What´s changing in 2024: product-related civil and competition law

What´s changing in 2024: product-related civil and competition law

Developments in product-related civil law and product-related competition law will continue to be of interest in 2024. In particular, some legislative projects are about to be finalised, meaning that the industry will probably have more clarity about the future legal situation in terms of content and timeline in the course of 2024.

Against this background, we provide an update on the Green Claims Directive (A.), the planned amendments to the UCP Directive and the Consumer Rights Directive (B.) and the “Right to repair” (C.). We also take a look at the planned changes to video conferencing technology in civil proceedings (D.).

A. Green Claims

At European level, environment-related advertising claims are to be newly regulated in order to significantly reduce advertising that contains greenwashing in particular. The Commission has taken a rather radical approach in its draft directive (available here). Green claims without a detailed assessment of the content to substantiate the respective statement are to be banned. Furthermore, new eco-labels are to be banned at national level. This will make advertising with environmental claims much more difficult in future and also more expensive for companies.

As already briefly mentioned, the use of a (voluntary) environmental claim will in future be subject to a detailed prior assessment. This assessment must be based on scientific evidence and must also prove that the benefits claimed for the product or company are significant.

In addition, this substantiation of a green claim must be verified by an independent conformity assessment body. If the result is positive, this body issues a corresponding certificate of conformity. The use of an explicit environmental claim is only permitted with such a formal certificate. The underlying justification approaches, in particular studies and calculations, must be made available, as must the certificate of conformity with the green claim, and can therefore be accessed by consumers and other interested parties.

The competent national authorities must control compliance with these new regulations. It is specifically stipulated that complaints can be lodged with the competent authorities if there are concerns that the legal requirements are not being complied with. The authorities are then obliged to inform the complainant of their decision and give reasons for it. The complainant then has the right to take legal action. The following sanctions are imposed for violations of the new regulations, i.e. the use of unauthorised green claims:

  • Fines intended to deprive the trader of the economic benefit derived from the violation. Please note: In the case of infringements with an EU-wide-dimension, the maximum amount of such a fine must be at least 4% of the annual turnover in the member states concerned.
  • The confiscation of revenue generated by the operator with the products concerned
  • Exclusion for up to one year from the award of public contracts and public funding, including tenders and grants

As an indirect sanction, it should be added that a further planned amendment to the Directive (EU) 2020/1828 will also make infringements in the use of green claims eligible for representative proceedings. This will also expose claim-users to the risk of class actions being brought against them.

Now that amendments have already been submitted by the European Parliament, the corresponding plenary session is scheduled for March 2024. Based on the further European legislative procedure and the subsequent transposition into national law and the application of this national law another six months later, implementation in the course of 2027 currently appears realistic.

B. Proposal for a Directive amending the UCP Directive and the Consumer Rights Directive

To complement the green claims directive, the Commission published a proposal for a directive of the European Parliament and of the Council on amending Directives 2005/29/EC and 2011/83/EU as regards empowering consumers for the green transition through better protection against unfair practices and better information (COM(2022)0143 — C9-0128/2022 — 2022/0092(COD)) in 2022.

After amendments had already been introduced by the European Parliament in May 2023, the proposal recently underwent a noticeable and highly practically relevant intensification in the trilogue. On 25 October 2023, the Committee of Permanent Representatives of the Member States declared its agreement to a compromise containing various amendments. Of particular relevance is a further planned entry in the list of commercial practices that are in all circumstances considered unfair (Annex I of the UCP Directive; “blacklist”). According to the new No. 4ab to be implemented, the following will be in all circumstances considered unfair:

“Claiming, based on greenhouse gas emissions offsetting, that a product has a neutral, reduced or positive impact on the environment in terms of greenhouse gas emissions.”

As can be derived from recital 11a of the compromise proposal, if the directive is adopted in this version, statements such as “climate neutral”, “climate-compensated” and “CO2 neutral certified” will always be considered unfair and therefore forbidden under competition law if this effect is based on offsetting emissions. However, as can also be seen from recital 11a of the compromise proposal, advertising with investments in environmental initiatives should not be covered by this ban, provided that such advertising is not misleading.

It is not entirely unlikely that the directive will be adopted before the end of 2024. As things stand, the member states will have 24 months from publication to transpose the regulations into national law, which must come into force 30 months after publication of the directive. If the directive is adopted in 2024, the new provisions, in particular the new version of the German Act against Unfair Competition (UWG), could possibly come into force as early as 2026.

Read here in detail about the Commission’s draft directive from 2022.

C. Right to Repair

The “right to repair” will also make further progress in 2024. In November 2023, the European Parliament adopted amendments to the Proposal for a Directive of the European Parliament and of the Council on common rules promoting the repair of goods and amending Regulation (EU) 2017/2394, Directives (EU) 2019/771 and (EU) 2020/1828. The directive is expected to be adopted in mid-2024. As things stand at present, the member states are to be given 18 months to implement the directive, meaning that it is not expected to be transposed into national law until the first half of 2026 at the earliest.

Read here about the Commission’s draft and here about the Parliament’s amendments from November 2023.

D. Video conference technology in civil proceedings

Changes are also pending with regard to the judicial enforcement of (product) legal claims. Court hearings in Germany are to be (further) virtualised; a corresponding draft bill by the Federal Ministry of Justice in November 2022 was followed on 24 May 2023 by the Federal Government’s draft law to promote the use of video conferencing technology in the civil courts.

At the centre of the planned new regulations is the revision of Section 128a of the code of civil procedure (ZPO). Until now, the decision on whether to allow a party to participate virtually in the oral hearing is at the discretion of the court and parties are not obliged to participate virtually in the oral hearing. This is set to change under the current draft bill (see Sec. 128 of the proposed draft code of civil procedure (ZPO-E)). Accordingly, the presiding judge can allow virtual participation in the oral hearing for parties to the proceedings upon request or order it ex officio. If virtual participation is requested, it should also be permitted; reasons must be given if such a request is rejected.

Another envisaged amendment is the provisional audiovisual recording of oral hearings. In this respect, especially in civil proceedings on product errors, there could be a risk for companies involved in the proceedings that the recordings are stored and, for example by way of administrative assistance, are also available to authorities, which would thus have much easier access to the content of oral hearings. However, the all-clear can be given here: According to Sec. 160a ZPO-E, recordings are only to be produced for the purposes of preparing the minutes and, cf. Sec. 160a para. 4 ZPO-E, the recordings would have to be deleted after the minutes have been produced or after the proceedings have been concluded. In addition, only the parties are to be granted access (see Sec. 160a para. 6 ZPO-E).

Whether and to what extent the ZPO and the other affected regulations will actually be amended as planned is currently uncertain. The government’s draft was adopted by the German Bundestag on 17 November 2023 with some amendments. The German Bundesrat, however, expressed strong reservations about the restriction of the court’s discretionary powers with regard to holding a virtual hearing and referred the law to the Mediation Committee by resolution of 15 December 2023. It remains to be seen which provisions will ultimately be enshrined in law and whether or to what extent there will be an impact on the judicial enforcement of product law claims.

Do you have any questions about this news or would you like to discuss it with the author? Please contact: Dr. Florian Niermeier and Dr. Dominik Strobl

16. January 2024 Dr. Florian Niermeier