Ministry of Economics plans uniform market surveillance law

Philipp Reusch

In the summer of 2019, EU market surveillance was consolidated and reformed by way of Regulation (EU) 2019/1020. The Regulation applies to all non-food products that are subject to European harmonisation rules. In particular, it provides for increased control of online trading and stipulates that fulfilment service providers may also be held liable by market surveillance authorities.

Also applicable to non-harmonised product categories

Although the Regulation is directly applicable to national implementation of market surveillance, transposition is necessary. Until now, the Product Safety Act provided for uniform market surveillance for harmonised and non-harmonised products in Germany. In order to maintain this uniform treatment and avoid legal uncertainty, the new Market Surveillance Act is also to apply equally to both product categories.

Far-reaching powers on the part of market surveillance authorities

The core of the Market Surveillance Act consists of provisions on the competencies and powers of the market surveillance authorities (Part II). The powers include, for example, the possibility to purchase products under a false identity for purposes of inspection and to analyse them by means of reverse engineering. In online trading, market surveillance authorities are given the power to instruct platforms to remove product-related content from websites or even to restrict access to websites if a risk to the life or health of product users cannot be eliminated in any other way. In addition, market surveillance authorities can take a wide range of measures, such as ordering the withdrawal or recall of a product or issuing product warnings. These measures may be directed against any economic operator producing, making available, putting into service or displaying the relevant product on the market.

Fines and penalties

The affected economic actors, exhibitors and online platforms are subject to comprehensive duties of toleration and co-operation. In the event of a breach of the defined duties, a fine of up to EUR 10,000 may be imposed, up to EUR 100,000 in the event of a breach of an enforceable order issued by the market surveillance authority. In these cases, persistent breaches or endangering the life or health of a person or posing a risk to property of significant value may be punishable by fine or imprisonment. Businesses should therefore ensure that they have the necessary structures in place to fulfil their duties to co-operate with market surveillance authorities.

[October 2020]