Adapting EU Liability Rules to the Digital Age and Artificial Intelligence: The European Commission’s 2021 Inception Impact Assessment

This chapter examines the European Commission’s 2021 Inception Impact Assessment (IIA) “Adapting liability rules to the digital age and circular economy”, which was published on 30 June 2021 and prompted by an evaluation of the Product Liability Directive (PLD). The 2021 IIA addressed shortcomings already identified in the evaluation of the PLD and the challenges that the emerging technologies present for the application of liability rules, which were described in detail in the Commission’s 2020 White Paper and the accompanying Report on Liability for AI, IoT and Robotics. According to the Commission, civil liability rules for AI should strike a balance between protecting citizens and promoting technological innovation. The Commission examined different policy options to achieve the initiative’s primary objectives. These objectives, alongside the overall goal of ensuring the proper functioning of the single market while providing for a high level of consumer/victim protection, are: (i) to modernise and adapt strict liability rules to the digital age and circular economy, taking account of the characteristics and risks of new technologies, including AI-equipped products and services; and (ii) to address unnecessary obstacles to obtaining compensation for damage, ensuring that injured parties are equally protected throughout the EU. This approach aims to foster consumer uptake of AI and other innovative technologies, build trust in innovative products and services, and strengthen confidence in justice systems.