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Key Takeaways
As EU Member States, including Germany, begin implementing the EU PLD, companies operating in these markets should consider compliance strategies that reflect the broader scope of liability for defective products, including software and technology, sold in the EU.
In October 2024, the European Union adopted the Product Liability Directive (EU) 2024/2853 ("EU PLD"), requiring Member States to implement the new EU product liability regime by December 9, 2026. See Directive 2024/2853 of the European Parliament and of the Council, art. 32, 2024 O.J. (L) 18.11.2024 (EU). Among other changes, the EU PLD aims to address "shortcomings"in how the previous product liability regime applied to emerging technologies and digital environments.
Recently, Germany became one of the first Member States—alongside the Netherlands—to publish a draft bill implementing the directive. Germany's proposed "New Product Liability Act" upends a framework that has remained largely unchanged since the Berlin Wall fell.
Article 3 of the EU PLD gives Member States very little flexibility in transposing its provisions. See Directive 2024/2853, art. 3, 2024 O.J. (L 2853). Therefore, in line with the provisions required by the EU PLD, Germany's draft bill introduces significant changes to its former product liability framework. These include an expanded definition of "product" that explicitly covers software and AI systems. The draft bill intentionally leaves "software" undefined to keep the legal framework adaptable to emerging technologies. The bill also specifically includes "related services" as a product component and, therefore, a potential source of liability. The EU PLD defines "related services" as certain digital services that are integrated into or inter-connected with a product, such as navigation systems relying on traffic data or health monitoring products linked to sensors. See id. art. 4(3). Therefore, even after the product is placed in the market, manufacturers may continue to face liability for defective software updates or upgrades of the related services.
It also broadens the scope of potential defendants outside the EU, such as fulfillment service providers—companies that store, pack, label, and ship products—and online marketplaces where no manufacturer, importer, or authorized representative within the European Union can be identified. See id. art 8. The draft bill adds claimant friendly procedural rules, including broad disclosure provisions that allow courts to order evidence disclosure once a claimant demonstrates a plausible claim. Id. art. 12. In addition, courts may presume defectiveness and causation in cases involving highly technical or scientifically complex issues. Id. art 9.
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