Provisional agreement found on the Product Liability Directive

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On 14 December, the European Parliament, Council of the EU, and the European Commission reached a political agreement on the new Product Liability Directive (PLD). The deal was swiftly brokered under the impulsion of the Spanish Presidency at the second inter-institutional negotiation meeting (trilogue). While the final text has not been published yet, the press releases from the European Parliament and from the Council are already available online.

The current Product Liability Directive has constituted a cornerstone of the Single Market since its adoption in 1985. However, most policymakers converged on the need for updating the existing rules to make them fit to the digital age and circular economy. Overall, the new text’s ambition to phase in clearer liability cascading for damages caused by defective products and adapt the EU liability regime to the emergence of new technologies were maintained.

First, in order to account for the increasing presence of digital features in nowadays products, the revised PLD will introduce a new definition of “product” encompassing digital manufacturing files and software. However, free and open-source software developed or supplied outside the context of a commercial activity were explicitly excluded from the Directive’s scope.

Concerning the provisions tackling the liability of economic operators, online platforms will be held liable for a damaged product in case they present the said product in a manner that could mislead an ‘average consumer’ into thinking that the platform itself or a trader under its authority or control is providing the product. In cases where a product’s manufacturer is located outside the EU, cascading liability will apply. Accordingly, the economic operators that will be held liable for damages will firstly be the importer, then, the authorised representative of the manufacturer, and as a last resort, the fulfilment service provider.

To adapt the rules to the circular economy, the political deal clarifies that when a product undergoes substantial modification beyond the control of the original manufacturer and is reintroduced on the market, the person responsible for that modification will be held liable as the manufacturer of the product.

Additionally, the burden of proof was also eased. The text now allows courts to presume the defectiveness of a product if the claimant cannot prove it due to technical or scientific complexity. Lastly, co-legislators agreed on an updated list of damages entitling any natural person who has suffered damage from a defective product to compensation. This includes death or personal injury, medically recognised damage to psychological health, property damage, and destruction or irreversible corruption of data. The right to compensation will cover both material and non-material losses resulting from the damage, provided that they are compensable under national law.

After the entry into force of the new Product Liability Directive, pending an official sign-off by the Council of the EU and the European Parliament’s plenary, the rules will start applying to products placed on the market following a 24-month implementation period.

If you have any questions or wish to know more about this topic, please contact us at  info@ecommerce-europe.eu.

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