New Market Surveillance Law: Online Trade in the Sights

Organizations have to deal with a new legal situation, if they want to avoid serious fines or even official restrictions in e-commerce in the future. What was previously regulated in the Product Safety Act (ProdSG) is now redefined in the new Market Surveillance Act (MüG) and, in terms of manufacturing, in the new Act on Installations Requiring Surveillance (ÜAnlgG).

The motivation seems to be clear: The legislator is pushing for more European harmonization and was forced to break up the previous Product Safety Act (ProdSG) when implementing the EU Market Surveillance Regulation (EU-MÜV) into national law and to specify essential components in new laws. For organizations, this means that they should now immediately incorporate the current laws into their quality management. Otherwise, there is a risk of severe influence by the control authorities, up to and including sales restrictions.

The objective of the legislators was to integrate online trade more strongly into the control processes and to create clearer responsibilities as far as security issues are concerned. The bottom line is that this means a strengthening of stationary trade, which in the past was significantly easier for control authorities to monitor than competing companies that practiced exclusively online sales. The new law empowers the supervisory authorities to have product descriptions deleted, in extreme cases even to block access to sales websites, to order product recalls or even to withdraw websites completely if products pose a risk to consumers.

Here is an overview of the most important changes that should definitely be adapted in the internal quality management:

• Responsibility: In future, a person must be identifiable who is based in the European Union and performs various duties, in particular the notification duties towards authorities and control bodies. This responsible person is also responsible for maintaining meaningful technical documentation for products.
• Extended inspection powers: Authorities entrusted with market surveillance will henceforth be allowed to acquire products incognito in order to check them for compliance with safety regulations. In addition, they must be given access to embedded software upon request. Overall, companies must show a willingness to cooperate with requests.
• Reverse engineering: The control authorities are given extended powers, for example, to prove the hazard potential of a product by means of reverse engineering and subsequently to impose a sales ban, for example.
• Cross-border effect: If a sales ban is imposed in one EU country due to a security vulnerability, other member states can follow without conducting own investigations and also place the product on the red list in their own country.
• Assumption of duties: If a producer appoints authorised representatives, they must disclose the basis of the authorisation and automatically accept the duties defined in the law.
• Repeat offenders targeted: In future, controls will be carried out according to a kind of risk scale. This means that companies that have already attracted attention due to dishonest product sales must expect to be regularly in the focus of the control authorities in the future.

Conclusion: It is advisable, especially for online trading companies, to deal with the new Market Surveillance Act in detail and to adopt the new provisions in quality management. Even if the control authorities are still in a transitional phase, it is to be expected that the extended powers will be applied quickly.