Written by Rafał Mańko,
In December 2015, the European Commission proposed legislation that would grant consumers of digital content a set of uniform rights across the EU. The proposal is now before the European co-legislators – the Parliament and Council.
A growing online market
Contracts for the supply of digital content are concluded on a daily basis by millions of consumers across the globe. Consumers purchase or hire digital content increasingly often, not only whenever they purchase computer programs or mobile applications, but also when they access cultural and entertainment goods in digital formats, such as music, films, e-books or games. Also, consumers often acquire digital services, for instance when they use cloud computing services (for the storage, processing and use of data on remotely located servers accessed online) or social media platforms. In this context, the Commission, as part of its digital single market strategy, has put forward a proposal for a directive on contracts for supply of digital content to consumers.
European Commission proposal
Currently in the EU, only the United Kingdom has legislation specifically addressing contracts for supply of digital content. Some countries, such as Austria, Germany and the Netherlands, apply rules concerning ‘tangible world’ contracts, such as sale, services or rental contracts, to digital content. The Commission proposal intends to grant consumers of digital content a set of rights, which would be uniform across the EU. This approach, called ‘maximum harmonisation’, means however that individual Member States will not be allowed to provide for a higher level of consumer protection in the area covered by the directive. On the other hand, maximum harmonisation is beneficial to traders, who will be able to expect, with somewhat greater precision, the legal rules which will be applicable in other Member States than their own. The proposal includes in its scope not only contracts where consumers pay for digital content with money, but also those where they actively provide personal data or other data in exchange. However, the concept of ‘paying by data’ met with doubts from the European Data Protection Supervisor.
Within the European Parliament, the proposal is being jointly analysed by two committees: the Internal Market and Consumer Protection Committee and the Legal Affairs Committee. In their joint draft report, the co-rapporteurs propose to inverse the role of ‘objective’ and ‘subjective’ criteria of conformity in favour of the consumer. Hence, consumers would have the right to digital content of the quality normally expected. A supplier will be able to exclude their liability for such quality only by making the consumer aware of the specific condition of the digital content beforehand, and getting the consumer to expressly agree. This modification strengthens the extent of consumer protection, bringing it into line with the rules on sale of tangible goods.
The original proposal extended to contracts in which consumers actively provide personal data or other data as ‘counter-performance’ (i.e. instead of a price in cash). The co-rapporteurs would expand this definition to include data collected by the trader (i.e. provided ‘passively’ by the consumer), as well as that collected by a third party in the interest of the trader. This way there would be no doubt that, for instance, tracking cookies are also included. The rapporteurs also wish to strengthen the protection of consumers in respect of personal data processing. A new rule would provide that any contract terms which are detrimental to a consumer’s data protection rights under the General Data Protection Regulation would not be binding on the consumer. However, the remaining part of the contract would continue to bind the parties if its terms were capable of existing without that unfair term.
This note has been prepared by EPRS for the European Parliament’s Open Days in May 2017.