EU Product Liability: Liability Rules for Defective Products Sold Online

Strict liability means a manufacturer or importer is liable for damage caused by a defective product, regardless of fault or negligence. The injured party only needs to prove the product was defective, the damage occurred, and there is a causal link. They do not need to prove the manufacturer was negligent.

The revised PLD explicitly includes software as a 'product', meaning standalone software, firmware, and AI systems can be subject to product liability claims. If a software defect causes physical damage (e.g., a smart home device malfunction causing a fire), the software manufacturer can be held liable. AI systems that produce unexpected harmful outputs may also be considered defective.

The PLD holds the manufacturer primarily liable. For imported products, the importer is treated as the manufacturer. If the manufacturer cannot be identified, the distributor can be held liable unless they identify the manufacturer or their supplier within one month. Under the new directive, fulfilment service providers may also have liability in certain circumstances.

The revised directive eases the burden of proof. Courts can presume a product is defective or that there is a causal link if: the claimant faces excessive difficulty proving it (due to technical or scientific complexity), the product clearly does not comply with EU safety requirements, or the defendant has failed to disclose relevant evidence.

Under the revised PLD, the limitation period is 3 years from when the claimant became aware (or should have become aware) of the damage, defect, and manufacturer's identity. The long-stop period is 25 years from when the product was placed on the market (extended from 10 years). For latent injuries, this period may be longer.

Yes, the PLD applies to products placed on the EU market regardless of where the manufacturer is based. Non-EU manufacturers selling into the EU through online marketplaces can be held liable under the PLD. The importer is treated as the manufacturer if the actual manufacturer is not established in the EU.