EU wants businesses to provide better product sustainability information

Out-Law News | 11 Apr 2022 | 1:04 pm | 3 min. read

The European Commission wants to oblige manufacturers and retailers to inform consumers about the durability and reparability of goods before they are sold.

It also plans to take stricter action against greenwashing in advertising.

The European Commission has proposed a directive that would oblige manufacturers and retailers to better inform consumers about how durable and repairable their goods are. The proposed directive also includes new rules to make greenwashing more detectable and, if certain conditions are met, to classify it as unfair in all circumstances, without the need for a case by case assessment.

The Commission wants to change the consumer protection rules currently in force by revising the consumer rights directive.

Under the proposed new rules manufacturers and retailers would have to inform consumers about the guaranteed lifetime of goods. If the manufacturer gives a commercial guarantee for a lifetime of more than two years, the trader would have to pass this information on to consumers. For energy-using goods, the retailer would also have to inform consumers if the manufacturer does not provide such a commercial guarantee for the lifetime of its products.

Retailers would also be obliged to inform consumers whether and how a good can be repaired and whether, for example, spare parts and repair manuals are available. When purchasing smart devices and digital content and services, consumers would also have to be informed about software updates from the manufacturer.

According to the proposed new rules manufacturers and retailers would be able to decide for themselves if they want to make this information available on their website or on the packaging of the good. In any case, the information must be made available to customers in a "clear and comprehensible manner" before purchase.

"Consumers will in future be able to take collective redress action against companies that do not comply with these new rules," said Johanna Weißbach, an expert on mass litigation at Pinsent Masons. "The Commission's proposal makes explicit reference to the representative actions directive of 25 November 2020 which must be implemented by the end of December 2022. It provides consumers with a means to enforce their rights. The revised consumer rights directive would fall within the scope of this representative action. The purpose of this instrument is to provide an effective and efficient way to protect the collective interests of consumers, overcoming the obstacles that consumers face in individual actions."

According to the Commission's plans consumers will also be better protected from unreliable or false advertising claims on the subject of sustainability. The Commission proposes amending the directive on unfair commercial practices to make so-called greenwashing more detectable and, if certain conditions are met, prohibit it under all circumstances, as well as misleading claims about the lifespan of a good.

The Commission proposes extending the directive's list of product characteristics about which traders must not mislead consumers. In future it shall include environmental and social impacts as well as durability and repairability.

In addition, the list of prohibited business practices, the so-called black list in Annex I of the directive, is to be extended: For example, it is to be prohibited to offer a product with features that deliberately limit its service life or restrict its function after a certain time, called planned obsolescence, without providing information about this. According to the proposal, it will also be prohibited to sell goods that only work with accessories and spare parts from the manufacturer without informing consumers.

If an "excellent environmental performance" of the product or the trader cannot be demonstrated, "general and vague statements" about the environmental characteristics of a product would be prohibited. As examples of such statements, the Commission mentions the descriptions as "environmentally friendly", "eco" and "green". Also, goods should no longer be labelled with a sustainability seal if the seal was awarded without an independent testing procedure.

Ruth Maria Bousonville, advertising law expert at Pinsent Masons based in Frankfurt, said: "The German courts are already very strict on environmental advertising claims. However, the EU Commission's proposal goes far beyond this. For example, advertising with the eco friendliness of a product will only be allowed with an independent monitoring system."

The Commission said that the planned new rules aim to ensure legal certainty for traders. At the same time, however, it should also become easier for consumers to recognise how sustainable a product really is, so that they can take this into account in their purchase decision. 

The Commission's proposals will next be discussed in the Council and the European Parliament.

The planned changes in consumer law are part of a large-scale initiative by the EU Commission to make sustainable products the norm in the EU and to reduce the EU's dependence on raw materials by establishing a circular economy. Another building block of this initiative a proposal for a new eco-design regulation for sustainable products. In line with this, the Commission has also published a proposal for the revision of the construction products regulation and an EU strategy for sustainable and recyclable textiles.