Dyson loses bid for compensation over EU energy label rules

LUXEMBOURG (CN) — British vacuum maker Dyson on Wednesday lost its lawsuit seeking nearly $200 million in damages over European Union energy labeling requirements. 

Dyson, known for its bagless vacuum cleaners, sued the EU for losses over a change in energy labeling requirements but the Luxembourg-based European General Court ruled the agency responsible for the regulation did not overstep its authority. 

The Malmesbury, England-based company successfully forced the European Commission, the EU’s executive body, to remove the energy labels from vacuums in 2018 after convincing the General Court, the EU's second highest court, that the testing system was flawed. Dyson then asked the same court for 176 million euros ($198.4 million) in damages, arguing the rules cost it millions in sales. 

In an effort to cut emissions and reduce waste, the EU introduced new labeling requirements for consumer goods like washing machines and vacuum cleaners in 2014. The label gave appliances a letter rating, ranging from D to A++++ in conjunction with a color, from red to green. 

Dyson convinced the court that the testing method the EU required unfairly dinged its bagless design and benefits German competitors. The testing scheme used vacuums with empty bags but Dyson pointed out that in real-world conditions, bags would likely be full. The level of the bag had an effect on how much energy a vacuum used. Dyson claimed that competing vacuums with a high energy efficiency rating could drop to a much lower rating while in use.

But the General Court’s Seventh Chamber ruled on Wednesday that the company's request for damages was unfounded because the commission didn’t intentionally cause Dyson harm or fail to properly research the testing parameters. Under EU law, Dyson would need to prove the commission committed a “serious breach of the principle of sound administration" in order to be compensated.  

“It is apparent from the preparatory work … that the commission carried out extensive consultations with experts and interested parties,” the three-judge panel wrote in its ruling rejecting Dyson’s request. 

A Dyson spokesperson blasted the General Court’s ruling in a statement Wednesday.

“This is an insult to the millions of shoppers who were misled and totally ignores the substantial harm – running to 150 million euros – caused to Dyson. Meanwhile the commission walks away scot-free despite having favored the European bagged-machine lobby, including the major German manufacturers, throughout,” the spokesperson said.

They added, “Dyson will appeal, as we disagree with the court’s claim that there was doubt about dust-testing…This judgment sets a very concerning precedent for future regulations across Europe and risks consumers being misled once again.”

The EU has since updated its labels again after too many items were given A or higher ratings. The new requirements came into effect in March 2021. Vacuum cleaners remain exempt from labeling rules. 

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