Product Liability Directive – Liability for Defective Products

Overview

The new Product Liability Directive fundamentally modernises EU product liability law. For the first time, software, AI systems, and digital services are covered as products. The directive replaces the 1985 predecessor and adapts liability rules to the digital economy.

Who Is Affected?

The directive significantly expands the circle of liable parties:

• Manufacturers of physical and digital products (including software and AI)
• Importers and authorised representatives in the EU
• Online platforms acting as economic operators
• Fulfilment service providers
• Component manufacturers and software developers

Core Obligations

1. Extended product definition: Software, AI systems, and digital services are products
2. Eased burden of proof: For complex products, defectiveness is presumed if the claimant plausibly demonstrates it
3. Disclosure obligation: Manufacturers must disclose technical evidence upon request
4. No liability cap: The previous EUR 70 million liability cap is removed
5. Extended limitation periods: Up to 25 years for latent personal injury
6. Cybersecurity defects: Inadequate security updates can trigger liability

National Transposition

The directive must be transposed into national law by 9 December 2026:

• Germany: Will replace the Product Liability Act (ProdHaftG)
• Austria: Amendment of the Product Liability Act (PHG) required
• Switzerland: Not directly affected but PrHG amendments are being discussed