The new rules would ensure victims get fair compensation when defective products, including digital or refurbished products, cause them physical and psychological harm.
With 33 votes in favour, 2 against and no abstention the Legal Affairs Committee (JURI) and Internal Market and Consumer Protection Committee (IMCO) approved their position on updated rules governing the liability of economic operators for damage caused by defective products.
The aim of the new legislation is to eliminate differences between member states and to adequately respond to the emergence of new technologies (such as AI), the transition to a circular economic model, and the increase in online shopping (including from outside the EU).
Liable operator in the EU
The draft legislation seeks to ensure that even when something defective was bought outside the EU, there is an EU-based business that can be held liable for the damage it causes. MEPs say that in case a liable business cannot be found, consumers could still be compensated via national schemes.
Easier compensation procedure
The proposal aims to simplify the procedure around the burden of proof (i.e. the need, in order to obtain compensation, to prove the product was defective and that this caused the damage suffered). People who suffered harm can request a court to order the operator to disclose evidence that may help with their compensation claim. It also cancels the minimum damage threshold of 500 EUR.
MEPs want national consumer protection authorities to provide guidance to consumers on their compensation claims.
Extended liability period and no impact on free software
According to the adopted text, it will be possible to claim against not only physical damage but also medically recognised psychological damage, and the destruction or irreversible corruption of data (e.g. deletion of files from a hard drive) when the economic loss exceeds 1000 euro.
MEPs further extended the liability period from the Commission’s proposed 20 years to 30 in exceptional cases when symptoms are slow to emerge. To help boost innovation, the rules would not apply to free of charge open-source software.
Following the committee vote, the Legal Affairs Committee co-rapporteur Pascal Arimont (EPP, BE) said: “Like its predecessor, the revised Product Liability Directive aims to strike a balance between remaining an effective instrument for victims of defective products, and the legal certainty economic operators deserve in a fast changing market characterised by digitalisation, the circular economy, and global value chains.”
The Internal Market and Consumer Protection Committee co-rapporteur Vlad-Marius Botoş (Renew, RO) said: “In the new Product Liability Directive, we have a balance between the interests of citizens and legal clarity for economic operators regarding software and the loss and corruption of data. In addition, people can get help from consumer protection agencies in building their case to obtain damages.”
The proposed update to the Directive on the liability of defective products, which is now almost 40 years old, provides an additional layer of consumer protection in the EU on top of national liability regimes. Consumers will also be protected by fault-based rules in the upcoming AI Liability Directive, which is currently being examined by Parliament and Council.
If Parliament as a whole adopts this draft mandate at an upcoming plenary session, talks with EU countries on the final shape of the legislation can start.