The EU's new Product Liability Directive, effective December 2026, expands the scope of compensable damages to include software and data corruption while removing financial liability caps. This regulatory shift significantly increases litigation risk for technology providers, including those in the streaming and digital health sectors, by introducing broader evidentiary presumptions and extended limitation periods.
The inclusion of software and data corruption under strict liability creates a new litigation front for streaming platforms and app developers. Beyond physical hardware, providers now face unlimited financial exposure if a software update causes data loss or if algorithmic content is linked to medically certified psychological harm. This shift forces a reassessment of insurance coverage and technical auditing, as the removal of the €500 de minimis threshold enables mass-market consumer claims for even minor property damage. As the EU implements these rules, the UK is conducting a parallel review of its Consumer Protection Act, suggesting a broader European trend toward heightened digital accountability. Watch for insurers to adjust premiums and reporting requirements for software-based products ahead of the December 2026 deadline.
This regulatory expansion follows the EU AI Act enforcement which has already begun to reshape compliance expectations for digital service providers across the region.
The EU has adopted a new Product Liability Directive, effective December 2026, which reclassifies software as a product and removes financial liability caps. This shift introduces strict liability for data corruption and psychological harm, significantly increasing litigation risks for digital service providers and forcing a reassessment of insurance and technical auditing.
The new directive is scheduled to become effective in December 2026.
Compensable damages now include non-professional data corruption and medically certified psychological health impairments, in addition to traditional personal injury and property damage.
No, the new directive completely removes the previous financial liability caps, which were previously set at a minimum of €70 million for personal injury.
The limitation period for latent injuries has been extended from the previous 10-year limit to a 25-year longstop.
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