Germany has moved first: the federal government’s modernisation of product‑liability law — implementing the EU’s new Product Liability Directive — was promulgated in the Federal Law Gazette on 27 October 2026, while several other member states, including Austria, had not published draft transposition bills as of October 2026. That split matters to drivers, fleet managers, OEMs and suppliers because it rewrites who can be sued, for what, and for how long when connected cars, software updates or linked services cause harm.
What Germany changed — software, updates and services
The German bill (Gesetz zur Modernisierung des Produkthaftungsrechts) implements Directive (EU) 2024/2853 and reframes product liability for the digital age: software (including AI systems) is explicitly treated as a product regardless of how it is provided; damages now include destruction or loss of non‑commercial data; and liability can arise from faulty software updates or the absence of safety‑critical updates. The Bundestag explanatory text stresses that manufacturers who retain post‑market control via updates or connected services may be liable for harms caused thereafter.
The German text also widens the set of potentially liable actors beyond traditional manufacturers to include importers, fulfilment service providers and online platforms where relevant, and lowers certain proof thresholds for claimants. These measures mirror the EU directive’s aim to cover modern value chains and digital products.
Austria’s pace — preparatory work but no draft
By contrast, Austria had not published a draft transposition law as of October 2026 and is listed among member states “in progress” or in preparatory stages in recent transposition trackers and legal briefings. With the EU transposition deadline set for 9 December 2026, that leaves Vienna little time to turn preparatory work into legislation.
Practical consequences of the delay are immediate: Austrian courts and regulators will still apply existing national rules to incidents until transposition is complete, but uncertainty for suppliers, software houses and fleet operators about future liability rules complicates contracts, insurance and cross‑border after‑sales operations. Legal commentators warn that delayed transposition raises transitional risks for manufacturers and service providers operating across DE/AT borders.
What this means for the market
First, manufacturers and Tier‑1 suppliers must sharpen contract and warranty language: Germany’s law already signals stricter exposure for faulty code, missing updates or unsafe connected services, and firms can expect wider joint‑and‑several liability claims along supply chains. Insurers and risk managers face new underwriting questions because software faults, learning AI behaviour and service outages are now squarely within product‑liability scope.
Second, cross‑border fleet operators and dealers will need harmonised compliance processes: vehicles sold or serviced in Austria but subject to German rules for liability could trigger conflicting obligations unless Vienna transposes the directive promptly. Legal advisers note that discovery and targeted disclosure mechanisms introduced by the PLD will also increase the cost and complexity of litigation.
Finally, for drivers and buyers the change can increase protection: where claims succeed, victims of crashes caused by defective software or connected‑service failures will have clearer routes to compensation and newer categories of recoverable damage (including certain data losses). Yet the practical effect will depend on how Austria frames its transposition and on the contractual risk‑allocation practices of OEMs and platforms.
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Sources: EUR‑Lex (EU Product Liability Directive), German Bundestag (Gesetzentwurf), Faegre Drinker, Bundesgesetzblatt (BGBl.), Reed Smith
