New sort of applicable economic operators regulation: the Market Surveillance Regulation

American chopper EOsAttentive attendees of my presentations will have remarked in my presentations about economic operators that essential parts of the general Goods Package were being amended and that this may affect companies in the medical devices space.

I now present to you Regulation (EU) 1020/2019 of 20 June 2019 on market surveillance and compliance of products and amending Directive 2004/42/EC and Regulations (EC) No 765/2008 and (EU) No 305/2011, the Market Surveillance Regulation. This regulation replaces part of Regulation 765/2008 (articles 15 to 29 to be precise), the regulation that set up the economic operator regime as we know it under the MDR and IVDR, and lots of other EU CE marking directives and regulations too.

This new regulation’s objective is a uniform framework for market surveillance for products at Union level by

strengthening market surveillance, providing economic operators with clear, transparent and comprehensive rules, intensifying compliance controls and promoting closer cross-border cooperation among enforcement authorities, including through cooperation with customs authorities.”

But hang on, didn’t we have a regime for economic operators, compliance controls and market surveillance in the MDR and IVDR? Didn’t we have just spend loads of money understanding these regimes and now we get this? This cannot possibly apply to the medical devices industry, right?

Well… it depends – I’ll explain right after you’ve enjoyed my latest presentation about economic operator regime developments at the Q1 3rd annual EU MDR implementation conference in affluent Alexandria close to Washington DC in the US last month:

[slideshare id=164486367&doc=neweorequirementsq1conference-190817194401]

Only insofar as it depends

The regulation applies and does not apply to medical devices and IVDs. It does apply because Annex I to the regulation contains all medical devices and IVD regulations and directives that the regulation applies to in so far as there are no specific provisions with the same objective in the Union har­monisation legislation (except strangely the MDD and AIMDD), which regulate in a more specific manner particular aspects of market surveillance and enforcement (article 2).

It does not apply insofar as (see its recital 4):

“[…] in accordance with the principle of lex specialis, this Regulation should apply only in so far as there are no specific provisions with the same objective, nature or effect in Union harmonisation legislation. The corresponding provisions of this Regulation should therefore not apply in the areas covered by such specific provisions, for instance those set out in Regulations (EC) No 1223/2009 (3), (EU) 2017/745 (4) and (EU) 2017/746 (5), including as regards the use of the European database on medical devices (EUDAMED), and (EU) 2018/858 (6) of the European Parliament and of the Council.”

You can understand that a sentence like “in accordance with the principle of lex specialis, this Regulation should apply only in so far as there are no specific provisions with the same objective, nature or effect in Union harmonisation legislation” makes my lawyer pulse go up considerably. However, it’s not a super clear demarkation criterion. It basically says: whatever is in this regulation but not in the MDR/IVDR by ‘objective, nature or effect’ is still governed by the Market Surveillance Regulation. Up to now I would look into the fantastic Blue Guide to understand whatever is not clear in the MDR and IVDR in terms of CE marking and economic operators. Now we also have this additional regulation to inform and bind us, because obviously this regulation will affect how the corresponding rules in the MDR and IVDR will be interpreted. Also, the regulation contains additional items that apply in addition to the MDR and IVDR, as we will see later on in this blog.

And, finally, don’t forget that the Market Surveillance Regulation applies to other EU regulations and directives than the MDR and IVDR that devices are also covered by, such as the REACH Regulation (chemicals) and the RoHS Directive (hazardous substances). Take a look in Annex 1 of the regulation for the whole list of directives and regulations covered by the Market Surveillance Regulation.

So, happy times – let’s take a tour of the new Market Surveillance Regulation and see how this may impact what we know about EO regime and other devices related under the MDR and IVDR.

Fulfillment service providers (article 4)

The definition of economic operator in the MDR and IVDR do not include fulfillment service providers, but the Blue Guide mentions under the heading of distributors that fulfillment service providers doing more than mere box moving could qualify as economic operator. In that regard it is important to know who qualifies as a fulfillment service that can be a distributor. Article 3 (11) of the Market Surveillance Regulation defines fulfillment services provider as:

 “any natural or legal person offering, in the course of commercial activity, at least two of the following services:

  • warehousing, packaging, addressing and dispatching, without having ownership of the products involved, excluding postal services as defined in point 1 of Article 2 of Directive 97/67/EC of the European Parliament and of the Council,

  • parcel delivery services as defined in point 2 of Article 2 of Regulation (EU) 2018/644 of the European Parliament and of the Council, and

  • any other postal services or freight transport services;” (underlining added)

This is much more detailed than the Blue Guide’s description of “the activities of fulfillment service providers as described above go beyond those of parcel service providers that provide clearance services, sorting, transport and delivery of parcels.”. So, now we have a better picture of what a fulfillment service provider looks like. 

Distance sales (article 6)

Article 6 of the MDR and IVDR specifies that devices offered to natural and legal persons in the Union must comply with those regulations. The new market surveillance regulation adds that making available (the term missing in article 6 MDR and IVDR, which merely use ‘offer’) occurs if the offer is targeted at end users in the Union. An offer for sale is considered to be targeted at end users in the Union if the relevant economic operator directs, by any means, its activities to a Member State. This can be assumed, for example, when the website is available in a language spoken only in that member state.

This is quite relevant for companies that offer the sale of tests or other devices at a distance to end users in the EU, and shows that the concept of making available in the Blue Guide does not require an actual sale to be made (as you would already know from the Blue Guide, so this is not new), offering for sale is sufficient.

Another feature of the Market Surveillance Regulation is that the fulfillment service provider becomes responsible for the device when there is no representative in the EU (manufacturer, importer or authorized representative). This means that it becomes important for fulfillment service providers to establish if the devices that they are delivering comply in terms of economic operator organization. In cases where the non-Union established manufacturer thinks he’s safe, the fulfillment services provider in the EU now becomes an enforcement target.

Small bombshell in article 11 (9): Lycocentre revisited

In the Lycocentre case the EU Court stated that incomplete harmonization in the medical devices field in the EU allowed for member states to reach very different conclusions regarding regulatory compliance of the same device. Well, that’s mostly over now with the Market Surveillance Regulation, which provides in article 11 (9) that

“Without prejudice to any Union safeguard procedure pursuant to the applicable Union harmonisation legislation, products that have been deemed to be non-compliant on the basis of a decision of a market surveillance authority in one Member State shall be presumed to be non-compliant by market surveillance authorities in other Member States, unless a relevant market surveillance authority in another Member State concluded the contrary on the basis of its own investigation, taking into account the input, if any, provided by an economic operator.”

In other words, if one authority decides that the device is non-compliant (for example, as in Lycocentre) because the authority thinks it’s a medicinal product rather than a device, all other authorities must assume non-compliance too (the regulation does not say it should be on those same grounds, but this seems implied). This would only be different if they conclude otherwise in their own investigation, whether or not after input of the economic operator.  As you can imagine, this will be interesting and potentially complex for manufacturers, because of the very different views national authorities can have about qualification and classification of devices alone already.

This provision in the Market Surveillance Regulation has interacts with article 4 MDR and 3 IVDR (Regulatory Status of Products), which allow the Commission to take qualification decisions about products by means of implementing act on its own initiative or upon a member state’s request. Where the non-compliance concerns qualification this provision can be used to overrule a situation where member states still want to maintain a divergent qualification, but you or a member state will need to win the Commission over first.

Recovery of costs by market surveillance authorities (article 15)

In addition to the possibility to levy fees in relation to the application of the MDR and IVDR, the regulation allows member states to authorise their market surveillance authorities to reclaim from the relevant economic operator the totality of the costs of their activities with respect to instances of non-compliance. These costs may include the costs of carrying out testing, the costs of taking measures in accordance with customs holds, the costs of storage and the costs of activities relating to products that are found to be non-compliant and are subject to corrective action prior to their release for free circulation or their placing on the market.

For example, it would seem that this provision in the Market Surveillance Directive allows competent authorities to charge costs for evaluation of devices suspected of presenting an unacceptable risk or other non-compliance under article 94 MDR / 89 IVDR and costs of measures implemented to deal with devices presenting an unacceptable risk to health and safety under article 95 MDR / 90 IVDR.

Procedural rights of economic operators (article 18)

The Market Surveillance Regulation also contains one provision of procedural rights relevant under the MDR and IVDR: before any measure, decision or order taken or made by market surveillance authorities the economic operator concerned must be given the opportunity to be heard within an appropriate period of not less than 10 working days, (unless that is not possible because of the urgency of the measure, decision or order, based on health or safety requirements or other grounds relating to the public interests covered by the relevant Union harmonisation legislation). This would be additional to the market surveillance provisions in the MDR and IVDR, which do not contain this 10 working day minimum period. Where member states do not have this period built into their procedural law for the authorities concerned, they will have to take this period into account.

Market surveillance

The Market Surveillance Regulation makes changes in the market surveillance regime for products, of which some general items are already covered in the MDR/IVDR and others are not, as set out in this approximative table:

Market Surveillance Regulation


Market surveillance national authorities are granted strengthened powers

Covered, chapter VII section 3 (Market Surveillance)

The tasks of market surveillance are defined and powers like taking samples and imposing penalties are harmonized

Covered, chapter VII section 3 (Market Surveillance)

Market surveillance authorities may reclaim all cost of their activities in case of non-compliant products

Not covered in market surveillance section

Harmonized approach for surveillance at EU borders by customs and surveillance authorities

Not covered in regulations

A Union Product Compliance Network (UPCN) to be set up by January 1, 2021

Covered, MDCG and electronic system on market surveillance (part of Eudamed)

The items not covered in the MDR/IVDR will be governed by the Market Surveillance Regulation and implementing national law for that regulation.

Date of application

The Market Surveillance Regulation has already entered into force last month and it applies from 16 July 2021, except for some provisions related to implementation by the authorities. So, more on your plate to figure out for the MDR and IVDR.


Questions about this new regulation or the MDR or IVDR? I will be speaking about several subjects (including M&A and the MDR/IVDR, MDR implementation and IVDR implementation) at the upcoming RAPS Regulatory Convergence in Philadelphia from 21 to 24 September and about the MDR at the Medtech Conference in Boston from 23 to 25 September.

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