Balancing Consumer Protection and Tech Innovation
As the European Parliament gears up to finalize a legal framework addressing liability for artificial intelligence (AI) products, the debate intensifies between consumer groups and the tech lobby. With the AI Act set to take effect on August 1, the focus shifts to the AI Liability Directive, a proposal aimed at modernizing existing liability rules to encompass the unique challenges posed by AI systems.
The AI Liability Directive: Bridging the Gap
Proposed by the European Commission in 2022, the AI Liability Directive seeks to update liability regulations to cover harms caused by AI, ensuring consistent protection across the EU. However, progress stalled during the last parliamentary mandate, as lawmakers awaited the finalization of the AI Act. Now, with the AI Act established as the world’s first comprehensive regulation for high-risk AI systems, attention returns to the AI Liability Directive.
Key Provisions of the AI Act
- Risk Classification: AI systems categorized by risk levels—unacceptable, high-risk, limited risk, and minimal risk.
- Implementation Timeline: General AI rules apply one year after the Act’s entry into force; high-risk system obligations take effect in three years.
- Compliance Requirements: High-risk AI systems must undergo rigorous assessments, including risk management, transparency measures, and human oversight.
Legislative Champions and Critics
Axel Voss, the German MEP steering the AI Liability Directive through Parliament, emphasizes the need for a dedicated AI liability regime. “It would be better to have an AI liability regime in place,” Voss stated. However, the tech lobby, represented by organizations like CCIA Europe, argues that additional AI-specific liability rules could impose unnecessary regulatory burdens.
CCIA Europe’s Senior Policy Manager, Boniface de Champris, expressed concerns: “The introduction of additional AI liability rules is highly questionable and likely unnecessary.” Thomas Boué, Director General of Policy EMEA at BSA, The Software Alliance, echoed these sentiments, noting significant overlaps with the recently adopted Product Liability Directive (PLD).
Consumer Groups Demand Stronger Protections
Consumer advocates insist that current legal frameworks leave gaps in protection against AI-related harms. Agustín Reyna, Director-General of BEUC, described the AI Liability Directive as “the missing piece of the puzzle.”
Els Bruggeman, head of policy and enforcement at Euroconsumers, underscored the importance of making the Directive consumer-friendly. “We’d like legislators to go one step further and introduce a reversal of the burden of proof,” Bruggeman suggested. This would require consumers to prove only the damage and the involvement of an AI system, rather than demonstrating fault.

The Road Ahead: Legislative and Regulatory Challenges
Preliminary discussions among the 27 EU member states have begun at the working party level. However, significant progress is unlikely before the end of the year, with the AI Liability Directive not prioritized under Hungary’s chairmanship.
Consumer Group Priorities
- Proof Burden Reversal: Shifting the burden of proof from consumers to AI system providers.
- Inclusive Scope: Ensuring the Directive covers all types of automated decision-making and various forms of harm.
- Accessible Redress: Simplifying the process for consumers to seek redress for AI-related damages.
Tech Industry Concerns
- Regulatory Overlap: Avoiding duplicative regulations that could stifle innovation.
- Clarity and Predictability: Ensuring clear, predictable rules that do not unduly burden AI developers.
Striking the Right Balance
As the European Parliament navigates the complex terrain of AI liability, the challenge lies in balancing robust consumer protections with a regulatory environment conducive to innovation. The evolving legal landscape will require ongoing dialogue between lawmakers, consumer advocates, and the tech industry to create a framework that ensures safety, transparency, and accountability without hindering technological advancement.
The outcome of this legislative effort will have far-reaching implications, shaping the future of AI development and deployment across Europe and potentially setting a global standard for AI governance.