Expanding the definition of ‘product’: Legal implications of including software and AI under the New EU Product Liability Directive

After nearly four decades of reliance on the 1985 Product Liability Directive, the European Union undertook a major reform through the adoption of the New Product Liability Directive. The reform responds to the digital transformation and the circular economy by significantly expanding the scope of liability. Its most notable innovations include the broader definition of ‘product’ to encompass software, AI systems, and digital manufacturing files, the easing of claimants’ evidentiary burdens, and the introduction of new procedural mechanisms such as disclosure of evidence and presumptions of defectiveness and causation. From the claimant’s perspective, the New Directive strengthens access to justice by mitigating information asymmetries and lowering barriers to initiating proceedings. It also removes outdated thresholds that previously restricted compensation. From the other standpoint, however, these developments materially increase litigation exposure, extend liability to new categories of actors, and create significant legal uncertainties in assessing defectiveness and causation within complex digital systems. This paper critically examines the New Directive’s legal architecture, arguing that while it advances consumer protection, it simultaneously risks deterring innovation and paves the path for mass litigation. The analysis highlights how unresolved ambiguities may generate fragmented jurisprudence and long-tail liabilities, underscoring the need for greater doctrinal clarity to balance fairness with innovation.