New Rules On Contracts For Sale Of Goods And Digital Content

Posted on: 24 Jul 2019

Category: Articles, News

Earlier this year, the EU adopted the text for two new Directives in the context on consumer protection in the digital market: (i) the Digital Content Directive; and (ii) the Sale of Goods Directive. The Directives are both based on the principle of maximum harmonisation, which means Member States cannot deviate from its requirements, except in certain limited circumstances.

The Digital Content Directive applies to contracts of supply of “digital content” (such as music and video content) and “digital services”, which are defined as services that allow the consumer to create, process, store or access data in digital form (such as cloud services); or that allow the sharing of or any other interaction with data in digital form uploaded or created by the consumer or other users of that service (such as Facebook or YouTube). The Digital Content Directive introduces protection for consumers paying for a service but also for those providing data in exchange for such service.

The protection given to consumers of digital services mirrors, in principle, the protection that has been given to consumers for physical goods, albeit with improvements. The Digital Content Directive states that digital content or a digital service has to be supplied in conformity with the contract, both from an objective point of view, but also subjectively in accordance with the specific requirements stipulated in the contract. In case of non-conformity which exists at the time of supply or which becomes apparent within a period of not less than 2 years from supply, the trader shall be liable to remedy the lack of conformity. If the trader cannot remedy the defects within a reasonable amount of time, the consumer shall be entitled to a price reduction or full reimbursement. This Directive does not affect the rules regulating aspects of general contract law and excludes application to certain contracts such as those covering gambling, healthcare and financial services.

The Sale of Goods Directive, which amends the old Directive 1999/44/EC on sale of goods, complements the Digital Content Directive, and will apply to all sale of goods, including “goods with a digital element” such as smart products, and whether they are concluded in shops, online or in a distance sale. This Directive also provides for objective and subjective conformity to contract and requires the trader to provide a remedy in case of non-conformity. The guarantee period is also a minimum of 2 years from the time the consumer receives the good, but it is possible for a Member State to provide for a longer period. In both Directives, the non-conformity is presumed to have existed at the time of supply/delivery, if it becomes apparent within one year, unless proven otherwise.

Upon their publication, Member States will have 24 months to transpose these Directives into national law.

For more information please contact Dr Theresienne Mifsud on [email protected]