10 Aug 2018
Judgment in EU Energy Labelling Case Could Have Ramifications for Hong Kong Suppliers of Home Appliance Products
On 25 July 2018, the Court of Justice of the European Union (the CJEU) handed down a ruling on energy labelling, in a case that had been initiated by well-known electronics manufacturer Dyson against BSH Home Appliances, a company which owns (among others) rival company Borsch. While Dyson asked for clarifying information to appear on the energy label, so that consumers are not confused or misled by the ratings provided, the CJEU refuted this argument. Hong Kong sellers of electrical household appliances should note that the judgment, although it concerns vacuum cleaners, may have ramifications also for other appliances that are subject to the EU’s stringent energy labelling rules.
The ruling from the EU’s highest court, the CJEU, has proved, in large part, disappointing for Dyson, but will be emboldening for Brexit supporters who are keen to show that EU rules are overly complex, rigid and burdensome.
Hong Kong companies of electrical products may recall that since 1 September 2014, all vacuum cleaners sold in the EU have been subject to energy labelling requirements, the detailed rules of which have been fixed by the European Commission in a regulation supplementing the EU Directive on energy labelling, namely, Regulation 665/2013. The energy labelling is aimed, among other matters, at informing consumers of energy efficiency levels and cleaning performances of vacuum cleaners.
Dyson sells vacuum cleaners that operate without a dust bag, while BSH Home Appliances, the owner of Dyson’s rivals Bosch and Siemens, sells conventional vacuum cleaners which operate with a dust bag.
Dyson challenged the energy labelling of the vacuum cleaners marketed by BSH. The latter’s labelling reflects the results of energy efficiency tests carried out with an empty dust bag, in accordance with the EU Regulation. Dyson argued that the energy labelling of those vacuum cleaners misleads consumers and should therefore be clarified in the labelling itself. This is because, under normal conditions of use, the pores of the bag become clogged when it fills with dust so that the motor must use significantly more energy to maintain the same suction. This, in turn, means that most vacuum cleaners are functionally less efficient than is claimed on their label.
Dyson argued that BSH models can draw more than twice their stated wattage when used in a normal (e.g. home) environment, in effect dropping them down from an A rating to D or E. Moreover, the vacuum cleaners marketed by Dyson, due to their operating without a dust bag, are not affected by that loss of energy efficiency under normal conditions of use, and are therefore disadvantaged by the EU’s testing rules. Dyson therefore called for more information regarding this to be required on the energy labels.
The CJEU refuted the argument, holding instead that the EU Regulation “precisely lays out the design and content of the label”.
Dyson had initially brought an action against BSH before the Commercial Court in Antwerp, Belgium. That court then asked the Court of Justice whether, in light of the Directive on unfair commercial practices, BSH is misleading consumers by failing to mention that the tests were carried out with an empty dust bag. While BSH is said to have strictly complied with the provisions of the EU Regulation, the Antwerp court nonetheless asked whether the addition of such a reference in the labelling (that the dust bag was empty when the appliance was tested) would be compatible with the provisions of the Regulation which establish the format and content of the label.
Dyson also claimed that it was unlawful for BSH to provide extra energy efficiency labelling supplementing the energy label.
The Antwerp court had put three questions to the CJEU:
- Can information on how efficiency is tested be added to the energy label?
- Does failing to provide such information violate the EU’s 2005 Directive on unfair business practices?
- Does EU law permit symbols and statements on energy efficiency to be displayed next to the official label?
The Court of Justice of the EU held that the answer to all three questions must be no. It ruled that no extra information may be added to the energy label, other than the EU ecolabel, which also prohibits a reference to testing conditions.
In 2013, Dyson had filed a challenge against the Regulation itself, arguing that its test procedures produced misleading results. It lost the case at first in the EU’s General Court, but then won on appeal in May 2017, with the Court of Justice finding that tests should reflect real-world conditions of use. The case was referred back to the General Court. A ruling on this is expected later this year, probably in September.
Some Brexiteers are using the Dyson case to show the intransigence and rigidity of EU rules, and how they disadvantage British manufacturers. A UK barrister, Martin Howe, who advises Brexit supporters in the Conservative government, reportedly stated in July, with reference to the Dyson case, that EU laws are adopted “in favour of continental interests and against British manufacturers”. He also argued that they are “in favour of existing technologies and against innovators”.
The CJEU’s ruling in the Dyson case will very likely be used as fodder by those who want a clean break from the EU, without having to comply with its myriad and complex legal provisions, particularly in the environmental sphere.