More legal certainty for businesses and enhanced protection for consumers promise to be the much-awaited outcome of the recently adopted EU laws regulating the supply of digital content and services and the sale of goods.
The supply of digital content was never regulated at EU level, leading to divergences in member states’ legal frameworks in so far as the regulation of these products and services are concerned. The recently adopted EU digital content directive now applies to the supply of digital content and covers a variety of data services. Digital content includes products such as videos, music, software or live sports streaming events. Any data produced and supplied in digital form such as music, services allowing for the creation, processing or storage of data in digital form, such as cloud storage, services allowing for the sharing of data, such as Facebook, and any durable medium used exclusively as a carrier of digital content, such as DVDs, are covered by this law. ‘Over the top’ interpersonal communication services (OTTs), bundle contracts and the processing of personal data are also included within the scope of the directive.
On the other hand, the sale of goods directive replaces its predecessor to reflect today’s reality and includes within its scope, all goods, including those products with a digital element, such as smart fridges or smart watches. This new law applies irrespective of whether the sale takes place physically, that is, in a shop, online or via a distance sale.
Any consumer who, for example, downloads music that does not play on their device or purchases a physical defective product, now has a two-year period within which they can request a remedy for the defect. This period starts to run from when the consumer receives the good.
Directive now applies to the supply of digital content
The new rules now provide that, if it is not possible to fix defects within a reasonable time period, the consumer is entitled to a price reduction or full reimbursement. Therefore, if defects are recurring or severe, consumers no longer have to wait for the trader to fix the defect, but can immediately choose to either keep the product, even though it is defective, and get back part of the price paid or terminate the contract, return the product and get a full refund. In the case of smart products, the seller will be held responsible for all defects in the hardware and in the digital element of the good. He or she must also ascertain that software updates needed to keep a smart good faultless and cyber-secure are provided.
By way of practical example, a consumer purchases a new smartphone advertised for its high-resolution camera from an online electronics store in another EU country. However, when the phone arrives, the consumer finds out that the camera takes blurry and low-resolution photos. Within at least two years from when the smartphone was delivered to the buyer, the latter can request the seller to fix the issue. The seller will be responsible regardless of whether the problem is in the camera lens or in the pre-installed camera application. If the seller does not or cannot fix the problem, the consumer can choose to retain the phone and get a price reduction or return the phone with a full refund.
Consumers will not have to prove that the digital content/service or goods were defective from the beginning but any defect, which becomes apparent within one year from delivery date, will be presumed to have existed at the time when the service/goods were delivered unless the seller proves otherwise. Member states can choose to make provision for a two-year period instead of one.
Member states now have two years to transpose these laws into their national law so that they will start to apply throughout the EU by the end of 2021.
Though one can easily deduce the innumerable benefits which consumers stand to garner from these new rules, industry too stands to gain from such harmonisation. Traders are very often discouraged from venturing into the online world due to the amount of time and money which they must invest in deciphering the varying consumer contract laws of the different member states when selling cross-border and adapting contracts accordingly. This is so, since in the absence of harmonised EU legislation, member states would be free to provide consumers with different remedies. However, that is not what a real single market, as is the European one, all about. Harmonised rules thus go a long way in providing the necessary legal certainty to both industry and consumers in such a way that both can truly benefit from a European single market economy.
Mariosa Vella Cardona M’Jur, LL.D., is a freelance legal consultant specialising in European law, competition law, consumer law and intellectual property law. She is also a visiting examiner at the University of Malta.
mariosa@vellacardona.com