The EU Revised Product Liability Directive and Software

The revised Product Liability Directive updates EU strict-liability rules for defective products. It clarifies that software is a product whether installed on a device, accessed over a network, or supplied through cloud or software-as-a-service delivery. Developers and producers of software, including AI system providers within the AI Act definition, can be treated as manufacturers. The Directive also addresses software updates, upgrades, and related services that affect product safety. No-fault liability does not mean automatic liability for every AI error. A claimant must prove damage, a defect, and a causal link, though the Directive adds disclosure duties and rebuttable presumptions for certain circumstances that make proof excessively difficult or where non-compliance or obvious malfunction is shown. Defectiveness considers safety a person is entitled to expect or that is required by EU or national law, including presentation, reasonably foreseeable use, product characteristics, and the time it was placed on the market. A system’s compliance paperwork is relevant evidence but does not by itself decide defectiveness. Covered damage includes death, personal injury, certain property damage, and destruction or corruption of data not used for professional purposes. The Directive excludes the content of digital files and mere source code as products. Free and open-source software developed or supplied outside a commercial activity is excluded, while commercial supply, paid support, or other circumstances need careful analysis. The new rules apply only to products placed on the market or put into service after 9 December 2026; the prior Directive continues for earlier products. The Directive does not replace contract, negligence, data-protection, or AI Act duties. Businesses should preserve version, update, warning, testing, and incident evidence, map manufacturer and component-provider roles, and review supply contracts. National transposition and case law will determine practical details; assess the relevant Member State and product timeline.