With the publication of the European Union's New Product Liability Directive No. 2024/2853 (“Directive”) in the Official Gazette, a new era begins, replacing the Product Liability Directive No. 85/374, which has been in force since 1985. This new regulation, which includes significant changes to align product liability rules with technological advancements and digital transformation, making the concept of product liability more comprehensive.
In this article, we will examine the key innovations introduced by the Directive, the new obligations it imposes, and the implications of these changes for both manufacturers and consumers.
1- Expanding the Scope of Product Liability
One of the most notable changes introduced by the Directive is the expansion of the definition of “product” to include software and artificial intelligence (AI) systems. While the previous legislation focused solely on physical products, the Directive also covers damages arising from digital solutions and autonomous technologies. As a result of this expanded scope:
- Developers providing digital products and services are now subject to liability.
- Manufacturers’ liability is shaped for damages arising from artificial intelligence algorithms.
- Consumers are entitled to claim compensation for damages arising from software updates, faulty code and system vulnerabilities.
2- Strengthening Consumer Rights Through Presumptions of Fault and Causation
The Directive introduces presumptions of “fault” and “causation” to strengthen consumer rights. In this context:
- If the consumer proves that the product has caused damage, the product will be presumed defective and the manufacturer will be obliged to rebut this presumption.
- The burden of proving the causal link between the product and the damage will also be eased, ensuring a fairer judicial process for consumers.
This regulation is particularly advantageous for consumers who face difficulties in providing technical and scientific evidence in product liability cases.
3- Digital Updates and Long Term Liability
The Directive introduces a regulation to extend the liability of manufacturers for software updates and continuous digital interventions in digital products. In particular, for products that are constantly updated, such as IoT devices and cloud-based services, liability does not end at the physical point of sale, but rather continues throughout the product’s lifespan. Manufacturers remain responsible for ensuring that updates do not introduce defects or cause harm.
4- Removal of the Compensation Threshold
Under Directive No. 85/374, a minimum threshold of EUR 500 applied to claims related to property damage. With the Directive, this limit has been abolished and the injured parties can claim compensation for a borader range of damages. Accordingly:
- The scope of compensable damages has been expanded to include material damages, bodily harm, and psychological injuries.
- Consumers benefit from stronger legal protection and enhanced access to remedies.
5- Extension of the Prescription Period
The Directive extends the limitation period to 25 years providing a longer window for injured parties to seek legal remedies. This is particularly important for products with long-term effects, such as chemical substances, where damage may not become apparent immediately. Consumers will now have the right to file claims even if the harm is discovered years after the product's use.
Overall, the New Product Liability Directive enhances consumer protection against risks arising from digital transformation, while imposing broader and stricter liability obligations on manufacturers. These regulatory changes play a crucial role in balancing technological innovation with consumer safety.
You can access the full text of the Directive via this link.