On the afternoon of the 30th, an amendment to the Act on Product Liability was passed at the 4th plenary session of the 350th National Assembly (extraordinary session) held at the National Assembly in Yeouido, Seoul. 2017.3.30 

Table of Contents

1. Software is also a product.

2. Public Systems and Strict Liability

3. Citizen Petition: Product Liability Act Amendment Proposed by Hanmiilbo

4. Consumer Rights in the Digital Age

5. Legislative Action Guide

The Product Liability Act Must Be Amended for the Digital Responsibility Era

"Invisible Defects" Are the Most Dangerous

By 2025, all citizens of South Korea will be living within digital systems. Whether they receive welfare benefits, their medical records, and even administrative dispositions are mostly processed according to automated systems and artificial intelligence algorithms. But what if errors occur in these systems? Or what if they operate in a way that is disadvantageous to specific groups?

The current 「Product Liability Act」 fails to address this. The law, bearing the same name, defines only physical 'movable property' as a product. In other words, digital-based systems that critically affect citizens' lives are not recognized as products, and legal responsibility is rarely incurred.

A System Where Victims Must "Prove" to Receive Relief

The Product Liability Act is designed so that manufacturers bear strict liability if certain conditions are met, without consumers having to prove defects. However, even this is not applied to software and algorithms, where most damages occur, by limiting the scope of "products" to physical goods.

For example, if an automated welfare screening algorithm omits citizens under certain conditions, or if resident registration is incorrectly canceled due to an error in a public system, the victim must spend considerable time and money to directly prove the system's error. While practically impossible, the current law places this burden entirely on the victim.

Europe Is Already Changing: "Invisible Products" Are Also Considered Products

In February 2024, the EU officially defined digital products and AI systems as products through the new "Product Liability Directive (Directive 2024/2853)". The core of the amendment includes: △ including products provided in digital format (software, apps, AI systems, etc.) in the definition of a product △ considering update errors, cybersecurity vulnerabilities, and training data errors as defects △ introducing a reversal of the burden of proof where victims only need to prove damages, and companies must prove the existence of a defect.

The EU has clearly stated: "If software causes a defect that harms life or property, it must be held liable just like a traditional product."

In the United States, some states such as California, Illinois, and New York permit product liability or similar class action lawsuits for cases like social media algorithm addiction and discrimination in automated loan applications. While not yet legislated at the federal level, digital platform companies are already facing hundreds of damage claims.

South Korea's Product Liability Act Has Not Undergone Substantive Revision Since 2000

South Korea's 「Product Liability Act」 has not undergone any substantive revision since its enactment in 2000. The definition of 'product,' created based on standards from 25 years ago, remains limited to physical movable property, leaving digital-based goods and services that have developed since then in a legal blind spot.

Although an amendment to the Product Liability Act was passed in March 2017, introducing punitive damages and provisions to ease the burden of proof, it did not expand the definition of a product.

In 2022, the Fair Trade Commission commissioned a research service on whether software could be considered a product, but the conclusion was inconclusive. This was due to the legislative bodies not fully perceiving the urgency of the issue.

Hanmiilbo's Legislative Proposal: Amendment to the Product Liability Act

Instead of creating a new law, Hanmiilbo proposes amending the existing Product Liability Act. The specific directions are: △ explicitly include digital intangible goods (software, AI, systems, etc.) in the definition of 'product' △ extend the principle of presumed defect to digital products △ shift the burden of proof from the victim to the system provider △ codify security vulnerabilities, algorithmic bias, and update failures as defects.

Through such amendments, consumers will have a legal basis to combat system errors or biases that they cannot comprehend.

It's Time for the Law to Catch Up with Technology

Technology makes human life convenient, but law exists to protect humans. Now, technology may be intangible, but its responsibility must be concrete. If sentences written by AI, automated judgments, and system errors can shake our society, then human society must be able to hold them accountable for all their operations.

Software is also a product. It is time to engrave that common sense into the law.

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Next Episode Preview ② Public Systems and Strict Liability… Digital Protection for the People Is Needed