Autor

Debbie Heywood

Senior Professional Support Lawyer

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Autor

Debbie Heywood

Senior Professional Support Lawyer

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9. April 2021

Download: Consumer protection and product liability – what's new? – 1 von 5 Insights

How will the EU's regime on the supply of digital content and digital services to consumers differ from the UK's?

  • In-depth analysis

Incoming changes across the EU

The UK reformed its consumer protection rules, dealing with the supply of digital content and services (whether digital or not) under the Consumer Rights Act 2015 (CRA).

Coming slightly later to the party, as part of its Digital Single Market project, the EU passed a number of consumer protection Directives in 2019, including one on contracts for the supply of digital content and digital services (Digital Content Directive).

The Digital Content Directive must be transposed by 1 July 2021 and applied by 1 January 2022. The provisions will apply to all digital content and services supplied after 1 January 2022 save that the provisions on modification and right of redress will only apply to contracts concluded after that date.

Expand for a summary of the Digital Content and Digital Services Directive

What will the changes mean for UK businesses?

The Digital Content Directive did not have to be transposed before the end of the Brexit transition period and will not apply in the UK. UK businesses supplying to consumers in the EU will, however, need to understand the new rules and how they differ from the regime in the UK.

In some ways, the new rules should make it easier for UK businesses. A historical lack of harmonisation in parts of the consumer protection framework means that businesses are used to having to take local laws into account. As the new Directive is a maximum harmonisation measure, Member States will not be able to enact lesser or higher protections unless the Directive explicitly allows them to, although they are still free to regulate general aspects of contract law (like formation). Contractual attempts to vary or derogate will not be binding on the consumer.

This should lead to a more uniform approach across the EU which will be helpful to UK businesses as well as to EU ones.

How will the EU regime differ from the UK one? 

There are a number of key differences between the incoming EU regime and the UK's existing one.

Digital services – a new category of contract

While the CRA separates consumer contracts into contracts for the supply of goods, services, and digital content, the Digital Content Directive introduces the concept of 'digital' services as distinct from other services and applies mostly the same rules to the supply of digital content and digital services.

Digital services include SaaS so sharing of content, cloud services including hosting and supply of content, and social media.

Personal data as consideration

The provisions relating to digital content under the CRA only apply to paid-for rather than free content (with the exception of where defective content which is free causes damage to a device or other digital content).

The EU rules treat personal data (other than data required by the trader to supply the digital content or services) as consideration, so as a form of payment equivalent to money. This means that the rights and remedies available under the Directive apply to digital content and services 'paid for' with personal data.

Goods with digital elements

Goods which rely on digital elements to work are not within scope of the Digital Content Directive. Despite their digital elements, they are treated as goods and consumer rights and remedies are dealt with under the Sale of Goods Directive.

The CRA treats mixed contracts slightly differently although the end result is similar. Technically, there are different remedies for non-conforming contracts for the sale of goods as against the sale of digital content. However, where digital content supplied with goods does not conform to the contract, the goods themselves will be treated as not conforming and goods remedies for non-compliance will be available.

When to supply

The CRA does not stipulate a time within which digital content must be supplied. Services (which under the CRA includes digital services), must be supplied within a reasonable time where the contract is silent as to time of supply.

The Digital Content Directive requires digital content and services to be supplied without undue delay after the contract is concluded unless otherwise agreed.

Fitness for purpose

The CRA implies a statutory term that digital content will be fit for a particular purpose. As digital services are treated separately, there is no equivalent statutory term for them. Instead, services must be performed with reasonable skill and care and in compliance with pre-contractual information.

Under the CRA, fitness for particular purpose means any particular purpose for which the consumer informs the trader (expressly or by implication) that they are entering into the contract. The contract will contain an implied term that the digital content is reasonably fit for that purpose, whether or not it is a purpose for which the content is normally supplied and whether or not the trader accepts the purpose. A contract may also be treated as making provision about fitness of the digital content for a particular purpose by custom. 

Under the Digital Content Directive, the digital content and/or services must be fit for any particular purpose the consumer makes known to the trader and which the trader accepts prior to conclusion of the contract, and for any purpose for which that content or service is normally supplied. General fitness for purpose can be assessable against EU and national technical standards or industry specific codes.

Defects

Under the CRA, a trader is not liable for any defect in digital content which was expressly drawn to the attention of the consumer before conclusion of the contract. Under the Directive, traders must get express and separate acceptance to any defects or variations from the quality requirements.

Updates

Unlike the CRA, the Digital Content Directive requires traders to update digital content in accordance with any contractual requirements, and as needed to keep the digital content and/or services in conformity. This includes supplying security updates. Updates must be supplied throughout a continuous supply period and, in relation to a one-off supply, for as long as the consumer might reasonably expect.

The CRA allows updates to digital content to be supplied to add improvements or new features provided the digital content continues to match the description and any pre-contractual information of it given to the consumer (unless the consumer has specifically agreed otherwise).

Integration

While the CRA makes the trader liable for any defect in digital content which causes damage to devices or other digital content, it does not include integration requirements.

The Digital Content Directive, however, makes the trader responsible for correct integration of digital content and services where the trader carries out the integration or it is under the trader's control or in accordance with their instructions. Instructions must be sufficiently clear and complete to allow the average consumer to carry them out.

Burden of proof

Under the CRA, the burden of proof is on the consumer to demonstrate that digital content or services were defective or not in conformity. If they prove a fault within the first six months of supply, the defect will be presumed to have been present since the supply was made.

Under the Digital Content Directive, the burden of proof is on the trader to show that the digital content or digital service was supplied in conformity. Where digital content is supplied as an individual supply there will be a presumption that any defect was present on supply for a period of one year. Member States must allow claims for a period of at least two years. 

The exception to the consumer's reliance on a presumption of non-conformity is where the trader proves that the consumer's digital environment was incompatible with clearly communicated technical requirements of the digital content or services. 

For digital content or services provided on a continuous basis, there will be a presumption that the defect was present for the duration of the supply period and claims must be allowed for at least the duration of the supply period although Member States can allow longer.

Trader obligations on termination

The Digital Content Directive requires traders to make digital content (other than personal data) provided or created by the consumer using the digital content or services, available to the consumer on request following termination. The CRA does not contain equivalent requirements.

Consumer obligations on termination

The Digital Content Directive contains an express obligation on consumers to stop using digital content or services after termination and to return any tangible media on which the content or service was supplied to the trader on request. The CRA does not contain equivalent provisions.

Modifications

The Digital Content Directive contains provisions allowing the trader to modify digital content under certain conditions which include giving the consumer the right to terminate the contract within 30 days of notification of a pending modification. The termination right is lost if the consumer can continue to use the digital content in conformity without accepting the modification. Again, this is not dealt with under the CRA.

Remedies for failure to supply and to conform

The Digital Content Directive remedies are similar to those under the CRA but whereas the consumer has a right to terminate the contract under the Directive if repair or replacement is impossible or can't be carried out within a reasonable time and without significant inconvenience to the consumer, under the CRA, this is a right to a price reduction, albeit to the full contract price.

Under the CRA, the consumer is also entitled to a refund (rather than to terminate) where the trader does not have the right to supply digital content and the consumer has the right to repair of any digital content or device damaged by defective digital content supplied by the trader.

Other changes to the EU's consumer protection regime

The Digital Content Directive is one of three incoming EU Directives on consumer protection. You may also be interested in our articles on the Sale of Goods Directive, and the Omnibus Directive.

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