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New Liability Rules on Products and AI Envisaged by the European Commission

Publication: ZRVP

Recently, the Commission adopted new proposals to revise liability rules to better answer technology progress and to ultimately boost economies.

This initiative encompasses two ways of action, by adjusting the Council Directive 85/374/EEC of 25 July 1985 on the approximation of the laws, regulations and administrative provisions of the Member States concerning liability for defective products (“Product Liability Directive”) and by adopting new Directive on liability for defective products (“AI Liability Directive”), both aiming at complementing a prolonged effort of European institutions to ensure protection mechanisms in line with the green and digital transformation.

Mainly, the Commission intends to ensure a higher protection for businesses and consumers by enabling a higher degree of transparency on the mechanisms they have at their disposal to the extent that they suffer any damages.

The amendments on the Product Liability Directive under which compensation can be claimed for damage caused by defective products should keep up with significant changes in the way products are produced, distributed, and operated nowadays.

In this respect, the Commission’s proposal sets, among others, the following principles:

  • Circular economy business models would benefit from more transparent liability rules. Explicitly, businesses that substantially modify a product and place it back on the market would also be liable under the Directive.
  • Maintain the same rate of progress with technology by imposing liability rules for so-called auxiliar services, like software updates and AI or other digital services indispensable for using the product itself.
  • Always ensure that liability rules are applicable to EU importers by setting the possibility for consumers to turn against businesses that are based in the EU, and which import products from manufactures outside the EU.

This principle seems to be proposed in the context in which an increasing trend has been determined for consumers to purchase products directly from non-EU countries and thus without there being a manufacturer or importer based in the EU against which consumers could claim damages if they might suffer damages.

On the other side, the AI Directive, which aims at ruling claims outside the scope of Product Liability Directive tends to complement the effects of Product Liability Directive, and thus ensure higher protection for consumers. In this respect, the proposal has in view to set unitary thresholds for all Member States which will increase guarantees for businesses and consumers as well. One major beneficial effect relates to setting a smoother process for victims in terms of demonstrating one’s fault which led to consumer’s harm.

Although major steps are taken to increase European consumer’s security, the proposal will need to be further assessed and adopted by the European Parliament and the Council.

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