Spanner in the Works? EU Right to Repair Directive Imposes Obligations to Drive Circular Economy

This blog was originally posted by Cooley on 11th July, 2024. Further regulatory developments may have occurred after publication. To keep up-to-date with the latest compliance news, sign up to our newsletter.

AUTHORED BY JAMIE HUMPHREYS, JACK EASTWOOD & PIA PYRTEK

On 30 July 2024, the Right to Repair (R2R) Directive will become law following its publication in the Official Journal of the European Union on 10 July 2024. The R2R Directive represents a significant overhaul of existing right to repair rules. It establishes a new right to repair for consumers by imposing:

1. An obligation on manufacturers to repair broken or defective goods.
2. An obligation on sellers to incentivise consumers to choose repair ahead of the other remedies available for a breach of the legal guarantees offered under the Sale of Goods Directive.

The trend towards repair and a more circular economy is not isolated to the EU, with several states in the US contemplating or already having adopted right to repair laws.

Below, we have provided an overview of the products in scope, what the R2R Directive means for manufacturers and sellers going forward, and how long companies have to prepare.

New Right to Repair Obligation for Manufacturers

The R2R Directive will require manufacturers (including those marketing products under their name or trademark) or their authorised representative in the EU to carry out repairs outside of the legal guarantee for products covered by repairability obligations under EU law unless repair is impossible.

Scope

This obligation applies to consumer goods subject to repairability obligations detailed in Annex II to the R2R Directive. Currently, this means that only certain consumer goods are in scope, including electronic displays, mobile phones and slate tablets, as well as certain household goods (e.g., white goods such as washing machines and fridges). However, companies should anticipate the scope of this obligation to broaden significantly as new repair requirements are introduced for a broader range of products (e.g., textiles and footwear). Under the R2R Directive, the European Commission is required to update Annex II as new products become subject to repairability requirements. A large number of new repair obligations, such as those improving ease of disassembly and access to spare parts or repair-related information, are expected as part of the rollout of the EU’s Ecodesign for Sustainable Products Regulation (ESPR) framework, which we discussed in a December 2023 blog post.

Key Features

Repair Requirements

The repair must be free of charge or for a reasonable price and must be carried out in a reasonable time. While a repair can be refused where it is impossible, it cannot be refused for the sole reason that a previous repair was performed by a third party or for purely economic reasons. For these purposes, ‘repair’ means ‘one or more actions carried out to return a defective product or waste to a condition where it fulfils its intended purpose’. Further, the manufacturer must make information on repair services and costs available free of charge in an easily accessible, clear and comprehensible manner.

Spare Parts Availability

Where manufacturers make spare parts and tools available for in-scope products, they also are required to offer these at a reasonable price that does not deter repair. The R2R Directive includes a number of obligations surrounding spare parts, such as requiring information on certain spare parts to appear online and preventing certain practices that can hinder repair including contractual clauses or certain software-related and hardware-related barriers. In particular, manufacturers will not be permitted to impede the use of original or second-hand spare parts, compatible spare parts, and spare parts issued from 3D printing, by independent repairers when those spare parts are in conformity with product safety and intellectual property requirements under EU or national law.

Further Measures to Incentivise Repair

Under the R2R Directive, additional measures to incentivise repair include:

1. The establishment of an online platform to help consumers find repairers and sellers of refurbished goods.
2. A standardised European Repair Information Form which repairers can use voluntarily to provide key information to consumers about the repair and its cost.

Member states also will be required to implement at least one policy measure to promote repair over replacement. Examples include repair vouchers and funds, information campaigns or a reduction of the value-added tax rate on repair services.

Amendments to the Existing Legal Guarantee

Under the existing Sale of Goods Directive, sellers are liable to the consumer for any lack of conformity which exists at the time the goods were delivered and which becomes apparent within two years of delivery (or longer, depending on the national law). Currently, consumers can choose between a refund, free repair or a replacement (with certain exceptions). The R2R Directive amends the Sale of Goods Directive to better incentivise repair.

Scope

This obligation is not limited to goods subject to ecodesign rules and applies to all goods (including goods with digital elements) sold to consumers under the Sale of Goods Directive.

Key Features

Hierarchy of Remedies Remains Unchanged

Consumers still will be able to choose between a repair and a replacement for nonconforming goods contrary to the initial legislative proposal which sought to make repair the default option. Sellers will, however, be required to inform consumers before the remedy is provided about their right to choose between repair and replacement as well as about the possible extension of the consumer’s legal guarantee if repair is requested. Sellers still will be able to refuse repair if it would impose disproportionate costs on them. Companies should nevertheless expect greater scrutiny of the use of this exemption by consumers and the consumer protection authorities.

Replacement and Refurbished Goods

Sellers also may voluntarily make a replacement product available to the consumer during the period of repair. Further, if the consumer requests a refurbished product as a replacement (instead of a repair), the seller can discharge its obligations by providing the refurbished product. These provisions also apply to manufacturers which offer consumers a commercial guarantee.

Extended Legal Guarantee

The seller’s liability under the Sale of Goods Directive will be extended by a further 12 months where a consumer chooses repair in order to have the good(s) brought into conformity. Member states have discretion to further extend this period under national laws if they so wish.

Insufficient Repairability May Equate to Nonconformity

As amended by the R2R Directive, the Sales of Goods Directive now includes an assumed level of ‘repairability’ as an additional characteristic alongside durability, functionality and compatibility of goods of the same type. A nonconformity may be established if, given the nature of the goods and taking into account any public statement made by or on behalf of the seller or related actor (e.g., on a label or in an advertisement), a consumer may reasonably expect a greater level of repairability than is possible.

Commercial Guarantees

Given the significant changes introduced by the R2R Directive, including the new repair obligations and rules around loan and refurbished products, manufacturers should review their existing commercial guarantees to ensure they are compliant with the new rules.

Enforcement

The R2R Directive is brought in scope of the Representative Action Directive, meaning consumers will be able to enforce the R2R Directive by means of the EU’s new class actions mechanism. It also amends the Consumer Protection Cooperation Regulation, which permits consumer protection authorities to cooperate and coordinate enforcement actions against non-compliant businesses. Any penalties a business might face will be set by member states under their own implementing legislation, on the proviso they must be ‘effective, proportionate and dissuasive’.

Timeline

As the R2R Directive has been published in the Official Journal of the EU, it will enter into force 20 days later. Member states then have two years, until 30 July 2026, to transpose the requirements into national law.

Broader Context

The R2R Directive forms part of the EU’s Circular Economy Action Plan and targets obstacles that discourage repair, including ‘inconvenience, lack of transparency or difficult access to repair services’. It complements several other initiatives, all of which have the overarching aim of incentivizing consumers to use products for longer and prioritise sustainable consumption throughout the entire product life cycle, including:

• The new Batteries Regulation, which we posted about in July 2023.
• The Ecodesign for Sustainable Products Regulation.
• The Directive on Empowering Consumers for the Green Transition, which we posted about in January 2024.

This commentary is brought to you by Cooley, one of the world’s leading law firms for innovative companies. Cooley has built a global team of specialist products lawyers, led by some of the leading and best-recognized practitioners, who are able to provide strategic advice and practical solutions to global product safety and compliance issues. With access to an extensive network of leading local products lawyers in 140+ countries across six continents, Cooley is uniquely placed to advise its clients on product issues, wherever they arise.

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