Proposal for a “Repair Right Directive” of the EU Commission
Climate protection and sustainability are major issues of our time. The EU Commission has committed itself to promoting these issues as part of the Green Deal and has already initiated numerous legal acts to this end. See, for example, the current drafts and considerations on ecodesign, which go as far as banning the installation of certain types of heating. However, the Commission has also declared war on the so-called “throwaway society”. Consumers shall be motivated to have appliances repaired more often instead of replaced, and this is to be done by considerably extending their rights to repair, which already exist under EU law or at national level. To that end, in March 2023, the Commission presented a Proposal for a Directive on common rules promoting the repair of goods and amending Regulation (EU) 2017/2394, Directives (EU) 2019/771 and (EU) 2020/1828 (“Repair Right Directive“) (COM (2023) 155 final), which, according to the relevant press release, sees repair as a “crucial factor” in the fight against “the model of the throwaway society”. It aims to make “repair a simple and attractive option for consumers.”
Internationally, this is not an entirely new approach. Initiatives to strengthen repair rights have already been pushed forward in several US states, for example, and corresponding legal acts have been passed. For example, at the end of 2022, New York State’s “Digital Fair Repair Act” aimed in particular at ensuring that manufacturers provide documentation, parts and tools on “fair and reasonable terms” to independent repair service providers and owners of electronic equipment manufactured or sold by or on behalf of the manufacturer.
2. Overview: Serious Changes planned at the Expense of Manufacturers
The scope of the EU Commission’s proposed directive stands out in an international comparison. If the draft were implemented as currently proposed, this would mean serious changes to the current legal situation and considerable obligations for manufacturers. The proposed directive applies in particular to household washing machines, washer dryers and dishwashers, but also to televisions and electronic displays, welding equipment, vacuum cleaners, servers and data storage products, as well as mobile phones, cordless phones and tablets.
With regard to these devices, consumers’ existing repair rights are to be extended quite significantly beyond the statutory warranty rights, with amendments to the still young Sale of Goods Directive (Directive (EU) 2019/771) also envisaged in the area of statutory warranty rights.
3. Changes in the Area of statutory Warranty Rights
In the area of statutory warranty rights, the Sale of Goods Directive is to be amended in accordance with Art. 12 of the Repair Right Directive. Now, the seller shall be obliged to rectify the defect (repair) “where the costs for replacement are equal to or greater than the costs for repair “. According to the wording, the repair is to have mandatory priority over a replacement delivery in this case, which would curtail the free consumer choice between replacement delivery and repair previously provided for. This is in fact the clear regulatory intention, because on p. 15 of the proposal and at the end of recital 28 of the proposal it is stated that the consumer can only choose replacement as a remedy for defects if the replacement is cheaper than repair.
Whether this is politically feasible is questionable and remains to be seen. Apart from that, there are also clear concerns about the current version in terms of regulation. In particular, it remains unclear at what point in time, from whose perspective (seller/consumer/objective) and according to which standards (specifically obtained offers, which will most likely vary in terms of cost, or average prices, which can hardly be determined in practice) the costs to be compared are to be determined. There is a considerable need for clarification here.
4. New Right to Repair outside the Area of statutory Warranty Rights
The actual core of the proposal (Art. 5 (1)) goes significantly beyond the modification of statutory warranty rights as described above. According to it, the manufacturer will be obliged to repair the goods “at the request” of a consumer.
According to the proposed directive, a “producer” is any natural or legal person who manufactures a product or has a product designed or manufactured and markets it under its own name or trademark. If the manufacturer has its registered office outside the EU, its “authorized representative” may fulfill the repair obligation. If there is no such authorized representative within the EU, the importer of the product in question fulfills the manufacturer’s obligation, and if there is no such representative either, the distributor is subject to the corresponding obligation. In this respect, the German version of the proposed directive is not accurate in Art. 5 (2) sentence 3, as a comparison with the English version of the proposal and the definitions of the Commission’s proposal for an Ecodesign Regulation referred to in the Repair Right Directive shows. The term “Verteiler” (“dispatcher”) referenced in Art. 5 (2) sentence 3 is obviously intended to mean the “distributor”, which has the consequence that fulfillment service providers are not held responsible.
The obligation to repair is to apply regardless of whether a contract exists between the obligated party and the consumer. The principle of the relativity of obligations (rights and obligations are only established between the parties involved), which is characteristic of German private law, is thus set aside.
In terms of legal craftsmanship, the provision could be optimized (cf. also above with regard to the use of the term “Verteiler” in the German version).
For example, it does not stipulate that the respective product must be defective at all and under which circumstances a defect is to be assumed; in this respect, it would make sense to cover only substantial functional impairments and thus exclude mere blemishes or loss of comfort.
Furthermore, the current version of the provision does not provide for how long the demand for repair can be asserted. In this regard, reference is made in the explanatory memorandum on p. 13 (footnote 9) of the proposal for Art. 4 to various EU regulations that contain specific requirements regarding the eco-design of certain goods and, among them, requirements for reparability, e.g. Commission Regulation (EU) 2019/2023. This stipulates that “professional repairers” must be provided with spare parts specified in a list for a period of at least ten years after the last unit of the model has been placed on the market. From this it is derived in the explanatory memorandum of the Repair Right Directive proposal that the obligation to repair applies for “the time period of ten years”. This requires clarification in several respects. First of all, according to the wording of the relevant regulation in Regulation (EU) 2019/2023, it is not the duration of the period within which repairs must be carried out that is regulated, but the duration of the provision of spare parts. Moreover, it does not simply specify a period of ten years, but, as stated above, a period of ten years after placing the last unit of the model on the market.
As a result, Art. 5 (1) should be revised and, in particular, the standard for determining the defectiveness and the period within which a claim can be made with regard to the respective goods should be defined clearly and unambiguously in the directive itself. However, granting a right to repair for a period of ten years from the date on which the last unit of the model was placed on the market is disproportionate from the manufacturer’s point of view. Instead, a limitation to the normal service life of the respective product could be considered, which should be specified in the directive itself (e.g., five years from delivery), if only for reasons of regulatory clarity. On this occasion, it should be clarified that (as we assume is intended) the demand for repair must be asserted against the manufacturer (it would also be conceivable that it would be sufficient to assert it against the seller, who in turn would have to forward this to the manufacturer). This is also not unambiguously regulated. The wording of the provision in the German version even allows the interpretation that any consumer can effectively demand the repair for another (“upon request of a consumer”; in the English, Dutch and French versions also not beyond doubt, although better phrased so that the affected consumer appears to be meant). There is thus a need for improvement in many respects. If the proposal were to remain unchanged, it would be feared that, as a result of the various ambiguities, there would be no uniform implementation by the Member States.
5. Considerable additional financial and organizational Expenses
The intended encroachment on the legal position of the manufacturer is mitigated to a limited extent under the proposal. For example, the repair does not have to be free of charge, but can also be carried out “against a price or another kind of consideration”. In addition, the obligation does not apply if a repair is factually or legally impossible (here, it should be clarified in accordance with recital 19 that both factual and legal impossibility are covered). The manufacturer can also subcontract repairs, i.e. does not have to carry them out himself.
As a result, however, the encroachment remains considerable. For manufacturers, the regulation would ultimately mean that they would remain responsible for the functionality of the devices they manufacture, irrespective of the statutory warranty and thus in particular after the warranty period has expired. Even if they do not carry out repairs themselves but subcontract them, it is obvious that maintaining the necessary structures will generate considerable organizational and financial effort and costs. This is all the more so because, according to the proposal, they must ensure that independent repairers have access to spare parts and repair-related information and tools (Art. 5 (3)). Accordingly, manufacturers would have to enable them to offer comparable services and provide them with information on this. The currently envisaged wording does suggest that repairers are not required to provide any information here beyond that previously required to be provided under the respective individual regulations (such as Regulation (EU) 2019/2023). However, the circle of repairers would now be broadened, as every independent repairer would have to be provided with the relevant information (in contrast, Regulation (EU) 2019/2023, for example, allows repairers to be required to provide certain proof of competence, among other things). As a result, manufacturers would be forced to pass on sensitive information regarding the goods to potentially non-reputable repairers.
6. Further accompanying Provisions
Where manufacturers are obliged to repair goods, they must inform consumers of this obligation and provide information on repair services (Art. 6). To this end, Member States shall ensure that at least one online platform exists for their respective territories that enables consumers to find repairers (e.g., through a search function related to goods, the location of repair services, repair conditions, etc.).
As a flanking measure, repair companies will be required to provide standardized information on the repair conditions and the price of the repair in a “European Repair Information Form” (Art. 4) to enable consumers to compare repair services. Furthermore, a European quality standard for repair services is to be developed to increase consumer confidence in repair services (recital 27).
The legal regulation of the b2c relationship is progressing and does not stop at the inter partes principle. For manufacturers, this means that they must reckon with considerable additional expense in financial and organizational terms. At present, however, it can be assumed that the content of the proposed directive will be adjusted in the further course of the legislative process, in particular due to technical deficiencies. The proposal for a Repair Right Directive is therefore itself in need of repair.