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Regulations in EU law regarding innovations brought by the digital age entered into force on December 9, 2024.
The failure of contractual and tort liability to provide sufficient protection against damages suffered by individuals due to faulty products has necessitated the regulation of manufacturers' liability. In this context, a regime providing for strict liability has been established in the European Union ("EU") law with the Product Liability Directive No. 85/374 ("Directive No. 85/374"), which has been in force since 1985. In our country, within the scope of harmonization with EU law, the Product Safety and Technical Regulations Law No. 7223 ("ÜGTDK") entered into force in 2021.
Technological developments, the spread of artificial intelligence, the circular economy and global supply chains have led to the need to review the current product liability regime. In this direction, as a result of the evaluation made by the EU Commission, a directive proposal has been prepared that reorganizes liability by taking into account the risks specific to the products offered to the market in the digital age. The new Product Liability Directive 2024/2853 (“Directive”) was published in the EU Official Journal on 18 November 2024, replacing Directive 85/374.
The new Product Liability Directive updates and adapts the EU’s liability rules to new technologies, thus providing better protection for victims and greater legal certainty for economic operators.
The Product Liability Directive enables victims to claim compensation from manufacturers when they suffer damage from a defective product.
The directive is based on 2 main principles
• The manufacturer must compensate for the damage caused by its own defective product
• The victim must prove that the product is defective, the damage caused and that this defect caused the damage.
Conditions and Scope of Liability
As a rule, in order for product liability to arise, the plaintiff must (i) establish that the product is faulty and (ii) prove a causal link between the damage suffered and the fault. The rules for evaluating a product within the scope of the Directive are set out in Article 7: It is regulated that the product will be considered faulty if the safety that a person rightfully expects within the framework of EU law or local law cannot be provided. The objective assessment targeted by the addition of “EU law or local law” refers to the safety expected by the public when all conditions are taken into account.
Again, according to Article 7;
• Presentation and features of the product,
• Compliance with mandatory product safety requirements,
• Foreseeable use,
• The product’s “ability to continue learning” and
• The effect of other products that can reasonably be expected to be used together on the product
are foreseen to be taken into account in this objective assessment. Thus, the way has been paved for the assessment of damages arising from technological products that become faulty as a result of software updates, machine learning, artificial intelligence or integration with other digital services within the scope of product liability.
In the UGTDK, the concept of “non-conformity” has been preferred with respect to the faulty product and the existence of liability has been made conditional on proof of the damage suffered and the causal link between the non-conformity and the damage. In this context, non-conformity refers to the non-compliance with the relevant technical regulation or general product safety legislation and requires an objective assessment in line with the Directive.
Aims of the revision
1-Compatibility with the digital age
2-Compatibility with global value chains
3- Better protection and legal certainty for victims
Who is entitled to compensation?
Anyone who suffers damage as a result of a defective product (e.g. the owner of the product, a passer-by, a family member, etc.) can bring a lawsuit in a national court.
What types of damage are subject to compensation?
The rules under the Directive apply from the moment one of the main damages occurs, namely:
• death or personal injury, including physical and psychological harm
• damage to property
• destruction or corruption of data
The victim is entitled to claim compensation for any of the main types of damage and all damages resulting from them.
Who can be held liable?
The primary person against whom the victim can claim compensation is the manufacturer of the defective product.
However, in various cases, the manufacturer of the product is not established in the EU. While a non-EU manufacturer remains liable under the PLD, a victim may seek compensation from these other responsible parties established in the EU
• the importer or authorised representative
• in the absence of an importer or authorised representative, the fulfilment service provider
The victim may contact the distributor of the defective product, the company established in the EU, to find out who is responsible.
If there is no responsible party in the EU or if there is no response within 1 month of the request for information, the victim may seek compensation from the distributor.
Online platforms under the PLD
The new rules clarify that online platforms can be held liable for defective products if they act as one of the economic operators defined in the new directive (i.e. manufacturer, importer, authorised representative, fulfilment service provider or distributor).
Online platforms that act solely as an intermediary for a defective product may still be held liable under certain conditions under the Digital Services Act (DSA). In such a case, the online platform that merely facilitates the sale is subject to the same liability as the distributor (see above).
Products and defectiveness
The new rules cover all products, regardless of their type (e.g. traditional products, raw materials, digital products), as long as they are placed on the EU market.
According to the new Product Liability Directive, a product is considered defective if it does not provide the safety that a person is entitled to expect from it or what is required by law.
Software and AI systems
PLD’s rules clearly state that all types of software, including applications, operating systems and artificial intelligence systems, are covered by the new directive.
Manufacturers can be held liable for any defects that existed at the time their software or AI systems were released. This includes defects that emerged after release as a result of updates, upgrades or a machine learning feature.
Modified products
The new rules determine that a product that has been significantly modified (for example, through a remanufacturing process) is considered a new product. The person making the change is the manufacturer.
How long is the victim entitled to compensation?
Economic operators remain liable for their defective products for a period of 10 years from the date the product was released. In some health-related cases where the damage took longer to occur, this period is extended to 25 years.
Victims have a period of 3 years to bring a claim for compensation in a national court.
Other innovations in the PLD
In product liability cases, both the plaintiff and the defendant can request access to evidence, provided that it is proportionate and necessary for the case.
To ensure transparency, national high and appellate courts are required to publish their decisions on product liability cases. The Commission will create an EU database to ensure that these decisions are easily accessible to law practitioners, academics and the general public.
The new Product Liability Directive entered into force on 8 December 2024. EU countries will have until 9 December 2026 to transpose the directive into their national law.
The PLD will apply to products placed on the market from 9 December 2026. The 1985 directive will remain in force for products placed on the market before that date.
The new rules cover software, artificial intelligence systems or digital services related to the product. These changes benefit both consumers and producers. Consumers will find it easier to claim compensation in court, while producers will benefit from clear rules for digital products and circular economy business models. In addition, harmonised liability rules across the EU will help reduce operating costs and provide businesses with the certainty they need to invest in innovative products.
These new rules ensure that there is always an economic operator within the Union from whom a victim can claim compensation, taking into account the increasing number of products produced outside the EU on the EU market. Finally, this provision also applies to products sold via online platforms.
Product safety in the EU
Product safety remains one of the EU’s top priorities to protect consumers, encourage innovation and ensure fair and competitive markets. Product safety laws ensure that all goods sold on the EU market meet safety, health and environmental standards.
The General Product Safety Directive applies to non-food products and all sales channels. It includes specific obligations for businesses to ensure that all consumer products in the EU are safe. Many products require a CE mark to confirm that they are EU compliant before they can be sold.
If a product is deemed unsafe, alerts are issued via Safety Gate, a rapid alert system that allows EU countries to share information about hazardous non-food products and enables rapid corrective action.
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