Better consumer protection: new EU rules for defective products
The EU updated its rules for defective products to better protect consumers and keep up with the development of new technologies.
The EU's Product Liability Directive was initially adopted in 1985. It was updated in 2024 to address the technological advantages newer products may have.
The aim of the revised directive is to set uniform rules for EU countries, ensure proper functioning of the digital and circular economy and help victims of defective products get fairer compensation.
Scope of the revised liability rules
To better reflect the changes in the digital and green world, the definition of a product is expanded to include software, apps and artificial intelligence.
Open-source or free software is excluded from the scope as such software relies on improvements from users. This means the developers cannot be held liable for damage, which may be caused by other users.
Damage
Before the 2024 revision, the directive only recognised physical damage as a legitimate reason to claim compensation. Under the new rules, it is possible to seek compensation for medically recognised psychological damage.
Compensation can also be claimed for the destruction or irreversible corruption of data, such as the deletion of files from a hard drive.
Liability
The liability period is extended to 25 years in some cases where damage is visible after a longer period of time.
Under the revised directive, there should always be someone in the EU who can be held liable for the damage that was caused by a defective product, even if the product was made outside the EU. This can either be the manufacturer, the importer of the product or their authorised representative.
Clearer compensation procedure
The compensation procedure is simplified: consumers no longer need to prove that the product was defective and caused damage, but a court can presume it was defective, especially in technically and scientifically complex cases.
The new rules allow national consumer protection authorities to provide additional help to consumers. They also allow courts to order companies to disclose evidence that may help consumers with their compensation claims.
Previously, the minimum damage threshold to claim compensation was €500, but now there is no threshold. This means consumers can ask for compensation for any damage caused by a defective product.
Background
The European Parliament and the Council reached an agreement on the legislation in December 2023 and then formally approved it in 2024. The directive was published in the EU Official Journal on 18 November 2024 and entered into force on 8 December 2024.
The new rules will apply to products placed on the market 24 months after the directive came into force.
Artificial intelligence liability rules
The EU is also working on rules concerning artificial intelligence liability, which would complement the revised Product Liability Directive and better address damage caused by wrongful behaviour of AI systems, such as breaches of privacy or damage caused by safety issues.
