Right to repair
The first proposal on common rules promoting the repair of goods (the Right to Repair Directive) focuses on two key stakeholders – consumers and industry. It aims to promote the repairability and serviceability of products, therefore extending product lifespan and reducing waste, and improve consumer protection.
The proposal distinguishes between defective products falling within and beyond the legal guarantee (i.e. the minimum two-year statutory warranty period) under the Goods Directive (EU) 2019/771.
- Within the legal guarantee, sellers will have to always repair a defective product in circumstances where the costs of replacement are equal to or greater than the cost of repair. As a result, the consumer may only choose replacement as a remedy when it is cheaper than repair.
- Beyond the legal guarantee, consumers will have access to a new set of rights and instruments, including:
- A right for consumers to request that the “producer” (i.e. manufacturer) repair a product to the extent that reparability requirements for that product arise under EU law (as listed in Annex II to the proposed Directive). Producers will have a corresponding obligation to repair such defects (unless it is impossible to do so) outside the liability of the seller for free or against a price;
- A right for consumers to receive information from a producer, in a clear and comprehensible manner, if the producer has an obligation to repair products and on the repair services;
- An online “matchmaking” platform which will connect consumers with repairers and sellers of refurbished goods; and
- A European Repair Information Form which will allow consumers to assess and easily compare repair services. Repairers will need to provide standardised key information to consumers on their repair services via this form.
The proposal also suggests that the European Commission will, in order to boost consumer trust in repair services across the EU, enable the development of a voluntary European quality standard for repair services e.g. by issuing a standardisation request to the European standardisation organisations.
The second proposal on substantiation and communication of explicit environmental claims (the Green Claims Directive) seeks to tackle misleading environmental claims and labelling, to ensure consumers receive reliable, comparable and verifiable information on products and are able to make more sustainable decisions.
The measures introduced by the proposal include:
- A requirement on traders to carry out an assessment to substantiate explicit environmental claims (i.e. claims in a “textual form or contained in an environmental label”). This assessment must be based on strict criteria, including scientific evidence, and must take into account the life cycle for the product;
- Communication requirements for traders in respect of explicit environmental claims (including a requirement to accompany such claims with information on substantiation in a physical form or in the form of a weblink, QR code or equivalent);
- A requirement on traders making comparative environmental claims (i.e. comparisons against other traders and other products) to ensure that such comparisons are based on equivalent information and data;
- The introduction of criteria on the use of environmental labelling schemes, and increased governance for such schemes (including requirements for transparency and accessibility of information on ownership and the decision-making bodies of the scheme); and
- Procedures for the verification of explicit environmental claims and environmental labels by an independent third party “verifier”, who will evaluate compliance and issue a certificate of conformity once such verification is complete.
Potential penalties for non-compliance include fines, confiscation of revenues, and temporary exclusion for a maximum period of 12 months from public procurement processes and from access to public funding. Member states will be able to impose penalties up to 4% of the trader’s total annual turnover in the member state concerned.
Will the UK follow suit?
In the UK, right to repair obligations were introduced for certain products (such as household washing machines, washer driers, dishwashers, refrigerators and electronic displays) in 2021 by the Ecodesign for Energy-Related Products and Energy Information Regulations. Under this legislation, spare parts for such products must be made available for minimum periods ranging from 7-10 years after production of the appliance has been discontinued, to enable consumers to repair their products. While these requirements align with EU legislation on ecodesign, there is no current suggestion that the UK government will look to adopt broader right to repair measures in line with the EU proposal.
There is also no current indication that the EU and UK positions will converge when it comes to regulating green claims. Nevertheless there have been efforts by the UK Competition and Markets Authority (CMA) to tackle greenwashing via the Green Claims Code, which aims to help businesses comply with existing obligations under UK consumer protection law. One of the key principles of the Green Claims Code is that environmental claims should be substantiated (although these principles are not legally binding). The CMA already plays an active role in investigating green claims and can take enforcement action against companies that do not comply with UK consumer protection law, and it is possible that the CMA’s enforcement could be strengthened under current UK Government proposals. In the future, the CMA may be able to issue fines up to 10% of a business’s global turnover for non-compliance with UK consumer protection requirements (which could extend to greenwashing).
What’s the Italian market perspective?
Like many other countries, Italy is looking to make a green recovery in the wake of COVID-19 and the ongoing war in Ukraine, thus increasing risks linked to greenwashing. As a proof of this, 2022 saw the first Italian lawsuit for greenwashing resulting in an order by the Court of Gorizia to stop the marketing of certain textile products deceptively presented as 100% recyclable and capable of reducing CO2 emissions by 80%. In conclusion, thanks to the National Recovery and Resilience Plan, highly focused on sustainable growth as a part of the Next Generation EU package, the Italian market is now beginning to show the first signs of interest in the topic of green claims and it will likely be subject to a gradual increase in the next years or even months.
If the right to reform proposals are enacted in their current form, businesses should expect to see a shift in market practices, including:
- A disruption to existing supply chains as suppliers, manufacturers and retailers try to provide consumers with repairs within a reasonable timescale;
- New business models in response to a growth in the market for refurbished products; and
- Adoption of internal practices to manage repair and replacement requests submitted by consumers.
Likewise, the proposals on green claims will require additional consideration from businesses to ensure their environmental claims comply with the proposed standards. For now, companies should review existing green claims and environmental labels on the market.
Both initiatives are also likely to generate increased consumer complaints, litigation and enforcement actions surrounding greenwashing, and businesses within the scope of the proposals are advised to stay current on EU updates.
Following the ordinary legislative procedure, the European Parliament and Council will need to scrutinise, debate and approve the Commission’s proposals.
The Hogan Lovells Global Products Law team is actively monitoring developments in this area and encourages businesses to get in touch with any questions.
Authored by Valerie Kenyon, Christian Di Mauro, Eshana Subherwal, and Guido Di Stefano