Helmet hair

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”.

Dutch authority (ACM) adopts RecallDesk’s recommendations to revise legal warranty information on their website

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.

Smartphones are the new cigarettes

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)).

Taking safety seriously

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.

Hoe zit het nou met de wettelijke garantietermijn in Nederland? Mag die korter zijn dan twee jaar?

Het gebeurt regelmatig: winkels in Nederland die richting consumenten een beroep doen op een garantietermijn van een jaar. Desgevraagd wordt uitgelegd dat Nederland geen wettelijke garantietermijn heeft bepaald, maar die laat afhangen van de eigenschappen van het product. Daarbij wordt dankbaar gebruik gemaakt van informatie verstrekt door diverse overheidsinstanties. Maar klopt die informatie wel? Geldt er in de EU geen minimale wettelijke garantietermijn van twee jaar? RecallDesk heeft dit uitgezocht. De verrassende uitkomst leest u in dit artikel.

“De duur van de wettelijke garantie mag de verkoper of fabrikant niet zelf kiezen. Want dat volgt uit de wet. Veel consumenten denken dat zij volgens de wet standaard recht hebben op 2 jaar garantie. Dit komt uit Europese regels. Maar in Nederland staat geen vaste wettelijke garantietermijn in de wet. Hoelang hebt u dan wettelijke garantie? Zo lang als u mag verwachten dat uw product meegaat. In onze wet staat namelijk dat een product moet bieden wat u ervan mag verwachten. Dat is per product anders. En dat kan korter of langer zijn dan 2 jaar. Het hangt af van alle eigenschappen van uw eigen product. Gaat uw product eerder kapot dan u mocht verwachten? En hebt u het normaal gebruikt? Dan hebt u volgens de wet recht op reparatie of vervanging.”

Aldus de website van de ACM (ConsuWijzer).[1] De Kamer van Koophandel verwijst dankbaar naar de ACM.[2] De Consumentenbond noemt geen termijn en spreekt alleen over de termijn die geldt voor de omkering van bewijslast (zes maanden onder de oude Richtlijn, twaalf maanden onder de huidige Richtlijn).[3] Ook de Rijksoverheid verwijst naar de ACM.[4] Op een andere website van de Rijksoverheid wordt dan juist weer uitgelegd dat consumenten in alle lidstaten van de EU (plus Noorwegen, Liechtenstein en IJsland) recht hebben op minimaal twee jaar wettelijke garantie.[5] Hoe zit het nou?

Artikel 10(1) van Richtlijn (EU) 2019/771 bepaalt dat de verkoper jegens de consument aansprakelijk is voor elk conformiteitsgebrek dat bestaat bij de levering van de goederen en dat aan het licht komt binnen twee jaar na dat tijdstip. Het is een Europese Richtlijn die de minimumrechten vaststelt voor consumenten bij de aankoop van consumptiegoederen. Deze Richtlijn biedt lidstaten geen mogelijkheid om hiervan af te wijken in het nadeel van consumenten. Wel kunnen lidstaten langere termijnen handhaven of invoeren. Nederland heeft weliswaar (en onhandig genoeg) geen termijn opgenomen in de relevante wetgeving, maar heeft daarmee niet beoogd om minder dan twee jaar garantie toe te staan (hetgeen ook in strijd zou zijn met EU wetgeving). Dat kan onder andere worden opgemaakt uit de relevante passages van de Memorie van Toelichting bij Boek 7 van het Burgerlijk Wetboek, destijds bij de omzetting van artikel 5(1) van Richtlijn (EU) 1999/44 (de voorganger van artikel 10(1) van de huidige Richtlijn) in artikel 21 van boek 7 van het Burgerlijk Wetboek:

“Artikel 5 lid 1 bepaalt dat de verkoper krachtens artikel 3 aansprakelijk is wanneer het gebrek aan overeenstemming zich manifesteert binnen een termijn van twee jaar vanaf de aflevering van de goederen. Titel 7.1 BW kent geen vaste (verval)termijn bij het verstrijken waarvan de koper geen beroep meer kan doen op de rechtsgevolgen van non-conformiteit. Dit betekent dat ook na meer dan twee jaar kan blijken dat de zaak niet aan de overeenkomst beantwoordt, en de koper zijn in artikel 7:21 BW genoemde rechten kan uitoefenen. Een belangrijke factor daarbij is uiteraard de levensduur van de zaak. Met name bij duurzame consumptiegoederen is de levensduur daarvan veelal langer dan twee jaar. Met het systeem van titel 7.1 BW wordt meer recht gedaan aan de verscheidenheid van zaken, zodat de termijn van twee jaar uit artikel 5 lid 1 niet wordt overgenomen. In artikel 5 lid 1 wordt voorts bepaald dat indien voor de uitoefening van de in artikel 3 lid 2 vermelde rechten in de nationale wetgeving een verjaringstermijn geldt, deze niet korter mag zijn dan twee jaar vanaf de aflevering. De verjaringstermijn ter zake is in titel 7.1 BW geregeld in artikel 23 lid 2. Deze termijn is twee jaar en begint te lopen op het moment dat de consument het gebrek aan de verkoper meldt. Omdat dit moment nimmer eerder valt dan het moment van aflevering, behoeft deze bepaling geen aanpassing.”

Met andere woorden, in Nederland geldt een minimale garantietermijn van twee jaar. Voor meer duurzame producten mag een langere garantietermijn worden verwacht. De overheid doet er goed aan om alle informatie over wettelijke garantie die door overheidsinstanties wordt verspreid, hierop aan te passen.

Voor vragen over wettelijke garantietermijn, of andere vragen op het gebied van garantie (waaronder fabrieksgarantie) of consumentenrechten, kunt u (ook) terecht bij RecallDesk.

[1] Hoelang heb ik garantie en welke rechten heb ik dan? | ACM ConsuWijzer

[2] Garantie geven | Ondernemersplein (kvk.nl)

[3] Nieuwe regels garantie | Consumentenbond

[4] Welke garanties heb ik op een product? | Rijksoverheid.nl

[5] Wat zijn mijn rechten als ik een product koop in een Europees land? | Rijksoverheid.nl

Online platforms become quasi-regulators

By Rutger Oldenhuis LLM

The rapid growth of e-commerce has transformed the way we shop, allowing us to purchase a wide range of products conveniently from online marketplaces. However, this convenience also brings certain risks, particularly when it comes to product safety. Too often, we see products sold through online platforms that do not comply with relevant EU product legislation. It is not uncommon to find products subject to recalls still being available on online marketplaces. The enforcement of product safety regulations on online marketplaces has traditionally posed challenges for authorities. However, this situation is anticipated to undergo a significant transformation with the implementation of the upcoming EU General Product Safety Regulation (GPSR). An entirely new section has been included with obligations for ‘providers of online platforms’. This seems to be a real game-changer, not only for providers of online platforms but also for companies who sell products through online platforms. Under the GPSR, online platforms will be obligated to implement a comprehensive set of due diligence measures. These measures will ensure that both the platforms themselves and the traders utilising their platforms adhere strictly to relevant laws and regulations when selling products. To get the gist, here’s an overview of the upcoming requirements:

 

  • Online marketplaces are required to establish a single point of contact for communication with market surveillance authorities in Member States and consumers regarding product safety issues. This contact will also be registered with the Safety Gate Portal, a new web portal to inform the public and enable them to submit complaints.
  • Online marketplaces must set up robust internal processes for ensuring product safety.
  • Online marketplaces are expected to remove dangerous product content from their platforms within two working days following an order from market surveillance authorities.
  • Providers are required to monitor information about dangerous products via the Safety Gate Portal and take appropriate actions, if needed. They must also report any voluntary measures taken to the authority that made the notification.
  • Online marketplaces must process product safety notices within three working days from receipt.
  • Platforms must organise their online interface such that it enables sellers to provide comprehensive information about their products and make it easily accessible to consumers. This includes information about the manufacturer, product identification details, and safety information.
  • Online marketplaces should have mechanisms that enable traders to provide the necessary information and a self-certification declaring their compliance with the regulation.
  • Providers of online marketplaces must suspend services to traders that frequently offer non-compliant products after issuing a prior warning.
  • Platforms are expected to cooperate with market surveillance authorities, traders, and other relevant parties to eliminate risks presented by products offered online.
  • Providers must inform consumers in a timely manner about product safety recalls and publish this information on their online interfaces.
  • The regulation also imposes obligations on providers to cooperate with market surveillance authorities by sharing data about dangerous products, accidents, and product recalls.

Including a bulleted list in a blog may not win the beauty contest, but I hope it clarifies the message that the forthcoming GPSR makes online platform providers quasi-regulators when it comes to product compliance and safety. A clever move if you compare the surveillance capacity of national authorities with the financial resources of Amazon and the like. The message for traders using platforms is really: be prepared. The GPSR will enter into force on 13 December 2024. And yes, that’s a Friday…

EU product safety law going mental

By Rutger Oldenhuis LLM

In my previous blog post, I mentioned that I was in ongoing discussions with the EU Commission about the snag that I found in the new EU General Product Safety Regulation (GPSR). At the time of writing, I am still awaiting a response from the unit responsible for the automotive industry. I can understand that they might need some time to grasp the potential implications of the snag. Coincidentally, I am currently assisting an automotive client in developing a recall procedure. Naturally, I want this procedure to be future-proof, hence, to comply with the GPSR. However, this presents a dilemma. Today, automotive recall procedures typically require customers to schedule appointments with dealers for repairs. Pursuant to the GPSR, a dangerous vehicle, being non-portable, must be collected from the customer directly. It would be helpful if the EU Commission could clarify whether this new approach is strictly necessary or whether there is room for proportionality.

In addition to the far-reaching provisions on recall remedies, the GPSR contains many other provisions that go far beyond the current EU General Product Safety Directive (GPSD), which will be food for many more blogs to come. For example, the GPSR adopts the WHO’s definition of ‘health’, which states: “The World Health Organization defines ‘health’ as a state of complete physical, mental, and social well-being and not merely the absence of disease or infirmity”. As a result, the concept of ‘product safety’ acquires a more expansive meaning and a new dimension. However, it is not an entirely new phenomenon, which can be demonstrated by the following examples. A Dutch tableware company introduced a new product line called ‘Dutch Glory’, featuring traditional Dutch icons such as pancakes, cheese, clogs, and tulips. The problem was that it also featured an illustration of a smiling Anne Frank. After facing criticism, the company removed the products from the market. Another example is a play clay manufacturer who withdrew a “phallic-shaped toy” from the market in response to parental complaints. Given the GPSR’s extensive interpretation of safety and health, we can anticipate an increase in similar recalls.

The GPSR also places a greater emphasis on risk assessment compared to the GPSD. Unless already addressed by Union harmonisation legislation, the GPSR mandates that manufacturers conduct an internal risk analysis and compile technical documentation. This means that a manufacturer must perform a risk analysis and prepare technical documentation before introducing a product to the market in almost all cases. With the adoption of the WHO’s definition of ‘health’, the risk assessment must also incorporate ‘mental health’ considerations. The GPSR, for instance, specifies that a risk assessment “[…] should take into account the health risk posed by digitally connected products, including their impact on mental health, particularly for vulnerable consumers such as children”. This expanded risk assessment approach may influence how we evaluate the risks associated with, for example, gaming, social media, and even emerging platforms like the metaverse. The bicycle industry should evaluate how the new safety principle of the GPSR applies to their specific circumstances and determine its relevance and potential impact.

In the meantime, I hope that the European Commission will soon be able give guidance on the interpretation of the new recall measures for non-portable dangerous products. If there would be room for proportionality, that would be extremely helpful for my clients’ recall procedure. And good for their health.

I wonder if ChatGPT would have spotted this

By Rutger Oldenhuis LLM

I almost missed my deadline for writing this blog. ChatGPT was overloaded already for days, so I really had to write myself. So, let’s continue where I ended my previous blog.
Being a big fan of my blogs, you know I made a comparison with the car industry, where one hardly ever sees a ‘Stop Ride’ recall, despite the often serious risks. You know that I have made a case for fewer ‘stop using your bicycle immediately’ recalls. You also know that this is not going to happen if we take the (provisional) text of the General Product Safety Regulation (GPSR) literally. In fact, dangerous bicycles and cars, being non-portable, will have to be collected from consumers. The text does not leave any room for proportionality. Was this really intended by the EU Commission? Fortunately, the EU Commission also reads my blogs. And guess what? My assessment of the GPSR turns out to be correct. However, that is only for bicycles, not for cars. Since there is already specific sectoral legislation for cars in place that also handles recalls, the GPSR would not apply to cars. The question is whether that is a correct assessment.
It is true that there is sectoral legislation in place for cars, namely Regulation (EU) 2018/858 on the approval and market surveillance of motor vehicles and their trailers. However, if you read what it says about recalls, it is very high level and limited to phrases such as “the manufacturer shall immediately take the corrective measures necessary to bring that vehicle […] into conformity, to withdraw it from the market or to recall it, as appropriate”. And in case of serious risk, the national market surveillance authority will “require without delay that the relevant economic operator take all appropriate corrective measures without delay to ensure that the vehicle […], when placed on the market […] no longer presents that risk”.
Chapter VIII of the GPSR, on the other hand, contains very detailed recall and remedy provisions. For example, a recall notice must include a ‘stop use immediately’ instruction. In addition, non-portable, dangerous products must be collected from consumers. It is remarkable that the GPSR (where ‘G’ stands for ‘General’) contains such detailed and specific provisions. Since the GPSR is a so-called horizontal regulation, any additional (or more specific) obligations under the GPSR regarding recalls would be applicable to the car industry, as well as other industries not excluded from its scope. The sectoral car legislation does not exempt motor vehicles from the requirements of the GPSR. Regulation (EU) 2018/858 does not replace or derogate from the requirements of the GPSR. It sets out additional requirements for the safety and performance of motor vehicles and their components, but does not relieve manufacturers of their obligations under the GPSR. Therefore, any additional or more specific obligations under the GPSR would still apply to the car industry alongside the requirements of the sectoral legislation.
It should also be noted that the application of Chapter VIII of the GPSR is not excluded for sectoral legislation, while many other chapters are expressly excluded.
I am still in discussion with the EU Commission. If their intention was to exclude sectoral legislation from the scope of Chapter VIII, they can still do so through a simple amendment. However, I do not see why dangerous cars are less dangerous than dangerous bicycles. No recall is the same, and it would therefore be better to, instead of exclude it, change Chapter VIII and leave more room for proportionality. To be continued. Cars aside, if the text of the GPSR remains unchanged, dangerous (cargo) bicycles and LEVs must be collected from consumers. I wonder if ChatGPT would have spotted that snag.

Product recalls under the GPSR: beware of the snag!

By Rutger Oldenhuis LLM

The ink has yet to dry, but the recently approved text of the long-awaited General Product Safety Regulation (GPSR) will cause quite a stir. The GPSR will replace the now-aging General Product Safety Directive (GPSD) and is expected to come into force at the end of 2024.

Like any other, the bicycle industry should take note of the GPSR now, because the implications will be significant, and infringement may lead to penalties. There is much to say about the new Regulation, but here I will focus on the provisions relevant to product recalls.

Let me start with some interesting statistics that speak for themselves. The word ‘recall’ (in some form) appears 81 times in the GPSR versus 17 times in the GPSD. The word ‘corrective’ (as in ‘corrective measures’) appears 31 times in the GPSR versus 0 times in the GPSR. More importantly, there seems to be a snag that apparently was overlooked by most (if not all) trade associations and other stakeholders during the drafting phase. A snag that can make the burden of a recall even bigger than it already is.

Although certain parts and chapters of the GPSR do not apply to products for which specific harmonised EU regulations already exist, the provisions relevant to product recalls apply to all product categories, unless their applicability is expressly excluded (for example, medicinal products, food and feed). Where European legislation normally excels in vague texts and open norms that need to be further fleshed out by courts, remarkably, the GPSR contains quite detailed recall provisions and instructions, which you would normally expect in the form of a guideline. For example, the GPSR prescribes that the headline of a recall notice must be ‘Product safety recall’. Furthermore, words or expressions such as ‘voluntary’, ‘precautionary’, ‘discretionary’, ‘in rare/specific situations’ as well as indicating that no accidents have been reported, should be omitted. In addition, consumers must be instructed to stop using the product immediately. The latter, in particular, seems very rigid and can potentially have very far-reaching consequences, which – so it seems – were overlooked during the drafting phase of the GPSR, especially when we take a closer look at the legal requirements of recall remedies.

In the event of a recall, the GPSR stipulates that consumers should be given a choice of at least two of the following remedies: repair, replacement, or a refund. Consumers may only be offered one remedy if the other remedies are impossible or disproportionate. The question then, of course, is what is disproportionate; in that respect I also refer to my previous blog that I wrote for Bike Europe. In any case, consumers are always entitled to a refund if the economic operator has not arranged for repair or replacement within a reasonable time without significant inconvenience for the consumer. A possible snag is the provision that prescribes that if products by their nature are not portable, the economic operator must arrange for the collection of that product. If we follow the text of that clause literally, this would mean that, in the event of a recall of an unsafe bicycle, consumers must immediately stop using it and the economic operator must collect the bicycle from the consumer. The question is whether this is really intended. After all, it would also mean that, for example, an unsafe car would have to be collected from consumers. Given the high number of automotive recalls, that would undoubtedly lead to a logistical nightmare and a huge financial burden. The European Automobile Manufacturers’ Association (ACEA) seems to have completely overlooked this in their feedback on the draft text. The only thing they worried about was that, instead of using a picture of an unsafe product, it should also be allowed to use an illustration…

How Dirty Is Greenwashing?

By Rutger Oldenhuis LLM

Introduction

It’s a phenomenon often seen in advertising: exaggeration, also known as “puffery”. Typically, puffing is not regarded as misleading advertising, even though the claims cannot be objectively verified. “We serve the best sandwiches in town!” Everyone will understand that such an advertising claim is completely harmless. For a long time perhaps something similar could be said about environmental claims used by corporates to market their products or services. Terms like ‘green’, ‘eco-friendly’, ‘conscious’ or ‘sustainable’ are all over the place and almost lost their meaning.[1]

However, in a relatively short period, the tide seems to be turning. NGOs, consumer initiatives, newspapers, activist shareholders, national authorities and the EU Commission are paying more and more attention to companies that use unsubstantiated or vague sustainability claims (also known as ‘greenwashing’), with the European Green Deal as an important driver. Not without consequences. And with the recent Shell-case, corporates with large carbon footprints may even have more to worry about.

In this article I will briefly explain the current legal perspective of environmental claims used by corporates to market their products or services, in particular on a business-to-consumer level.[2] What is allowed, and what not?[3] I will also briefly touch upon the Shell-case, which may be the first of alternative legal actions to be expected against climate change.

Unfair commercial practice

In the EU, sustainability is covered by a patchwork of regulations and directives.[4] On a business-to-consumer level, the overarching legal basis (or ‘safety net’) of ‘greenwashing’ can be found in Directive 2005/29/EC of the European Parliament and of the Council concerning unfair business-to-consumer commercial practices in the internal market (“UCPD”). However, if you search the UCPD for key words like ‘environmental’, ‘sustainable’ or ‘greenwashing’, you won’t find any hits, despite the latest amendments made in November 2019. Indeed, it does not provide specific rules on environmental claims. Nevertheless, according to the EU Commission Notice on the interpretation and application of the UCPD (“the UCPD Guidance”), the UCPD provides a legal basis to ensure that traders do not present environmental claims in ways that are unfair to consumers. Interestingly, the UCPD Guidance uses the word ‘environmental’ 123 times and includes the following definition of ‘greenwashing’:

 “The expressions ‘environmental claims’ and ‘green claims’ refer to the practice of suggesting or otherwise creating the impression (in a commercial communication, marketing or advertising) that a good or a service has a positive or no impact on the environment or is less damaging to the environment than competing goods or services. This may be due to its composition, how it has been manufactured, how it can be disposed of and the reduction in energy or pollution expected from its use. When such claims are not true or cannot be verified, this practice is often called ‘greenwashing’.”

Examples of greenwashing

An environmental claim can be misleading if it contains false information and is therefore untruthful. The UCPD Guidance includes many practical examples, including the following:

 

  • Using the term ‘biodegradable’ for a product which is not actually biodegradable or for which no tests have been carried out.
  • Presenting electrical appliances such as irons, vacuum cleaners, coffee machines, as ‘environmentally friendly’ (‘eco’), although tests show that they frequently do not perform better than similar products or where no tests have been carried out.
  • Presenting tableware containing bamboo as a sustainable, recyclable and eco-friendly alternative to plastic materials, when such products are in reality a mix of plastic, bamboo (sometimes bamboo dust) and resin made of melamine and formaldehyde that is necessary to produce various shapes (dishes, bowls etc.) and degrees of stiffness.

Environmental claims are likely to be misleading if they consist of vague and general statements of environmental benefits without appropriate substantiation of the benefit and without indication of the relevant aspect of the product the claim refers to. For example:

 

  • Traders increasingly make claims about carbon neutrality by investing in projects that compensate for CO2 emissions. For example, a car rental company offers consumers the possibility to ‘drive CO2 neutral’ by choosing an option that compensates for emissions. This practice may be problematic if the underlying carbon credits are of low environmental integrity or are not accounted for appropriately, so that they do not represent real and additional emission reductions.
  • A court considered that the marketing of hair and skin care products, where the trader had stated that their products are organic with claims such as ‘eco’ and ‘organic’, were vague and without clear qualifications. The court also assessed that it is not clear enough with only the graphic symbol/logo/label of a third-party certification label as a qualification of what organic and/or eco means.

According to the EU Commission, examples of claims that are likely misleading are ‘environmentally friendly’, ‘eco-friendly’, ‘eco’, ‘green’, ‘nature’s friend’, ‘ecological’, ‘environmentally correct’, ‘climate friendly’, ‘gentle on the environment’, ‘pollutant free’, ‘biodegradable’, ‘zero emissions’, ‘carbon friendly’, ‘reduced CO2 emissions’ ‘carbon neutral’, ‘climate neutral’ and even the broader claims of ‘conscious’ and ‘responsible’.

Furthermore, traders should not distort claims about the composition of the product (including raw materials). For example:

 

  • Advertising a product as containing ‘sustainable cotton’ could be misleading if the origin of the cotton is neither traceable nor separated in the production chain from conventional cotton.

Many more examples are explained in the UPCD Guidance, which guidance can be used as a valuable source for companies who want to better understand the legal aspects of unfair commercial practices, including greenwashing.

Half of the green claims lack evidence

In January 2021, the European Commission and national consumer authorities released the results of a screening of websites (so called “sweep”), an exercise carried out each year to identify breaches of EU consumer law in online markets. That year, for the first time ever, the sweep focused on ‘greenwashing’. The outcome was that half of the green claims lacked evidence. In many cases sufficient information for consumers to judge the claim’s accuracy was missing. Claims included vague and general statements such as ‘conscious’, ‘eco-friendly’, ‘sustainable’, which were often unsubstantiated.

The sweep was not without consequences for Decathlon and H&M. They were publicly reprimanded by the Dutch surveillance authority for using vague and unsubstantiated environmental claims. Both companies donated respectively €400,000 and €500,000 to charities as penance, and promised they would adjust their environmental claims. The Dutch authority therefore refrained from further penalties.

Which environmental claims are allowed?

As a rule of thumb, consumers must be able to trust environmental claims put forward by traders. Consequently, in order not to be misleading, environmental claims must be ‘truthful, not contain false information and be presented in a clear specific, unambiguous and accurate manner’. The UPCD contains the following example:

 

  • Highly polluting industries should ensure that their environmental claims are accurate in a sense of being relative, e.g. ‘less harmful for the environment’ instead of ‘environmentally friendly’.

The UCPD clarifies that any claim (including environmental claims) should be based on evidence which can be verified by the relevant competent authorities. Traders must be able to substantiate environmental claims with appropriate evidence. Consequently, claims should be based on robust, independent, verifiable and generally recognised evidence which takes into account updated scientific findings and methods. The burden of proof regarding the accuracy of the claim rests on the trader. Enforcement authorities have the power ‘to require the trader to furnish evidence as to the accuracy of factual claims in relation to a commercial practice’. Independent third party testing should be made available for the competent bodies if the claim is challenged. If expert studies give rise to significant disagreement or doubt over environmental impacts, the trader should refrain from the claim altogether.

Could greenwashing lead to a product recall?

Environmental product risks can be a reason for having to recall products from the market. That may for example be the case if a product contains certain hazardous substances in too high volumes. Whether greenwashing could lead to a recall, depends on the circumstances of the case. Volkswagen recalled millions of cars after admitting they had used a ‘defeat device’ to cover-up the actual pollution levels (also known as ‘Dieselgate’). Another example of a corrective action may be the obligation to change product and packaging due to incorrect labelling. Next to that, consumers may be entitled to get a refund based on consumer law (e.g. based on non-conformity). The result is de facto the same as a recall.

The unprecedented Shell-case

A corporate’s social and environmental responsibility may stretch a lot further than its commercial practices vis-à-vis consumers. The Shell group (“Shell”) is one of the world’s largest producers and suppliers of fossil fuels. The CO2 emissions of Shell, its suppliers and customers exceed those of many countries. This contributes to global warming, which causes dangerous climate change and creates serious human rights risks, such as the right to life and the right to respect for private and family life. It is generally accepted that companies must respect human rights. This is an individual responsibility of companies, which is separate from states’ actions. On May 26, 2021, the Hague District Court in the Netherlands has ordered Shell to reduce the CO2 emissions of the Shell group by net 45% in 2030, compared to 2019 levels, through Shell’s corporate policy.[5] This order has been given in proceedings initiated by seven foundations and associations as well as over 17,000 individual claimants. According to the court, the claimants were right to believe that Shell takes insufficient action, acts unlawfully, and should do more to reduce CO2 emissions. Shell’s reduction obligation follows from the ‘unwritten standard of care’ laid down in the Dutch Civil Code, which means that acting in conflict with what is generally accepted according to unwritten law is unlawful. From this standard of care follows that when determining Shell’s corporate policy, Shell must observe the due care exercised in society.[6]

The following scientific evidence was used in the Shell-case:

The total worldwide capacity remaining to emit greenhouse gases is referred to as the ‘carbon budget’. At present, global CO2 emissions amount to 40 Gt CO2 per year. So every year that CO2 emissions remain at this level, 40 Gt is deducted from the carbon budget. If global CO2 emissions are higher, more than 40 Gt will be deducted from the carbon budget. A carbon budget of 580 Gt CO2 was available from 2017 – a best estimate – for a 50% chance of a global warming of 1.5ºC. In 2020, 120 Gt of CO2 has been used and 460 Gt of CO2 remains. If emissions remain the same, the carbon budget will run out in the foreseeable future.

Concluding

The inconvenient truth is that we need laws (written and unwritten) and Green Deals to stop greenwashing and push corporates to implement truly sustainable practices. The Shell-case shows that, regardless of using environmental claims (true or false), companies may be legally forced to take appropriate measures across their supply chain to protect the environment. This raises the question if more court cases like the Shell-case can be expected.

[1] Another issue is the jungle of green labels used for products. It is difficult for consumers, companies and other market actors to make sense of the many environmental labels and initiatives on the environmental performance of products and companies. According to the EU Commission, there are more than 200 environmental labels active in the EU, and more than 450 active worldwide. There are more than 80 widely used reporting initiatives and methods for carbon emissions only. However, this falls outside the scope of this article.

[2] The upcoming new or proposed legislation in the field of sustainability, which form part of the EU Green Deal, falls outside the scope of this article.

[3]  For writing this article, I thankfully made use of the UPCD Guidance as one of my main sources.

[4] Among others Regulation (EC) No 66/2010 of the European Parliament and of the Council on the EU Ecolabel, Regulation (EU) 2017/1369 of the European Parliament and of the Council setting a framework for energy labelling, Directive 1999/94/EC relating to the availability of consumer information on fuel economy and CO2 emissions in respect of the marketing of new passenger cars, Directive 2012/27/EU on energy efficiency, as amended by Directive (EU) 2018/2002, Directive 2010/31/EU on the energy performance of buildings, Regulation (EU) 2020/740 on the labelling of tyres with respect to fuel efficiency and other parameters, Directive (EU) 2019/944 of the European Parliament and of the Council on common rules for the internal market in electricity, Directive 2009/125/EC establishing a framework for the setting of ecodesign requirements for energy-related products, Regulation (EU) 2018/848 of the European Parliament and of the Council on organic production and labelling of organic products, Directive (EU) 2018/2001 of the European Parliament and of the Council on the promotion of the use of energy from renewable sources, Directive 2009/73/EC of the European Parliament and of the Council on common rules for the internal market in natural gas.

[5] The Decision is available in English here: ECLI:NL:RBDHA:2021:5339, Rechtbank Den Haag, C/09/571932 / HA ZA 19-379 (engelse versie) (rechtspraak.nl)

[6] Shell has lodged an appeal against the ruling, which is still pending.