EU product liability rules start covering software on 9 December, and Bill Gurley says the US should follow
What's happening? From 9 December 2026 the EU's revised Product Liability Directive (Directive (EU) 2024/2853) applies to products placed on the market or put into service from that date, and it explicitly treats software, including apps and AI systems, as a product. Anyone harmed by a defective product can claim compensation by proving the defect and the causal link to the damage, without having to show the manufacturer was at fault. Member states must transpose the directive into national law by the same date, according to the EUR-Lex summary.
What changes for software makers? Manufacturers are liable for defects that appear after a software update or upgrade carried out under their control, and for defects that emerge through an AI system's continuous learning while it remains under their control. Digital services that a product needs to function are also covered. Compensable damage includes death or personal injury (including medically recognised harm to psychological health), damage to property, and destruction or corruption of data not used for professional purposes. Liability runs for 10 years after a product is placed on the market, or 25 years for latent injuries, and both sides can ask courts for access to evidence. Free and open-source software developed or supplied outside a commercial activity is excluded.
The case for copying it: Bill GurleyDealroom has a profile for this one. Try Dealroom →, the venture investor known for backing Uber and Zillow, wrote on X that the US "should do the same thing," pointing to a recent nationwide flight stoppage he blamed on software and what he called "reckless hacking" by leading LLM companies. "The creators of the software need to recognize the financial impact that is possible. Which is huge," he wrote. The EU presents the update as better protection for victims and greater legal certainty for businesses.
The case against: During the negotiations the Developers Alliance, which represents software developers, warned that strict no-fault liability for all software risks undue legal exposure and higher insurance costs for developers and, ultimately, higher prices for consumers. It argued that "there is no such thing as a 'bug-free' code," that liability should be limited to defects affecting safety, and that open-source contributors not making a profit should not be treated as manufacturers. Some of those concerns, such as the open-source carve-out, were reflected in the final text.
Sources: EUR-Lex summary
Directive (EU) 2024/2853
EU Retail Platform
Developers Alliance
Bill Gurley on X
