Digital content and services are purchased by millions of European consumers every day. Digital content products include data that is produced and supplied in digital form such as computer programmes, applications and e-books, as well as digital entertainment such as music, movies and games. Digital services include any services that allow users to create, process, store or access data in digital form, such as cloud services and services that allow data sharing through social media platforms or live streaming events.
Before the Digital Content Directive was adopted, the existing EU legislation regarding sales contracts – the Sale of Goods Directive – was limited to tangible goods and to safeguard the consumers’ right for clear information and to protect them from unfair contract terms and unfair commercial practices. The new directive lays down a common set of rules regarding the conformity of the digital content or digital service with the contract of sale.
Traders are now obliged to supply the purchased digital content or service without undue delay to consumers and as agreed in the sales contract. Sellers must also ensure that consumers are informed of and supplied with updates that are necessary to keep the digital content or service in conformity with the contract of sale for a period of time. This requirement also applies to contracts covering the continuous supply of digital content or services.
In case a non-conformity exists at the time of supply, or becomes apparent within a period of not less than two years from the start of the supply, the trader is liable to provide a free remedy. In situations where the sales contract provides for a continuous supply over a period of time, the trader remains liable for any non-conformity throughout the duration of the contract.
In situations where the trader is unable to provide a suitable free remedy within a reasonable time, consumers may claim a price reduction or cancel the contract and request a full refund. However, the right to a full refund does not apply when the non-conformity or defect does not impair the functionality, interoperability or ‘other main performance’ features of the digital content.
Any reimbursements owed to consumers by traders due to non-conformity with the sales contract are to be carried out without undue delay, and in any case not later than 14 days from the date when the trader receives the consumers’ request for a price reduction or termination of contract.
The new directive also protects consumers who purchase subscriptions to digital content, such as subscriptions to watch films or live sport events- Odette Vella
The right to terminate the sales contract equally applies to consumers who provide personal data in exchange for the supply of the digital content or service. When this is the case, traders have the legal responsibility to provide consumers with the technical means to retrieve at no cost the data provided or generated, if that data has been retained by the trader.
The directive also states that while it is the consumer’s responsibility to provide evidence that the digital content or service does not conform with the sales contract, during the first year from the date of purchase, the burden of proof that the defect did not exist at the time of sale is on the trader. Regarding sales contracts that provide for continuous supply of digital content or services, in case of a defect, the burden of proof remains with the seller throughout the duration of the contract.
The new directive also protects consumers who purchase subscriptions to digital content, such as subscriptions to watch films or live sport events. The terms and conditions of these subscriptions may only be modified if such a modification is allowed in the original contract. Consumers must be informed about the change in content in advance of such changes and must be allowed to terminate the contract within at least 30 days of notice.
The provisions of this new legislation exclude goods with digital elements, such as smart goods, or the digital aspects embedded in such goods if they are provided with the goods under a sales contract. These goods are, however, covered by the new Sale of Goods Directive.
Other digital sales contracts that are not regulated by these new rules include: a) the provision of services other than digital services; b) electronic communication services; c) gambling services; d) financial services; e) healthcare; f) software offered by the trader under a free and open-source licence where the consumer does not pay a price and the personal data provided by the consumer are exclusively processed by the trader for the purpose of improving the security, compatibility or interoperability of that specific software; g) supply of digital content where the digital content is made available to the public other than by signal transmission as part of a performance or event, such as digital cinematographic projections; and h) digital content provided in accordance with the Re-use of Public Sector Information Act.
The new rules were published by means of a legal notice on October 29, 2021 and will come into force on January 1, 2022.
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