REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL AND THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE on the Application of the Council Directive on the approximation of the laws, regulations, and administrative provisions of the Member States concerning liability for defective products (85/374/EEC)
Date: 2018-05-07
Institutions: Directorate-General for Internal Market, Industry, Entrepreneurship and SMEs, European Commission
Subjects: application of EU law, civil liability, defective product, producer's liability, product quality, technological change

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 7.5.2018 COM(2018) 246 final  REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL AND THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE on the Application of the Council Directive on the approximation of the laws, regulations, and administrative provisions of the Member States concerning liability for defective products (85/374/EEC)  {SWD(2018) 157 final} - {SWD(2018) 158 final}  
 
 
1. 

INTRODUCTION 

For  more  than  three  decades,  the  Product  Liability  Directive1  (‘the  Directive’)  has 
ensured  that  producers  take  responsibility  for  defective  products  vis-à-vis  consumers. 
When  it  was  adopted  in  1985,  the  Directive  was  a  bold  and  modern  instrument  that 
required substantial adaptations of Member States’ civil codes. 

The Directive was one of the first pieces of EU legislation that explicitly aimed to protect 
consumers. It introduced the concept of strict liability, where producers are responsible 
for defective products, regardless of whether the defect is their fault. The Directive also 
aims  to  contribute  to  economic  growth  by  providing  a  stable  and  legal  environment  of 
equal competition that allows companies to place innovative products on the market. 

The Directive complements EU product safety legislation and what is known as the ‘New 
Approach’  to  product  safety.  Introduced  at  the  same  time  as  the  Directive,  the  ‘New 
Approach’  aims  to  prevent  accidents  by  setting  common  safety  rules2  that  allow  the 
single market for goods to function smoothly and to reduce administrative burden. The 
Directive is the safety net for instances when accidents nevertheless occur. 

2018  is  not  1985.  The  EU  and  its  rules  on  product  safety  have  evolved,  as  have  the 
economy and technologies. Many products available today have characteristics that were 
considered science fiction in the 1980s. The challenges we are facing now and even more 
acutely in the future — to name but a few — relate to digitisation, the Internet of Things, 
artificial intelligence and cybersecurity. 

Exponential  growth  in  computing  power,  the  availability  of  data  and  progress  in 
algorithms turn are making especially artificial intelligence (AI) in particular into one of 
the  most  important  technologies  of  the  21st  century.  The  Commission  adopted  its 
Communication  on  ‘Maximising  the  benefits  of  Artificial  Intelligence’3  to  ensure  a 
coherent policy response that also addresses legal challenges. Product safety and liability 
–— should there be damage –— are one essential aspect in finding of a policy response 
that  enables  European  societies,  businesses  and  consumers  to  benefit  from  artificial 
intelligence. 

Given  that  the  Directive  has  never  been  evaluated  since  its  entry  into  force  and  in  the 
light  of  these  recent  technological  developments,  the  Commission  carried  out  an 
evaluation  of  the  Directive  to  assess  its  performance.  The  evaluation  includes 
consideration  of  recent  technological  developments.  More  specifically,  it  analysed 
whether the Directive: (i) continues to be effective in meeting its original objectives; (ii) 
is  efficient;  (iii)  is  consistent  with  the  relevant  EU  rules;  (iv)  remains  relevant  by 

1  

2  

3  

Council Directive 85/374/EEC of 25 July 1985 on the approximation of the laws, regulations, and 
administrative  provisions  of  the  Member  States  concerning  liability  for  defective  products, 
http://data.europa.eu/eli/dir/1985/374/oj. 
Today this ‘type of legislation’ covers the vast majority of products available on EU markets.  It has 
been continuously updated to keep track of technological developments. 
Commission  Communication,  ‘Maximising  the  Benefits  of  Artificial  Intelligence  for  Europe’, 
(COM(2018)237). 

1 

 
                                                 
 
embracing recent technological changes; and (v) whether EU product liability legislation 
continues to provide added value to businesses and injured persons4.  

The  evaluation  also  looked  at  whether  the  Directive  in  its  current  form  still  serves  its 
purpose. Does it adequately  address the challenges of increasingly autonomous devices 
and cybersecurity? What about sustainability and reaching a circular economy? Does the 
Directive  unnecessarily  discourage  producers  from  placing  innovative  products  on  the 
market?  Or  conversely,  does  it  deter  manufacturers  from  placing  faulty  and  unsafe 
products on the market? Does it still protect injured persons in a changing world? 

The evaluation has shown that even though products are much more complex today than 
in 1985, the Product Liability Directive continues to be an adequate tool.  

However, we need to clarify the legal understanding of certain concepts (such as product, 
producer,  defect,  damage  and the  burden  of  proof)  and  look  closely at certain  products 
such  as  pharmaceuticals,  which  may  pose  a  challenge  to  the  performance  of  the 
Directive.  

In addition, on emerging digital technologies, a preliminary analysis on how these affect 
the functioning of the Directive, has raised a number of open questions. In light of these 
findings, the Commission will consult broadly to reach a common understanding with all 
stakeholders.  The  aim  is  to  draw  up  comprehensive  guidance  on  how  to  apply  the 
Directive today.  In  addition,  it  will assess to  what  extent  emerging  digital  technologies 
can be adequately addressed by the current Directive. This guidance and the assessment 
will help us to pave the way forward for a product liability framework fit for the digital 
industrial revolution. 

Our  goal  is  to  ensure  that:  (i)  the  EU  continues  to  have  a  product  liability  regime  that 
fosters innovation; (ii) products placed on the EU market are safe5; and (iii) people who 
suffer  injury  because  of  defective  products  are  able  to  claim  compensation  when 
accidents  occur.  We  have  a  responsibility  both  to  businesses  and  to  people  who  suffer 
injury.  This  is  our  compass.  We  need  to  navigate  the  coming  technological  changes 
carefully and sensibly so as to respect either objective. 

2.  THE MAIN CHARACTERISTICS OF THE DIRECTIVE 

The  Directive  applies  to  all  movable  products,  even  if  integrated  into  another  movable 
product,  and  specifically  includes  electricity.  It  also  introduces  the  concept  of  strict 
liability of producers6. In line with EU safety legislation7, producers are responsible for 
their  products.  If  a  product  is  defective  and  causes  personal  injury  or  material  damage 
above EUR 500 to an item of property mainly for private use or consumption, producers 

4  

5  
6  

7  

Commission  Staff  Working  Document,  Evaluation  of  Council  Directive  85/374/EEC, 
(SWD(2018)157). 
In addition to already existing product legislation. 
The notion of "producer" includes the manufacturer of a finished product, the producer of any raw 
material or the manufacturer of a component part and any person who, by  putting his name, trade 
mark or other distinguishing feature on the product presents himself as its producer (Article 3 of the 
Directive). 
Under  EU  safety  legislation,  the  manufacturer  is  always  responsible  for  ensuring  that  a  product 
meets  the  requirements  of  the  relevant  EU  legislation,  even  if  there  is  mandatory  third  party 
conformity assessment. 

2 

 
                                                 
are liable regardless of whether or not they are at fault. A product is considered defective 
if it does not provide the safety a person is entitled to expect8. 

Example  —  When  driving  a  car,  a  person  had  to  avoid  an  unexpectedly  appearing 
obstacle. He swerved off the road and his vehicle started shaking strongly. The sensors of 
the  airbag  considered  this  an  accident  and  went  off.  One  of  the  lateral  airbags  hit  the 
driver in the neck, compressed the artery and caused a stroke. Courts tried to determine 
whether  the  producer  had  correctly  calculated  the  risk  of  a  malfunctioning  of  the 
sensors. The claim was rejected by two instances, but then invalidated at a higher level. 
The case was ultimately settled out of Court. 

Strict  liability  represents  a  strong  tool  for  the  protection  of  injured  persons.  However, 
there are a number of circumstances where the Directive allows producers to take certain 
calculated  risks  when  placing  innovative  products  on  the  market.  The  producer  is  not 
liable  if  it  can  prove  that:  (i)  the  defect  did  not  exist  when  the  product  was  put  into 
circulation;  (ii)  the  defect  is  due  to  compliance  with  regulations  issued  by  public 
authorities; or (iii) the state of technical knowledge at the time of putting the product on 
the market made it impossible to discover the defect. Member States have the possibility 
to obtain a derogation from this last exemption. 

Example  –A  person  suffered  severe  personal  injuries  when  the  front  brakes  of  the 
second-hand motorbike he was riding seized without warning and he was thrown off. The 
motorbike had been well-maintained, had low mileage and was only two years old. The 
claimant sued and won in the first instance. An appeal by the producer failed because the 
Court explained that the Claimant did not have to prove the existence of a specific design 
or manufacturing defect for there to be a finding of defect, nor did he have to show how 
the  defect  was  caused.  The  Claimant  merely  had  to  show  that  a  defect  existed  at  the 
relevant time and that this caused the accident. The Court found on the expert evidence 
that  there  must  have  been  a  defect  in  the  brakes  of  this  particular  motorbike.  This 
susceptibility  was  not  present  in  other  bikes  of  the  same  type,  and  therefore  the  Court 
was  entitled  to  infer  that  these  particular  brakes  were  defective,  and  the  Claimant  had 
proved his case 

From the day that they become aware of the defect, injured persons have 3 years to claim 
damages. Claims are no longer possible 10 years after the product was put in circulation. 
To sustain their claim, those who have suffered injury must prove the damage, the defect 
and the causal link between the defect and the damage. 

3. 

IMPLEMENTATION OF THE DIRECTIVE 

The Directive requires the Commission to report to the Council and Parliament9 every 5 
years  on  its  implementation.  This  is  the  fifth  report  which  is  complemented  by  an 
evaluation. 

8  

9  

This takes all circumstances into account, including the presentation of the product, the use to which 
it  could  reasonably  be  expected  the  product  would  be  put,  and  the  time  the  product  was  put  into 
circulation. Article 6 of the Directive states that a product must not be considered defective for the 
sole reason that a better product is subsequently put into circulation. 
COM(95) 617 final, COM(2000) 893 final, COM(2006) 496 final, COM(2011) 547 final. Previous 
reports noted an  increase  in cases related  to  the  Directive.  They  also  noted  the  general  consensus 
about having  a  product  liability  framework at  EU  level. However,  certain debates on  some  of  the 
concepts  used  in  the  Directive  e.g.  on  the  burden  of  proof  can  be  considered  longstanding.  Apart 
3 

 
                                                 
The Commission did not receive any complaints or launch any infringement proceedings 
during  the  2011-2017  reporting  period.  However,  the  Directive  does  not  cover  or 
harmonise  all  aspects  of  product  liability.  There  is  room  for  different  national 
approaches,  for  example  on  systems  to  settle  claims  for  damages,  or  on  how  to  bring 
proof  of  damage.  These  are  left  to  Member  States  to  decide.  Member  State  may  also 
introduce  or  maintain  other  national  instruments  for  the  liability  of  producers  based  on 
fault.  

Five Member States adopted the ‘development risk derogation’ set out in Article 15(1)(b) 
of the Directive, whereby a producer is also liable if the state of scientific and technical 
knowledge  when  the  product  entered  circulation  was  not  such  that  the  defect  could  be 
discovered.  Two  Member  States  apply  this  to  all  sectors10,  while  two  notably  exclude 
pharmaceutical products11 and one excludes products of the human body12. 

The  findings  of  the  evaluation  suggest  that  most  product  liability  claims  between  2000 
and  2016  were  actually  settled  out  of  Court.  46 %  of  cases  were  settled  in  direct 
negotiation, 32 % in Court, 15 % through alternative dispute settlement mechanisms, and 
7 %  were  resolved  through  other  means  such  as  through  the  insurer  of  the  responsible 
party13. The external study commissioned for the evaluation identified 798 claims based 
on product liability rules from 2000 to 201614. It is, however, likely that the real number 
of cases was higher, and not all cases were included in the public and private databases 
consulted.  The  products  most  concerned  are  raw  materials  (21.2 %  of  cases), 
pharmaceuticals  (16.1 %),  vehicles  (15.2 %)  and  machinery  (12.4 %).  The  types  of 
damage identified relate to the characteristics of each product15. 

4. 

 COURT OF JUSTICE CASE LAW DURING 2011-2017 

While the number of court cases at national level and the sectors involved do not point to 
the prevalence of one specific sector, the situation is different when we look at matters 
brought  before  the  Court  of  Justice  of  the  European  Union.  The  four  judgments  of  the 
Court  during  the  reporting  period  concerned  medical  devices  and  pharmaceutical 
products, potentially highlighting specific problems in the application of the Directive to 
healthcare products. 

In a case where a hospital bed had burned a patient during surgery, the Court confirmed 
that  the  Directive  applies  only  to  producers,  not  to  service  providers  that  may  use 
products  which  are  found  to  be  defective16.  However,  the  Directive  does  not  prevent 

from  extending  the  scope  of  the  Directive  by  Directive  1999/34/EC,  the  Commission  did  not 
consider amending it to be necessary. 
Finland and Luxembourg. 
The Hungarian Civil Code states that the producer of any pharmaceutical product is liable even if 
the state of scientific and technical knowledge at the time when the product was put into circulation 
was not such as to enable detection of the existence of the defect. Along the same line, the Spanish 
Royal Legislative Decree 1/2007 of 16 November 2007 states that producers of medicinal products, 
foods or foodstuffs intended for human consumption cannot invoke the exemption provided under 
Article 7(e) of the Directive. 
France. 
These  percentages  are  based  on  the  responses  to  the  open  public  consultation  and  are  averages 
across 28 Member States. 
Technopolis,  Evaluation  Study  of  Council  Directive  85/374/EEC  on  the  approximation  of  laws, 
regulations  and  administrative  burdens  of  the  Member  States  concerning  liability  for  defective 
products. 
This is based on the analysis of 547 cases according to the Combined Nomenclature. 
Judgment of 21 December 2011, Case C-495/10. 

10  
11  

12  
13  

14  

15  
16  

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Member States from establishing strict liability for service providers as long as they do 
not in any way limit the producers’ strict liability for their products as provided for in the 
Directive. 

The  single  most  difficult  stepping  stone  to  receiving  compensation  for  damages  is  the 
burden of proof on the injured person to demonstrate a causal link between the product 
defect and the damage. The Court has made doing this considerably easier by accepting 
national rules that help the injured person establish this proof, provided that this does not 
undermine  the  Directive’s  placing  of  the  burden  of  proof  on  the  injured  person.  For 
example, the Court indicated that national rules granting consumers the right to require 
the manufacturer of a product to provide them with information on the adverse effects of 
that product can be accepted as they fall outside the scope of the Directive17. Such rules 
make it easier for the injured person to establish the producer’s liability. Also, the Court 
accepted  national  evidentiary  rules  under  which  a  national  court  may  consider  certain 
factual  evidence  to  constitute  serious,  specific  and  consistent  evidence  of  a  defect  of  a 
product and to constitute the causal link with the damage, even if there is no conclusive 
scientific  evidence  on  this18.  Especially  for  adverse  effects  of  pharmaceutical  products, 
where  evidence  often  is  inconclusive,  this  may  make  it  easier  for  people  who  have 
suffered injury to obtain redress. The Court also indicated that products of one group or 
of  the  same  production  series  with  a  potential  defect  may  be  considered  as  defective 
without the need to establish the actual defect of the individual product19. The cost of the 
operation  needed  to  remove  such  potentially  defective  products  is  also  considered 
damage within the meaning of the Directive20. 

Example:  Gradual  degradation  of  pacemakers.  A  producer  of  pacemakers  informed 
physicians that a component used to hermetically seal their pacemakers may experience 
a gradual degradation. That defect could lead to premature battery depletion, resulting 
in  loss  of  telemetry  and/or  loss  of  pacing  output  without  warning.  The  manufacturer 
recommended replacing such pacemakers if necessary and said that it would make new 
pacemakers  available  free  of  charge.  Two  patients  received  free  new  pacemakers.  The 
defective  pacemakers  were  destroyed  without  further  examination.  The  insurance 
company claimed compensation from the producer under the Directive also for the cost 
of the operation to replace the pacemakers as damage. 

5.  EVALUATION OF THE DIRECTIVE 

The Commission’s evaluation is based on an external study whose findings are analysed 
in the accompanying Commission staff working document21. The evaluation analysed: (i) 
whether  the  Directive  was  still  meeting  its  original  objectives  of  ensuring  producer 
liability,  the  functioning  of  the  single  market  and  the  protection  and  compensation  of 
injured  people;  and  (ii)  whether  it  was  demonstrating  effectiveness,  efficiency, 
coherence, relevance and EU added value. 

17  
18  
19  
20  
21  

Judgment of 20 November 2014, Case C-310/13. 
Judgment of 21 June 2017, Case C-621/15. 
Judgment of 5 March 2015, Joined Cases C-503/13 and C-504/13. 
Ibid. 
See the accompanying staff working document SWD(2018)157 on the evaluation of the Directive. 
5 

 
                                                 
5.1.  Effectiveness 

There  is  a  wide  awareness  among  stakeholders  that  producers  are  liable  for  defects  in 
their  products.  Industry  is,  on  the  whole,  satisfied  with  the  Directive  as  a  means  of 
ensuring liability for defective products. Conversely, consumer organisations are critical 
of  the  fact  that it  is  difficult  for injured  persons  to  prove  the  link  between  damage  and 
defect, particularly because they have to advance any cost related to bringing this proof 
and  because  they  are  at  a  disadvantage  in  terms  of  technical  information  about  the 
product. The evaluation identified this as the most difficult stepping stone for consumers 
to obtain compensation. However, it is a requirement that cannot be set aside. The EUR 
500  threshold  and  time  limitations  for  claims  (especially  for  certain  products  such  as 
pharmaceuticals)  also  limit  the  number  of  cases  for  which  consumers  can  claim 
compensation.  

Overall,  the  Directive  can  be  considered  to  contribute  to  a  reasonable  balance  between 
protecting  those  who  suffer  injury  and  ensuring  fair  competition  on  the  single  market. 
However, some of the Directive’s concepts require guidance and/or clarification as they 
hamper the effectiveness of the Directive. In particular, a better common understanding 
of  what  is  meant  by  ‘product’,  ‘damage’  and  ’defect’  as  well  as  clarifications  on  the 
burden of proof would render the Directive’s application more effective. 

As  far  as  new  technologies  are  concerned,  the  lack  of  information  on  specific  Court 
cases,  consumer  complaints  or  relevant  practical  experience  from  stakeholders  made  it 
impossible to reach any definitive conclusion22. Given these technologies’ characteristics 
(particularly their complexity and autonomy), it is clear that the Commission will need to 
follow  up  on  any  unanswered  questions.  Some  of  these  characteristics  may  challenge 
whether the existing product liability framework is appropriate to ensure effective redress 
for consumers and investment stability for businesses. Other aspects may, by contrast, be 
adequately addressed by the current Directive. The Commission will closely analyse any 
potential challenges in the follow-up to this report.  

5.2.  Efficiency 

The  Directive  is  about  striking  a  balance  between  injured  persons’  and  producers’ 
interests. Its costs are a direct trade-off: what is to the benefit of the injured persons is the 
producers’  cost  and  vice  versa.  The  main  cost  for  producers  is  the  strict  liability.  For 
consumers,  costs  are  related  to  the  burden  of  proof,  the  EUR 500  threshold  and  time 
limitations. The concepts are simple, but their application may not always be.  

Overall,  the  Directive  is  considered  efficient  at  delivering  a  stable  legal  framework  for 
the  single  market  and  for  harmonising  consumer  protection.  However,  the  balance 
between costs and benefits relating to the Directive is not uniform across Member States 
and sectors or product types for injured persons. The complexity of a product determines 
the cost of proving a defect. For pharmaceutical products , for instance, the costs may not 
be fairly distributed between producers and injured persons. There are also other factors 
that  play  a  significant  role  in  determining  the  Directive’s  efficiency.  One  particular 
factor, representing the most important administrative burden, is the cost and duration of 
judicial  proceedings.  These  vary  substantially  from  one  Member  State  to  another  and 
have a more direct effect on injured persons than on producers. However, as these are not 

22  

The external study on which the evaluation was based could only identify one court case where the 
issue  at  stake was  specifically related  to  emerging  digital  technologies.  The  case  related  to  a  data 
storage unit in Bulgaria. (Bulgarian case no. 20942/2012). 

6 

 
                                                 
due to burdens that the Directive itself imposes no specific simplification potential was 
identified in this respect. 

5.3.  Coherence 

The Directive does not exist in a legal vacuum and cannot be viewed in isolation. It is an 
integral part of an EU legal framework that exists to ensure the functioning of the single 
market, to promote innovation and growth through technology-neutral safety rules and to 
protect consumer safety and well-being. 

The  evaluation  has  found  the  Directive  to  be  consistent  with  the  overall  relevant  EU 
rules. This covered existing and proposed EU rules on consumer protection in the area of 
contractual  liability  as  well  as  those  on  dispute  resolution23.  More  importantly,  the 
Directive is consistent with EU product safety rules as laid down in the harmonised EU 
product safety rules24 and the General Product Safety Directive25. The EU product safety 
rules describe the safety levels that products placed on the EU market must meet. In turn, 
they  represent  the  safety  levels  for  these  products  that  an  injured  person  is  entitled  to 
expect under the Directive. Producers are also exempt from liability if they can prove that 
a defect is due to compliance with these rules. As technological changes will bring about 
corresponding changes in EU legislation, this consistency in the overall rules will need to 
be maintained26. 

5.4.  Relevance 

The  Directive  has  managed  to  withstand  three  decades  of  technical  innovation.  The 
original  needs  to  ensure  producers’  liability,  consumer  protection  and  undistorted 

23  

24  

25  

26  

Directive 2011/83/EU  of  the European  Parliament  and  the  Council  on  consumer  rights,  amending  
Council  Directive  93/13/EEC  and  Directive  1999/44/EC  of  the  European  Parliament  and  of  the 
Council  and  repealing  Council  Directive  85/577/EEC  and  Directive  97/7/EC  of  the  European 
Parliament  and  of  the  Council;  Directive  1999/44/EC of  the  European Parliament  and Council  on 
certain aspects of the sales of consumer goods and associated guarantees; Proposal for a Directive of 
the  European  parliament  and  Council  on  certain  aspects  concerning  contracts  for  the  supply  of 
digital  content,  COM/2015/0634  final;  Amended  proposal  for  a  Directive  of  the  European 
parliament  and  Council  on  certain  aspects  concerning  contracts  for  the  online  and  other  distance 
sales  of  goods,  amending  Regulation  (EC)  No  2006/2004  of  the  European  Parliament  and  of  the 
Council  and  Directive  2009/22/EC  of  the  European  Parliament  and  of  the  Council  and  repealing 
Directive 1999/44/EC of the European Parliament and of the Council, COM/2017/0637 final. 
E.g.  Directive  2006/42/EC  on  machinery,  Directive  2009/48/EC  on  the  safety  of  toys,  Regulation 
(EU) No 305/2011 laying down harmonised conditions for the marketing of construction products 
and  repealing  Council  Directive  89/106/EEC,  Directive  2013/53/EU  on  recreational  craft  and 
personal watercraft and repealing Directive 94/25/EC, Directive 2014/29/EU on the harmonisation 
of the laws of the Member States relating to the making available on the market of simple pressure 
vessels,  Directive  2014/33/EU  on  the  harmonisation  of  the  laws  of  the  Member  States  relating  to 
lifts and safety components for lifts, Directive 2014/35/EU relating to the making available on the 
market of electrical equipment designed for use within certain voltage limits, Directive 2014/53/EU 
relating  to  the  making  available  on  the  market  of  radio  equipment  and  repealing  Directive 
1999/5/EC,  Regulation  (EU)  2017/745  on  medical  devices,  amending  Directive  2001/83/EC, 
Regulation (EC) No 178/2002 and Regulation (EC) No 1223/2009 and repealing Council Directives 
90/385/EEC and 93/42/EEC, Regulation (EU) 2017/746 on in vitro diagnostic medical devices and 
repealing Directive 98/79/EC and Commission Decision 2010/227/EU. 
Directive 2001/95/EC of the European Parliament and Council on general product safety. EU rules 
in the field of transport allocate to manufacturers or operators the responsibility to maintain the safe 
state of vehicles, planes or vessels. 
The evaluation of the Machinery Directive has already found that emerging digital technologies are 
not specifically addressed in the Directive’s essential health and safety requirements. Attention will 
also have to be paid if the development risk clause and the possibility to derogate from it leads to 
regulatory fragmentation that may be problematic for the uptake of AI.  

7 

 
                                                 
competition  remain  relevant.  However,  when 
technological 
developments,  stakeholders  have  expressed  concerns  about  the  continued  relevance  of 
the Directive’s concepts as they are currently expressed. There are open questions about 
what separates a product from a service (e.g. for the Internet of Things, where products 
and  services  interact),  the  scope  of  damage  covered  (currently  limited  to  material 
damage) and the notion of what constitutes a defect.  

it  comes 

to  new 

Specific  analytical  work  will  also  be  necessary  on  e.g.  pharmaceutical  products  due  to 
their complexity and refurbished products due to their altered nature, which could raise 
problems that set them apart from other categories of products. 

The  response  to  these  questions  will  need  additional  research  and  a  clear  response  to 
provide legal certainty to both producers and consumers. 

5.5.  EU added value 

The  Directive  is  an  integral  part  of  the  EU’s  single  market  rules.  Its  benefits  are 
uncontested.  The  Directive  provides  uniform  consumer  protection  by  serving  as  the 
safety  net  that  complements  EU  product  safety  legislation.  The  Directive  also  strikes  a 
sensitive  balance  between  innovation  and  protection  that  can  only  be  achieved  at  EU 
level to prevent single market fragmentation and distortion of competition. 

Repealing  the  Directive  would  lead  to  fragmentation  and  differing  levels  of  consumer 
protection,  as  national  courts  would  only  apply  national  rules,  contract  or  tort  law.  It 
should  be  noted,  however,  that  the  Directive  exists  alongside  national  instruments  and 
that there is therefore still room for differing national approaches. 

6.  CONCLUSION:  A  FOURTH  INDUSTRIAL  REVOLUTION  —  A  PRACTICAL  APPROACH 

TO LIABILITY 

The  problems  we  face  today  differ  to  some  extent  from  those  we  had  in  the  largely 
analogue  world  of  1985.  We  are  undergoing  another  technological  revolution.  The 
economy  and  products  themselves  are  increasingly  becoming  interconnected,  digital, 
autonomous and intelligent. We need a coherent and global response to these challenges, 
as outlined in the Artificial Intelligence Initiative27. 

The  Directive  has  until  now  covered  a  broad  range  of  products  and  technological 
developments. In principle, it is a useful tool for protecting injured persons and ensuring 
competition in the single market, by harmonising rules for injured persons and businesses 
in  the  aspects  that  it  covers.  It  is  an  area  where  EU  level  rules  provide  a  clear  added 
value. Having EU level rules for product liability is uncontested. 

This does not mean that the Directive is perfect. 

Its  effectiveness  is  hampered  by  concepts  (such  as  ‘product’,  ‘producer’,  ‘defect’, 
‘damage’,  or  the  burden  of  proof)  that  could  be  more  effective  in  practice.  As  the 
evaluation  has  also  shown,  there  are  cases  where  costs  are  not  equally  distributed 
between  consumers  and  producers.  This  is  especially  true  when  the  burden  of  proof  is 

27   Commission  Communication,  'Maximising  the  Benefits  of  Artificial  Intelligence  for  Europe', 

(COM(2018)237). 

8 

 
                                                 
complex, as may be the case with some emerging digital technologies or pharmaceutical 
products. 

To  remain  relevant  for  the  future,  the  Directive  would  benefit  from  clarification  to 
address  such  issues.  The  Directive  covers  a  broad  range  of  products  and  possible 
scenarios. Guidance can help to make these concepts more effective and highlight their 
continued relevance. 

Our  objective  is  to  continue  ensuring  a  fair  balance  of  the  interests  of  consumers  and 
producers for all products: 

Some  of  the  concepts  that  were  clear-cut  in  1985,  such  as  ‘product’  and  ‘producer’  or 
‘defect’ and ‘damage’ are less so today. Industry is increasingly integrated into dispersed 
multi-actor  and  global  value  chains  with  strong  service  components28.  Products  can 
increasingly  be  changed,  adapted  and  refurbished  beyond  the  producer’s  control.  They 
will  also  have  increasing  degrees  of  autonomy.  Emerging  business  models  disrupt 
traditional markets. The impact of these developments on product liability needs further 
reflection. At the end of the day, a producer is and needs to be responsible for the product 
it puts into circulation, while  injured persons need  to be able to prove that damage has 
been  caused  by  a  defect.  Both  producers  and  consumers  need  to  know  what  to  expect 
from products in terms of safety through a clear safety framework. 

Conversely,  the  development  of  a  strong  single  market  in  cybersecurity  products  and 
services will be hampered by problems over the attribution of damage for businesses and 
supply chains and failure to address these issues, as highlighted by the Commission in its 
Communication  on  ‘Resilience,  Deterrence  and  Defence:  Building  strong  cybersecurity 
for the EU’29. Again, consumers and businesses need to be aware of the security levels 
they can expect, and they need to know who to turn to if a failing in cybersecurity leads 
to material damage. 

Recent large-scale cross-border issues affecting many consumers across the EU, such as 
the  ‘Dieselgate’  scandal,  have  had  a  negative  impact  on  consumer  trust  in  the  single 
market.  In  its  ‘New  Deal  for  Consumers’,  the  Commission  proposes  —  among  other 
measures  —  to  modernise  redress  systems  and  make  it  easier  for  consumers  to  obtain 
their rights30. To make sure that the single market lives up to its full potential we need to 
reassure consumers that their rights will be respected 

Other wider aspects require similar attention. This is particularly relevant in the context 
of  a  more  sustainable  economy  in  which  products  are  refurbished,  patched  and  reused. 
Who  will  be  the  manufacturer  of  such  products,  e.g.  in  the  case  of  repair,  reuse  and 
refurbishment?  Also,  is  the  fact  that  all  preliminary  rulings  of  the  Court  of  Justice 
concerned  pharmaceutical  and  medical  devices  indicative  of  specific  characteristics  in 
this sector? 

The Commission has launched an expert group on liability to explore the effect of these 
developments  in  detail.  The  group  has  two  configurations.  One  is  composed  of 
representatives from Member States, industry, consumer organisations, civil society and 
academia:  this  group  will  assist  the  Commission  in  interpreting,  applying  and  possibly 
updating the Directive, including in light of developments in EU and national case-law, 

28  
29  
30  

Another aspect to be taken into account are direct online sales from third countries. 
COM(2017)450. 
COM(2018)183, COM(2018)184, COM(2018)185. 
9 

 
                                                 
the  implications  of  new  and  emerging  technologies  and  any  other  development  in  the 
field  of  product  liability.  The  expert  group’s  other  configuration,  composed  solely  of 
independent academic experts and practitioners, will assess whether the overall liability 
regime  is  adequate  to  facilitate  the uptake  of  new  technologies  by  fostering  investment 
stability and consumer trust31. 

As the Commission, we aim to put in place a positive and reliable framework for product 
liability  that  fosters  innovation,  jobs  and  growth  while  protecting  consumers  and  the 
safety of the general public. We will issue guidance on the Directive as well as a report 
on  the  broader  implications  for,  and  potential  gaps  in  and  orientations  for,  the  liability 
and safety frameworks for AI, Internet of Things and robotics in mid-2019. If necessary, 
the  Commission  will  update  certain  aspects  of  the  Directive,  such  as  the  concepts  of 
‘defect’,  ‘damage’,  ‘product’  and  ‘producer’.  However,  the  overall  principle  of  strict 
liability will remain intact. 

A  coherent,  technology-neutral  safety  framework  should  prevent  accidents  as  far  as 
possible. However, when accidents do happen, our liability framework should ensure that 
those who suffer injury are compensated. 

31  

The  Staff  working  Document  on  Liability  for  emerging  digital  technologies  (SWD(2018)137) 
already highlights some of the issues to be discussed by this configuration. 

10