How Will Companies Assure the Conformity of Artificial Intelligence of Things Devices With Their Sales Contract and Consumers' Reasonable Expectations Under the New Eu Sales of Goods Directive?

• Jurisdiction: European Union
• Publication year: 2023
• Citation: Vol. 6 No. 2

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Anna Sophia Oberschelp de Meneses and Kristof Van Quathem ^*

This article discusses the challenges that companies may face under the new EU Sales of Goods Directive (Directive 2019/771) when selling connected devices with an artificial intelligence component—also called "Artificial Intelligence of Things" (AIoT)—to consumers. For example, they will have to demonstrate the devices' conformity with their sales contract and consumers' reasonable expectations. It also discusses how companies can address these challenges by appropriately informing consumers about the AIoT device's functionalities and dynamic nature.

On May 20, 2019, the European Union adopted a new Sales of Goods Directive (Directive), which requires entities selling goods to EU consumers to ensure that these goods conform with subjective and objective requirements set out in the Directive. Because this legislation was adopted in the form of a directive, it did not apply directly in all EU Member States. Instead, Member States were given until July 1, 2021 to implement it into their national legal frameworks. The national (implementing) laws started applying on January 1, 2022.

The Directive applies to "goods," which are broadly defined as "any tangible movable items." In addition, it also applies to digital content or digital services incorporated or interconnected with these goods that are necessary for the goods to perform their functions. ¹ As such, the directive will also apply to connected devices with an artificial intelligence component—also called "Artificial Intelligence of Things" (AIoT) devices.

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What Is Artificial Intelligence of Things?

The concept of "Artificial Intelligence of Things" has emerged in the past three years. It combines the concepts of "artificial intelligence"—systems that display intelligent behavior by analyzing their environment and taking actions with some degree of autonomy to achieve specific goals—and "Internet of Things"—distributed network-connected physical objects that are capable of sensing or acting on their environment and able to communicate with each other, with other machines, or with computers. ² Forbes magazine defines AIoT as "devices that can analyze data and make decisions and act on that data without involvement by humans." ³

Examples of AIoT include self-driving cars, wearable devices, and home appliances that are connected to the Internet and include artificial intelligence systems. The home appliance producer Bosch, for example, offers a range of home appliances that it openly categorizes as being AIoT. ⁴

How Do the Sales of Goods Directives' Subjective and Objective Requirements Apply to AIoT?

Subjective Requirements

The Sales of Goods Directive requires that goods (in this case, AIoT devices) conform with the sales contract entered into between the seller and the consumer in relation to those goods. The Directive specifies that the goods must be:

1. Of the description, type, quantity and quality, and possess the functionality, compatibility, interoperability and other features, required by the sales contract;
2. Fit for any particular purpose for which the consumer requires them and which the consumer made known to the seller at the time of the conclusion of the sales contract, and in respect of which the seller has given acceptance;
3. Delivered with all accessories and instructions, including on installation, as

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