Published
October 23, 2026
The European Union's revised Product Liability Directive (PLD) represents the most significant shift in Europe's liability framework in decades — and U.S. companies exporting to the EU should take notice.
A Fundamental Shift in Legal Standards
The revised PLD upends longstanding legal principles by allowing courts to presume that a product is defective, that it caused harm, or in some cases, both — particularly when a product involves technical or scientific complexity. In other words, the more innovative your product, the more legal exposure you may face. This approach threatens to invite meritless litigation against a wide range of advanced U.S. exporters across every sector of the economy.
Sweeping Disclosure Requirements Put IP at Risk
The Directive's broad disclosure obligations could force companies to hand over sensitive technical files, source code, algorithms, design specifications, testing records, regulatory submissions, and other proprietary information early in litigation. While the PLD acknowledges the need to protect trade secrets and confidential information, it leaves important safeguards to national procedures that vary substantially across EU Member States. American companies therefore face inconsistent protections for valuable intellectual property, along with heightened risks of competitive harm, cybersecurity vulnerabilities, and forum shopping by claimants.
Inconsistent Rules Across Member States Create a Patchwork of Risk
Inconsistent national rules on disclosure, evidentiary presumptions, recoverable damages, and liability allocation will likely produce unpredictable court outcomes and encourage claimants to file in the most plaintiff-friendly jurisdictions. For U.S. exporters — especially small and medium-sized businesses — the resulting litigation, compliance, and insurance costs will serve as a drag on innovation, disrupt supply chains, and delay or limit market access for new U.S. products and technologies.
Extraterritorial Reach Extends Far Up the Supply Chain
Perhaps most concerning is the PLD's extraterritorial scope. Upstream U.S. manufacturers, component and raw-material suppliers, software developers, digital-service providers, and distributors could be drawn into EU litigation even if they don't market directly to the EU, have no direct relationship with the claimant, and had no control over the finished product. The Directive's expanded coverage of software, AI systems, digital manufacturing files, and product-related digital services only amplifies the risk that U.S. companies will face liability in European courts without a clear connection to the EU market or meaningful control over the product alleged to have caused harm.
What Needs to Happen
The Chamber urges the U.S. Government to raise these concerns directly with the European Commission and EU Member States, and to seek clear written guidance ensuring proportionate implementation that is consistent with existing foundational principles of civil law. Guidance is needed to promote predictable legal standards, safeguard due process, and prevent U.S. companies from being subjected to arbitrary or inconsistent treatment across national courts. Specifically, we are calling for measures that:
- Preserve the claimant's burden of proof — defect, damage, and causation should be established through evidence, not automatic presumptions triggered by product complexity
- Apply evidentiary presumptions narrowly — with robust judicial scrutiny of whether application of the Directive’s specified conditions are supported by the facts of the individual case
- Give appropriate weight to regulatory compliance — including adherence to EU and national safety standards, product testing, and post-market oversight
- Limit disclosure to what is necessary and proportionate — with robust, enforceable protections for trade secrets, confidential business information, personal data, and cybersecurity-sensitive materials in place before disclosure is ordered, including safeguards against the misuse of American intellectual property
- Ensure liability follows meaningful control and a clear EU market nexus — so that upstream U.S. suppliers and service providers are not hauled into EU courts when they neither targeted the EU market nor controlled the finished product
The revised PLD is the latest policy move that makes the European Union a less attractive place to do business. At a time when growth and competitiveness should be paramount priorities, Europe should avoid liability rules that encourage questionable litigation, weaken legal predictability, and fragment the single market. Washington should press Brussels to ensure that the Directive is implemented in a manner that respects due process, protects American innovation, and preserves confidence in the rule of law.
