EU, corrective actions can be done either by a manufacturer on a voluntary basis or through compulsory measures taken by authority. How does this work in the US? Do US authorities have the power to enforce a recall? What guidance would you offer if a company disagrees with a decision by a U.S. authority to mandate a recall?
Kenneth: The CPSC does not have the authority to force a manufacturer to institute a recall or other corrective action. The only way to do this is for the government to sue the manufacturer and ask a judge to order the manufacturer or seller to recall the product. This rarely happens and is a very long process. Instead of suing, the CPSC has recently decided to issue a unilateral press release where the manufacturer refuses to recall the product. This is faster and much easier to do as the manufacturer does not have to approve the press release. The release will describe the hazard and then ask the consumer to stop using the product. The CPSC does not ask the consumer to return the product to the manufacturer for a refund or replacement, but the consumer may do so on their own.
So, if a company disagrees with the corrective action requested by the CPSC, they can just refuse to do a recall and the CPSC might issue a press release. That may be all that happens unless accidents continue. In that case, the CPSC could decide later to issue another press release or sue the company in court to force a recall.
Rutger: How would you handle a situation in which a multinational company finds itself in a scenario where US authorities deem a recall is appropriate for a particular product, while the EU’s risk assessment suggests a low or medium level of risk?
Kenneth: The first step is to convince the CPSC that there is no defect or, if there is, that it does not create a substantial product hazard. If there is still a disagreement, the company can say no and then a unilateral press release might be issued by the CPSC.
Rutger: How would you try to convince the CPSC?
Kenneth: A company can hire experienced CPSC legal counsel who can, in turn, hire an independent engineering expert to evaluate the product, the incidents that have occurred or could have occurred, and to provide an opinion as to whether there is a defect or substantial product hazard and that no corrective action or recall is necessary. This report would be provided to the government. However, obtaining a favorable report does not guarantee that the CPSC will agree with you, but it is a starting point.
Rutger: In the EU, the available remedies for manufacturers in case of a product recall vary depending on the nature of the product and the defect. Typically, these remedies include replacement, repair, or a full refund. A significant shift is on the horizon with the impending introduction of the EU General Product Safety Regulation (GPSR) (see Understanding the GPSR and what it could mean for EU businesses | Article | Sporting Goods Intelligence (sgieurope.com)). Under the GPSR, consumers must be offered at least two remedies, unless such a requirement would be deemed disproportionate in specific circumstances. Furthermore, the GPSR mandates a universal “stop use” policy for all recalled products. Additionally, it stipulates that non-portable items must be retrieved directly from consumers. To illustrate, this means that in the case of e.g. a dangerous car or cargo bike, the manufacturer would be obligated to retrieve the vehicle from the consumer (an aspect that may not yet be widely recognized by various industries). What is the current practice in the US? Based on my own experiences, it seems that organizations like the CPSC tend to prioritize issuing refunds as the standard remedy in recall situations, even though repair may be a more straightforward or sustainable solution. Do you find this to be consistent with your observations? Could you provide insight into the approach being followed by various authorities in this regard?
Kenneth: The CPSC does prefer offering refunds, but it allows for repairs or replacements if the repairs are effective and the replacement product fixes the safety problem. The company does not have to offer alternative remedies as required by the GPSR and rarely would the CPSC require that the manufacturer retrieve the product. However, a product such as an installed appliance that has a safety problem would have to be replaced or repaired by a service company hired by the manufacturer or seller.
- Product liability
Rutger: The EU has established a framework for product liability through the Product Liability Directive (85/374/EEC), which mandates that producers are liable for damages caused by defective products. Within the EU, individual member states implement this directive into their national laws, which means that product liability cases are primarily handled in national courts following the specifics of each member state’s legal system. However, interpretations and nuances can be referred to the Court of Justice of the European Union (CJEU) for clarifications on EU law, ensuring a harmonized approach across member states. How is this framework established in the US?
Kenneth: There is no national product liability law and thus most product liability cases are handled by state courts. The main exception is if the injured party and all of the other parties reside in or are located in different states. In that case, the lawsuit can be filed in federal court, but the case is still subject to the state law that the judge determines is applicable which is usually the law of the state where the injured party lives or the state where the manufacturer or seller are located.
Rutger: As you mentioned, product liability law is viewed as a matter for each state to establish as it is local law. Would it make sense to avoid selling in states with particularly onerous regulations?
Kenneth: Some companies have done that. But the states with the most onerous regulations are usually the big states (i.e. California, Illinois, and Pennsylvania) and therefore not selling in those states could impose a significant financial burden from a reduction in sales. Plus, products can move around, so not selling in certain states doesn’t guarantee that the product will not be used in a state with onerous regulations.
Rutger: In the EU, there is a perception that manufacturers in the United States are required to provide warnings for hazards that are considered self-evident. A common example of this is a microwave manufacturer including warnings against putting live animals into microwaves. Curiously, we’re now seeing the practice in the EU of labeling coffee cups with statements like ‘coffee is hot’ making its way from the US to Europe. While it might seem self-evident that coffee is hot, it’s seems that individuals in the US have successfully claimed damages for burning themselves in such cases. This trend raises questions about whether we may soon witness similar claims here in Europe. What is your perspective on the general perception among people in the EU regarding the seemingly aggressive product liability regime in the US as compared to the legal landscape in the EU? Do you believe this perception reflects the reality, and could you shed light on key differences or similarities in product liability approaches between these two regions?
Kenneth: On your first question, injured parties do make claims even when the hazard is obvious. They always have an excuse. Usually, it is that they didn’t see the warning because of where it was located or the warning was unclear as to the hazard or avoidance procedure or the warning did not adequately describe the severity of the consequences of encountering the hazard. In the coffee example, the injured party won because the coffee was much hotter than coffee served in other restaurants and therefore, the risk of harm was much higher. Just saying “coffee is hot” does not adequately inform the consumer about coffee that is so hot that it can cause severe burns in a few seconds.
Concerning my perception of the two product liability regimes, I am not familiar enough to compare them. It is fairly easy to file a lawsuit in the U.S., and the hope by the plaintiff’s lawyer is that the company or their insurance company will decide to settle the case to avoid the cost of defending it or avoid the risk of a substantial verdict and the resulting bad publicity. That can result in a substantial settlement. There is also the risk that the attorney will file a “class action” on behalf of everyone who owns this allegedly unsafe product even if those consumers have not been damaged or injured.
- Product liability insurance
Rutger: Due to the potential for large awards and settlements in the US, claims can be considerably more expensive than in European countries. This is one of the reasons why European product liability insurance policies by default exclude coverage in the US. Is product liability insurance reasonably priced for small and medium-sized enterprises operating in the US? What categories of damages and expenses are typically encompassed within its coverage?
Kenneth: The cost of insurance is based on many factors such as the return the insurance company makes on its investments. Also, an insurance company has reasons for wanting to insure or not insure a particular company or a particular product. With that said, I believe that companies are able to find adequate insurance in the U.S. at a cost they can afford.
The cost is affected by the amount of the coverage and the deductible (also known as “self-insured retention”) and whether the coverage is based on when the accident occurs or when the claim is made. Coverage includes all direct damages suffered by the injured party, and usually all costs of defense, but does not cover peripheral damages such as lost profits or cost of a recall or other corrective action or punitive damages.
Rutger: Are there specific prerequisites that insurers impose as conditions for obtaining coverage?
Kenneth: Any good insurance company will quickly evaluate a company’s efforts to make a safe product and their ability to defend themselves if some problem arises. Also, the insurance company will be interested in the manufacturer’s and seller’s ability to quickly determine if the product has a safety issue and then undertake some effective corrective action that would minimize future risk to customers. So the manufacturer wants to be prepared to convince the insurance company that the risk involved with their products is low and that there is no expectation that accidents would occur and claims would be made.
Rutger: Product liability insurance generally excludes coverage for recall expenses. Some companies may opt to obtain supplementary recall insurance, albeit this often comes at a substantial cost. Within several EU jurisdictions, specific recall expenses may be legally covered by a standard product liability insurance policy. Surprisingly, many companies appear to be unaware of this provision. How does this compare to the situation in the US?
Kenneth: Insurance companies have told me that the underlying liability policy (which excludes recall costs) does cover a small amount of costs that could be associated with a recall, but that the amount is so small that if the recall costs any significant amount of money, this liability policy won’t be of much help.
Rutger: To conclude this interview, may I ask for a final piece of advice? Do you have a golden tip for consumer goods manufacturers who are already selling in the US or looking to enter the US market?
Kenneth: If you are selling in the U.S. market and have had no incidents or injuries, you might have an independent audit done by a product safety lawyer or product safety consultant to see if there are any deficiencies in what you are doing that should be improved. If you are considering entering the U.S. market, having an experienced product safety person look at the product and the warnings and instructions and marketing literature would be helpful in giving you an idea of future risk. If the company wants to buy insurance that covers U.S. sales, that insurance company might perform the audit for you. If you have had incidents and injuries, then you should hire experienced product safety/product liability counsel to review what has happened and tell you whether you have to report to the CPSC, whether you should improve the design of your product, and whether a recall or some other corrective action should be undertaken.
Rutger: Thank you!
By Rutger Oldenhuis
As the dust settles after December 13, 2024 – of course you all know by now that’s the date when the General Product Safety Regulation (GPSR) came into effect – numerous ambiguities remain. Flaws, gaps, and even loopholes are crying out for more clarity. At the time of writing this blog, we are still awaiting the European Commission’s guidance document, which is expected to provide some of this much-needed clarity.
It was all the more surprising to discover DELEGATED REGULATION (EU) 2024/3173, issued on August 27, 2024, under the GPSR. Is it just me, or is this regulation mysteriously hard to find online? Would it sound paranoid to suggest that this scarcity might be intentional, given its potentially significant implications for companies selling consumer products in the EU? Here’s what’s going on.
Unlike in for example the United States, regulators in the EU cannot simply declare a product unsafe. A risk assessment must first be conducted based on established guidelines. Depending on the outcome, the product may indeed need to be withdrawn from the market, especially if a “serious risk” is identified.
In the US, no such structured risk assessment process exists, which can lead to a degree of arbitrariness in decision-making. After all, when exactly is a product deemed dangerous enough to be removed from the market? Often, a recall isn’t necessary, even if a serious accident has occurred with a product. Conversely, there are situations where a recall is necessary without any incidents being reported. Whether a recall is warranted depends heavily on the specific circumstances and must be evaluated on a case-by-case basis.
The EU therefore has a structured methodology that regulators are supposed to follow before taking corrective action. Conducting such a risk assessment requires considerable knowledge and experience. Unfortunately, I regularly notice that this knowledge and experience are lacking among authorities. They either do not apply this method correctly or fail to do so consistently. It is crucial to scrutinize the assessment thoroughly. I am not exaggerating when I say that, in some cases, the very survival of a company can depend on the outcome. Unfortunately, companies do not always have the resources to legally challenge a flawed risk assessment, even though doing so could often yield positive results.
Anyway, the good thing about the current system is that there are actually guidelines to evaluate against. In that sense, you’re not at the mercy of an authority’s opinion. That authority must be able to provide a convincing risk assessment. And that’s exactly where things are currently going wrong.
Under the new Delegated Regulation, regulators are now empowered to assume the highest risk level in certain situations without conducting a risk assessment. This can happen, for instance, when specific injuries have been reported. However, this approach undermines the entire risk assessment methodology because the severity of an injury alone does not indicate the likelihood of its occurrence. Remember that under the GPSR, companies are required to report serious accidents. Under this Delegated Regulation, authorities would be empowered to conclude that a serious risk exists – and mandate a full recall – without conducting a risk assessment.
Moreover, regulators can assume the highest risk level without conducting a risk assessment if a company has voluntarily taken corrective actions. In other words, if a company chooses to err on the side of caution and voluntarily warns its customers, even when the risk isn’t serious, regulators could still independently determine that a “serious risk” is present – triggering all the consequences that follow.
Why is it necessary to grant regulators more authority to pull products from the market without conducting any risk assessment? I find this both puzzling and concerning. It risks distorting risk evaluations and could lead to overly cautious or even unjustified regulatory actions. It seems to undermine the very principles of evidence-based regulation. It could also lead to companies becoming much more reluctant to take voluntary corrective actions.
Then again, in a world where bizarre and absurd decisions seem to be increasingly common, this one probably won’t make it to the history books.
By Rutger Oldenhuis
Once upon a time, back when I was just a young lad, there was a song my brothers and I occasionally hear on the radio – a song that seemed to cast a spell over us. We didn’t know what it was about, nor could we name the band, but something about it was almost magical. And this was before we’d even seen the music video! That song became iconic, a symbol of our youth, resonating with us deeply despite remaining a mystery for years.
Much later, one of my brothers became determined to solve that mystery. He spent an entire day combing through a record store to find that song. This was in the pre-internet days – no Google, no Spotify, no SoundHound to lean on. Just pure determination. And after hours of searching, he finally succeeded! The mysterious song had a name: Weekend, by a Dutch band called Earth & Fire (not to be confused with Earth, Wind & Fire). It felt like solving a puzzle, a small triumph over the unknown.
I often think back on this story – my brother, investing a whole day to find that single piece of music. How did he even go about it? Where did he begin? Did he sing a few bars to the store clerks, hoping they’d recognize it? I’ll have to ask him next time I see him.
Reflecting on that search, it struck me how similar it is to the challenges companies face in navigating European market access. Trying to bring a product to Europe is a lot like that record-store search – a maze of regulations, each one potentially applicable to your product. Where do you start? Which regulations matter? How do you make sense of them?
I’ve written extensively about the upcoming GPSR (General Product Safety Regulation), and for good reason. This blog will likely be published just as the GPSR starts applying on December 13, 2024. But Brussels hasn’t been resting; there’s a wave of new ESG and product regulations approaching. Take a look at just some of the regulatory wave on the horizon:
- Corporate Sustainability Reporting Directive
- Corporate Sustainability Due Diligence Directive
- Ecodesign for Sustainable Products Regulation
- Packaging and Packaging Waste Regulation
- Deforestation Regulation
- Green Claims Directive
- Waste Framework Directive
- Directive on Empowering Consumers for the Green Transition
- Machinery Regulation
- Revision of Textile Labelling Regulation
And that’s just scratching the surface. Navigating these requirements is a monumental task for legal and compliance teams in large multinational corporations, and for small- and medium-sized enterprises, the challenge is even greater. Too often, this task is viewed as a burdensome expense. After all, who really wants to spend an entire day in a record store just to track down one song?
Yet, I can’t emphasize this enough: if selling products is at the core of your business, then product compliance and safety should be at the heart of your business processes. Making sense of these regulations is not just a legal obligation; it’s an investment. After all, how heroic can your sales team really be if the product they champion turns out to be unsafe and must be pulled from the market? Compliance isn’t just a backstage function – it’s the foundation that keeps your product, and your reputation, safe and strong.
There’s one line in Weekend where I hear, “I wanna have the pope a night apart”. Some sources, though, say it’s actually, “I wanna have the whole and not a part”. Not all mysteries can be solved, no matter how much time we spend in a record store.
By Rutger Oldenhuis
I’m writing this blog while sitting on a train to Amsterdam. Once I arrive and walk to my destination, I’ll need to watch out for a fairly recent phenomenon: fatbikes. I live in a quiet little village, so I thought it wasn’t that big of a deal. But whenever I come to Amsterdam, I suddenly understand the alarming Dutch news headlines much better. These things can be dangerous! Dozens of them zoom past, often ridden by very young people going at high speeds. It’s no wonder they’ve already caused so many accidents. The issue has caught the attention of politicians as well, and as is often the case, you’re immediately bombarded with half-baked solutions. The most popular ones? A minimum age requirement and mandatory helmets.
But what’s really going on here? Anyone with a bit of e-bike knowledge can easily spot the two main issues. Firstly, these bikes often significantly exceed speeds of 25 km/h. Secondly, they are often equipped with a throttle feature, allowing for little to no pedaling effort to maintain motion. Hence, these bikes aren’t allowed on Dutch roads without proper type approval. Plus, if they had the proper approval, the same rules would already apply: a minimum age and mandatory helmets.
Problem solved, right? But for politicians, simple solutions often seem too difficult. Instead of addressing the issue at its core, they’d rather spend time and money creating more rules that will just end up being ignored – because what exactly is the definition of a fatbike, anyway? Or are they planning to lump all e-bikes together and impose a blanket age limit and helmet rule? That’s bound to stir things up in a country as bike-crazy as the Netherlands.
In recent months, Dutch authorities have seized thousands of fatbikes because they didn’t comply with the regulations. This is a great example of how it can be done, as the problem needs to be tackled at its source through effective enforcement.
What else can been done? Quite a lot, if enforcers only had the necessary resources. When fatbikes are sold online, their specifications can sometimes tell you right away if they’re legal or not. Enforcers have the power to conduct internet “sweeps” to track down violators. Moreover, manufacturers outside the EU are not allowed to sell in the EU without having a “Responsible Person” in the EU who can be held accountable for product safety. A Responsible Person could, for example, be the fatbike’s importer. It’s important to note that if dealers (including webshops) directly import fatbikes into the EU, they will each be considered an importer. If there is no importer in the EU (e.g., in case of direct sales to consumers), the manufacturer must appoint an Authorised Representative within the EU.
The details of this Responsible Person must be included on the fatbike or its packaging. And as of 13 December 2024 (when the General Product Safety Regulation enters into force), the online offer must indicate who the Responsible Person is. If there’s no Responsible Person in the EU, selling the product in the EU will automatically be illegal, making it much easier to take action. If there is a Responsible Person, authorities can proactively request them to provide the technical documentation for the fatbike in question. If they cannot provide it, or if the documentation reveals that the bike does not comply with regulations, it will have to be withdrawn or recalled from the market.
It seems that politicians (and their advisors) are unaware of the existing legal framework that allows for the removal of illegal fatbikes from the market. I urge them to invest in resources for enforcement, rather than coming up with these endless half-solutions. It may not solve the problem entirely, but it will be far more effective. What good are (new) rules if there aren’t enough resources to enforce them?
My train just pulled into Amsterdam. Now, where’s my helmet…
By Rutger Oldenhuis
As I wrote in one of my earlier blogs, the upcoming General Product Safety Regulation (GPSR) is food for many more blogs to come. It contains many provisions that go far beyond the current EU General Product Safety Directive (GPSD). In this blog, I would like to draw attention to a new obligation that is introduced in the GPSR: accident reporting. Consumers normally already have a channel to report potentially unsafe products to their national market surveillance authority. However, pursuant to the GPSR, manufacturers must promptly report product-related accidents via the Safety Business Gateway to the competent authorities in the Member State where the accident occurred. The notification should include the product’s type, identification number, and accident details. Additionally, manufacturers must provide any other relevant information upon request.
A legitimate question is: must all accidents, even those without any personal injuries, be reported? The text of the GPSR is somewhat vague but seems to suggest that the reporting obligation pertains only to incidents resulting in death or serious adverse effects on health and safety, whether permanent or temporary, including injuries, bodily harm, illnesses, and chronic health effects. The expected guidance from the Commission may clarify whether indeed this is the correct interpretation.
Manufacturers (or, if not based in the EU, the appropriate responsible economic operator in the EU) must provide accessible communication channels, such as a telephone number, electronic address, or a dedicated section of their website, to enable consumers to submit complaints and report any accidents or safety issues with a product. Manufacturers are then, in fact, expected to blow the whistle if reports of accidents indicate a reason to do so.
Parallel to the reporting obligation of manufacturers, other economic operators also have an obligation to follow up on accident reports. Importers and distributors must promptly inform the manufacturer if they become aware of an accident caused by a product they have placed on the market. The manufacturer must then notify the relevant authorities or instruct the importer or distributor to do so. If the manufacturer is not established in the EU, the appropriate responsible economic operator based in the EU must notify the relevant authorities.
Additionally, providers of online platforms must cooperate in reporting accidents by promptly notifying the Safety Business Gateway of any incident reported to them that results in a serious risk or actual harm to consumer health or safety caused by a product on their marketplace. They must also inform the manufacturer of such accidents.
And if that isn’t all, pursuant to the EU Whistleblower Directive, employees are encouraged to notify the relevant authorities of breaches of EU law, among others in the field of product safety and compliance. The Whistleblower Directive applies to legal entities in the private sector with 50 or more workers.
The implications of this should not be underestimated. Although reports of accidents may not automatically lead to an obligation to carry out corrective actions (like a recall), receiving multiple reports of accidents involving the same product will obviously trigger authorities to investigate the issue. And now, I’m trying to think of a witty way to end this blog, but nothing comes to mind. So, let me end with a loud fuuuuuut!!!
By Rutger Oldenhuis LLM
Swedish Hövding revolutionized cyclist safety with an innovative airbag system. Claimed to offer up to 8 times better protection than traditional helmets, Hövding sold over 300,000 units over a span of 12 years. The avoidance of “helmet hair” is an important and notable advantage of using an airbag instead of a traditional helmet. No wonder Hövding’s main market is Sweden, where urban cyclists are particularly mindful of their appearance.
However, a shocking turn of events occurred in December 2023 when Hövding’s board filed for bankruptcy, resulting in the loss of jobs for 42 employees and 8 consultants. This decision stemmed from the Swedish Consumer Agency’s actions: a temporary sales freeze on November 1, 2023, followed by a permanent sales freeze and product recall on December 15, 2023. The Swedish Consumer Agency (SCA) alleged that the airbag failed to activate in 27 reported incidents, leading to head injuries.
One factor that may have influenced the SCA’s decision was the late 2022 release of a secret recording by Swedish media from within Hövding. This recording fueled allegations that the company was aware of design flaws in the airbag but continued to sell it nonetheless.
Despite the potentially incriminating recording, Hövding successfully contested SCA’s conclusions before the Administrative Court. According to the Court’s ruling, Hövding argued that the 27 cases did not justify claims that the airbag provided inadequate protection. They explained that their product’s algorithm aligned with its intended design and conducted risk assessments in line with European Commission guidelines. These assessments indicated a low risk of head injury due to inadequate protection. Collectively, these reported cases did not warrant an immediate recall of all airbags from the Swedish market.
The Court recognized that the airbag must be designed to provide cyclists with adequate protection, but it also observed disagreements between Hövding and the SCA on the extent, likelihood, and severity of risks associated with using the product, as well as its intended protective capabilities. Considering this ongoing dispute and recognizing the substantial impact of a prohibition on Hövding’s business and legal challenges, the Court determined that the appealed decision would not take effect until the Court made a final ruling. Interestingly, the secret recording didn’t appear to impact the Court’s decision. Hövding’s request for suspension of the permanent sales freeze and recall was approved, offering a glimmer of hope. However, the damage inflicted by SCA’s actions proved insurmountable, leading to the company’s closure.
This case underscores the potential repercussions of regulatory actions on businesses as well as the importance of comprehensive risk assessment in case of a suspected unsafe product. A well-prepared risk assessment can significantly assist a business in demonstrating that a recall would not be proportionate.
While supervisory authorities play a crucial role in safeguarding society from harmful products, similar to businesses, they are also required to adhere to specific rules and guidelines. This court case illustrates that a supervisory authority cannot simply disregard this fact, especially without providing further justification or conducting their own risk assessment. All too often, supervisory authorities ignore their responsibilities to carry out a risk assessment as a basis for deciding what corrective action is necessary and proportionate. It is reassuring to witness a court recognizing this and reminding the authority of their responsibilities.
This case also emphasizes the value of taking legal action when disagreeing with regulatory decisions. Unfortunately, in Hövding’s case, this action came too late, affecting not only the company but also the fashionable cyclists of Sweden, who now face the return of “helmet hair”.
Deventer, 19 December 2023
A recent consumer experience highlighted a concerning issue with a pair of expensive jeans that began to stretch and wrinkle just 1.5 years after purchase. This issue went beyond ordinary wear and tear, prompting the consumer to invoke their legal guarantee from the seller. However, their claim was initially rejected, with the seller citing ConsuWijzer, a website operated by the Netherlands Authority for Consumers and Markets (ACM). The rejection was grounded in the assertion that the Netherlands lacked a specific warranty period, as it was contingent upon the product’s expected lifespan. Notably, the jeans in question were sold with a 1-year warranty.
For consumers seeking clarity in this matter, the Dutch Consumers’ Association’s website added to the confusion by stating that the legal warranty period was 6 months before April 27, 2022, and 12 months thereafter. In reality, both ACM and the Dutch Consumers’ Association misinterpreted Dutch law.
European legislation unequivocally mandates a minimum legal guarantee period of 2 years, with member states required to incorporate this provision into their national laws. While the Netherlands did not explicitly mention the two-year period in its legislation, it did not intend to offer warranties of less than 2 years, as that would contravene EU regulations. Despite the seeming complexity of the legislative language, the intent, as elucidated in explanatory notes to the Act, was to afford consumers a minimum warranty period of 2 years, particularly for products expected to function without issues for more than 2 years. Furthermore, the EU Directive grants member states the authority to establish warranty periods exceeding 2 years.
Unfortunately, the nuances of Dutch law are not always easily grasped. ACM erroneously linked the warranty period to a product’s expected lifespan, which is a flawed perspective. Not all products are designed for long-term use; for instance, consider a pack of balloons, a simple example where each balloon can be used only once. In such cases, a warranty claim would not be applicable. Nevertheless, if a consumer were to use one of these balloons 23 months after purchase and found it to be defective, they would still be entitled to legal warranty coverage, as the 2-year period had not lapsed.
The Dutch Consumers’ Association further complicated matters by conflating the timeframes for reversing the burden of proof (previously 6 months, currently 12 months) with the statutory warranty period.
Both ACM and the Dutch Consumers’ Association may have inadvertently caused consumers to miss out on valid warranty claims.
RecallDesk recently alerted ACM to this misunderstanding, leading to a prompt revision of their website’s content. The updated information now accurately conveys that consumers in the Netherlands are entitled to a minimum of 2 years of legal warranty. We hope that other organizations, including the Dutch Consumers’ Association, will swiftly follow suit, providing precise guidance to consumers.
By Rutger Oldenhuis LLM – Published in Bike Europe Magazine 6-2023
Interesting news from Recall Land. The safety of Apple’s iPhone 12 has come under scrutiny, as per findings from French regulatory authorities. Their testing revealed that this particular smartphone model did not comply with the legal limits set for radiation emissions. This news is notable not only for the reported safety issue, but perhaps even more so for the safety issues that went unreported. The question is how long smartphone makers and app builders can get away with those safety risks. With the impending EU General Product Safety Regulation (GPSR), smartphone manufacturers and app developers may face a rise in product safety and liability claims. That is, unless they make significant alterations to the design and functionality of their products. Or should they?
While offering numerous benefits and conveniences, smartphones have also introduced various concerns, especially when it comes to their influence on our lives and the lives of children. An increasing number of studies are surfacing, revealing how smartphones have significantly altered our lives, often in ways that aren’t positive. Read along with me: shortened attention spans, sleep disruption, impaired social skills, mental health issues, physical health issues, decreased academic performance, cyberbullying, addiction, decreased creativity and imagination, reduced memory and learning, decreased creativity and imagination, to mention just a ‘few’ examples. And I haven’t even mentioned the number of injuries as a result of distracted driving. In the USA, that number is not far behind the number of deaths caused by smoking.
It’s no wonder that there is a growing demand for action to address these issues. Schools banning mobile phones serve as an example of this trend. Interestingly, European Parliament Member Kim van Sparrentak is leading an initiative to prohibit the addictive design practices used by smartphone manufacturers and app developers. I highly recommend reading her comprehensive report on the adverse effects of smartphones, supported by scientific sources.[1]
The draft report suggests that new EU rules are needed to make smartphones and apps less addictive, but I wonder if that is necessary. With the current EU General Product Safety Directive we already have a legal safety net in place to ban unsafe consumer products from the EU market. And to avoid any doubt, under the upcoming GPSR, the term ‘product safety’ takes on a much broader meaning and refers to the WHO’s definition of ‘health’. The WHO defines ‘health’ as a state of complete physical, mental and social well-being and not merely the absence of disease or infirmity. Under the GPSR, when assessing the safety of digitally connected products likely to have an impact on children, manufacturers should ensure that the products they make available on the market meet the highest standards of safety, security and privacy by design, in the best interests of children. Software (embedded and standalone) also falls under the product definition of the GPSR. I don’t think it would be difficult for an average lawyer to demonstrate that certain app developers have intentionally made their products addictive and thus harmful. I also suspect that establishing causality between the use of these apps and health damage will not be challenging.
However, just like with cigarettes and alcohol, I am afraid the damage has already been done. Society can no longer function without smartphones. I wouldn’t be surprised if we find ourselves facing excise duties on smartphones in the near future, while being cautioned about their potential risks.
When I visited a supermarket in Germany earlier this year, my 6-year-old son noticed the rather explicit pictures with health warnings on cigarette packages and asked me: “Dad, what is THAT?” “Uhhm, yeah, that is to warn people that smoking is very harmful to your health.” “But dad, that’s REALLY stupid. If you know a product is harmful, why would you sell it???” I rest my case.
[1] DRAFT REPORT on addictive design of online services and consumer protection in the EU single market (2023/2043(INI)).
By Rutger Oldenhuis LLM – Published in Bike Europe Magazine 5-2023
In September 2018, a terrible accident took place in the Netherlands. An electric vehicle, called a ‘Stint’, which is a small electric cart primarily used for transporting young children, was hit by a passenger train. These vehicles were commonly used in the Netherlands by childcare centres for transporting groups of children. As a result of the collision, four children lost their lives and two other individuals, a child and the adult driver of the Stint, were seriously injured.
Five years later, the Dutch Public Prosecution Service (OM) is bringing charges against two companies responsible for producing and selling the Stint, along with two company executives, for their involvement in multiple criminal offenses. This decision comes after an extensive investigation that was initiated following the accident in 2018. Based on the findings of this investigation, the OM concluded that the Stint qualified as a harmful product as defined in the Dutch Penal Code. Many studies would show that the product was unsafe on numerous points. For example, it allegedly did not meet the safety requirements as laid down in the Machinery Directive and the EMC directive. An investigation showed that the Stint had no proper brake construction, no brake switch, a faulty throttle, no start-up protection and no presence detection. The OM also reported that there were claims indicating that the Stint had undergone the CE marking procedure, despite this being untrue. The Declaration of Conformity (DoC) and manual wrongly highlighted its adherence to the safety requirements outlined in the Machinery Directive. The suspicion is that the individuals in question were well aware of the harmful effects associated with the product, yet chose to remain silent about it. Additionally, the individuals under suspicion are facing charges related to forgery. They falsely informed authorities that the Stint had undergone the appropriate CE marking procedure when applying for road admission. Furthermore, they altered their own manual by removing all references to this procedure shortly after the 2018 accident.
The Stint issue could have happened in any country and clearly shows that manufacturers must take product compliance and product safety very seriously. Of course, most accidents don’t receive the extensive news coverage that the Stint case did. However, with the introduction of the EU General Product Safety Regulation, manufacturers will be obligated to report accidents caused by their products, extending the government’s reach.
The people behind the Stint did not wish for or foresee this terrible accident. And yet that is exactly what you should do as a product manufacturer: contemplate worst case scenarios during the design and development phase and ensure that the product is designed to withstand them. Unfortunately, product compliance and product safety are all too often seen as an annoying expense. However, not taking these critical aspects seriously can come at a great cost. Besides the potential product risks for end-users, producers can be held criminally accountable if they wilfully and knowingly put a harmful product on the market.
The Stint case may also serve as a reminder that signing a DoC is much more than just a formality and should not be taken lightly. By signing a DoC, the signatory is taking legal responsibility that the product conforms to the specified requirements. This means that if the product does not actually conform, the signatory and/or the company could be held liable. For market surveillance authorities, a DoC is like low-hanging fruit. An incorrect or inaccurate DoC is a smoking gun and can easily lead to the conclusion that a company lacks effective safety processes. It underscores the importance of having product compliance and safety higher on the boardroom agenda. Compromising on product compliance and product safety budget is a dangerous balancing act. In the end, prioritising safety goes beyond merely establishing the right processes. It is fundamentally a mindset.
