(2/3) Changes to Market Surveillance Rules and Product Marketing in the European Union — Market Surveillance

The second part of the series of articles “CHANGES TO MARKET SURVEILLANCE RULES AND PRODUCT MARKETING IN THE EUROPEAN UNION”

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Regulation of the European Parliament and of the Council 2019/1020 on market surveillance and product compliance requires that each Member State designate at least one market surveillance authority and a single liaison office responsible for coordinating activities and reporting on national strategies.

The purpose of supervisory authorities’ activities is to be effective market surveillance in the field of product distribution by traditional and online means and implementation of recovery programs as well as disciplining business entities in the field of product care.

In the event that a product (used as intended) may pose a risk to the health and safety of users or if it does not meet the requirements of EU law, supervisory authorities shall take appropriate actions to eliminate this risk. Also, only very suspicion of the possibility of such a risk may be associated with an appropriate reaction of the supervisory authority.

Detailed permissions for supervisory authorities will be determined individually by each Member State, however, in accordance to the Regulation, all supervisory authorities should have a common set of powers in the area of proceedings and enforcement. According to the Regulation, the supervision authority will have the permission to:

• requesting from business entities documentation, technical specifications and other information regarding technical aspects of products and their compliance;
• requesting information about the supply chain, details of the distribution network, quantity of products on the market, other product models with the same technical characteristics;
• requesting information enabling the determination of website owner;
• unannounced inspections of products;
• visiting any buildings or means of transport used by the business entity;
• commencing proceedings on its own initiative to detect and remove non-compliance;
• requesting from business entities to take appropriate action to eliminate cases of violations;
• taking corrective actions if business entities does not take them themselves, such as: prohibiting or restricting the provision of a product on the market or ordering product recall;
• imposing sanctions which will be by Member States themselves;
• obtaining product samples, including under hidden identities;
• as a last resort, making decisions such as: removing content related to the products from the online interface, or requesting an appropriate warning, as well as restricting access to specific online content.

Additionally, the Regulation grants the supervisory authorities the possibility to use as evidence all information, findings and documents obtained. As it was shown, the powers of supervisory authorities are very extensive and assume access to sensitive information about the entrepreneur and the way he conducts business.

However, the EU legislator seems to notice the sensitivity of data obtained under control, and the authorities are obligated to ensure the confidentiality of the information obtained during the control. On the other hand, the legislator grants the authorities right to disclose any information which they consider important for the protection of end-users. With a view to protecting the interests of consumers, this solution is beneficial, however, it carries the risk of fraud, which can be very severe for entrepreneurs, even if we take into consideration 10-days deadline given to business entities for respond.

It is also important that if a product is found to be non-compliant in one Member State, the authorities of the other Member States shall presume that this product is not compliant with the requirements in other Member States.

It is also planned to create a Quick Information Exchange System under which supervisory authorities will report products posing a serious risk.

KW Kruk and Partners Law Firm LP (Poland)