EU's Revised Product Liability Directive Raises Stakes for U.S. Exporters

By Grace Kim

The European Union's revised Product Liability Directive, published October 23, 2026, lets courts presume a product is defective, that it caused harm, or both — particularly when the product involves technical or scientific complexity. The U.S. Chamber of Commerce calls it the most significant shift in Europe's liability framework in decades, and warns that American exporters will bear the cost.

The logic is blunt: the more innovative your product, the more legal exposure you face. The Chamber argues this approach invites meritless litigation against advanced U.S. exporters across every sector of the economy.

What does the new Directive actually change?

For decades, European civil law required claimants to prove defect, damage and causation. The revised PLD upends that. Courts can now presume defectiveness or causation when a product involves technical or scientific complexity.

That reversal hits hardest where the U.S. is strongest — advanced manufacturing, software, AI systems, digital manufacturing files, and product-related digital services, all of which fall under the Directive's expanded coverage.

The takeaway: innovation itself has become a litigation trigger under the new EU rules.

How do the disclosure rules threaten U.S. intellectual property?

The Directive carries broad disclosure obligations. Companies could be forced to hand over sensitive technical files, source code, algorithms, design specifications, testing records and regulatory submissions early in litigation — before a case has been substantiated.

The PLD acknowledges the need to protect trade secrets and confidential information. But it leaves the safeguards to national procedures that vary substantially across EU Member States. The Chamber says that leaves American companies facing inconsistent protections for valuable intellectual property, plus heightened risks of competitive harm, cybersecurity vulnerabilities, and forum shopping by claimants.

Why does the patchwork of national rules matter?

Inconsistent national rules on disclosure, evidentiary presumptions, recoverable damages and liability allocation will likely produce unpredictable court outcomes, the Chamber warns. It will also encourage claimants to file in the most plaintiff-friendly jurisdictions — Europe's version of venue shopping.

For small and medium-sized U.S. exporters, the consequences are concrete: litigation, compliance and insurance costs that drag on innovation, disrupt supply chains, and delay or limit market access for new U.S. products and technologies.

In plain words: the same product can carry wildly different legal risk depending on which EU court hears the case.

How far does the extraterritorial reach extend?

This is the part the Chamber flags as most concerning. Upstream U.S. manufacturers, component and raw-material suppliers, software developers, digital-service providers and distributors could all 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 amplifies that risk. U.S. companies could 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 is the Chamber asking Washington to do?

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 consistent with foundational principles of civil law. Its specific asks:

• 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 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 misuse of American intellectual property
• Ensure liability follows meaningful control and a clear EU market nexus, so 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

What happens next?

The Chamber frames the revised PLD as the latest policy move that makes the EU a less attractive place to do business. At a time when growth and competitiveness should be paramount priorities, it argues, Europe should avoid liability rules that encourage questionable litigation, weaken legal predictability and fragment the single market.

The ball now sits in Washington's court: the Chamber wants the U.S. government to press Brussels to implement the Directive in a way that respects due process, protects American innovation and preserves confidence in the rule of law — before the first wave of cases tests how far European courts will actually stretch the new presumptions.