EC overhaul of consumer protection law

Directives on the sale of goods and the sale of digital content and services to consumers, near the end of a lengthy legislative process.

What's the issue?

As the Junker presidency of the European Commission nears its end, the ambitious Digital Single Market project has come a surprisingly long way.

Two consumer protection proposals which have stumbled since their original publication in 2015 are now nearing the final stages.

What's the development?

The European Parliament has adopted its first reading positions on the draft consumer protection proposals under the Digital Single Market initiative, namely:

• The Digital Content and Digital Services Directive
• The Sale of Goods Directive

The adopted versions take account of the trilogues concluded at the end of January 2019. The Council is expected to adopt the Directives at its next meeting. There will be up to a two and a half year implementation period following publication in the Official Journal.

The Directives introduce new categories of contracts for digital services and goods with digital elements. This is to ensure that smart goods and ongoing digital supplies are covered.

One of the most interesting aspects of the Digital Content and Digital Services Directive is that it applies not only to paid for content, but to content which is supplied in exchange for personal data, other than personal data required in order to supply the content or to fulfil the trader's legal obligations.

This is a recognition of the increasing value of personal data to businesses and a move to protect consumers where they receive ostensibly free digital content and services while in reality providing something of value to the trader.

What does this mean for you?

Both Directives diverge from the UK's Consumer Rights Act 2013. It is currently unclear to what extent, if any, changes will be made to UK law, or whether the legislation will be passed before the UK exits the EU.

The changes will be relevant to any business trading with consumers in the EU.

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The draft Digital Content and Digital Services Directive provides (among other things) that:

• A consumer is entitled to a price reduction or refund within 14 days if it is not possible to fix a defect within a reasonable time.
• If a defect becomes apparent within one year of supply, it is presumed to have existed at the time of supply without the consumer needing to prove it (reversal of burden of proof). The burden of proof rests with the trader throughout the contract in cases of continuous supplies.
• One-off supplies must have a minimum two year guarantee period throughout the duration of the contract.
• In relation to subscriptions to digital content for a period of time, the trader may only modify the content if the contract permits it, the consumer is given reasonable advance notice, and can terminate the contract within 30 day of notice.
• Personal data is treated as equivalent to financial consideration unless it is required by the trader in order for it to supply the content or service, or to comply with a legal requirement.

The draft Sale of Goods Directive applies to distance and on-premises consumer contracts for the sale of goods. It covers rules on remedies, guarantee periods the burden of proof and traders' obligations and provides that:

• When a product is defective, the consumer will be able to choose between having it repaired or replaced free of charge.
• If the trader cannot fix the defect or repair it within a reasonable time or where the defect is serious, the consumer will be entitled to an immediate price reduction, or contract termination and refund.
• The trader will be liable for defects appearing within two years of receipt of the product by the consumer. Member States are able to increase this guarantee period.
• The burden of proof will be reversed for a one or two year period, during which time, the buyer will not need to prove that the good was faulty.