Contracts for the supply of digital content and digital services

SUMMARY OF:

Directive (EU) 2019/770 on certain aspects concerning contracts for the supply of digital content and digital services

WHAT IS THE AIM OF THE DIRECTIVE?

It sets out rules concerning contracts for the supply of digital content or digital services, in particular:
- rules on conformity with the contract; and
- remedies where the digital content or digital service does not conform or if there is a failure to supply.
Digital content includes computer programmes and mobile applications, as well as video and audio files in digital form.
Digital services include, for instance, cloud computing services and social media.
The directive is part of the digital single market strategy for Europe.

KEY POINTS

Scope

The directive applies to any contract where a trader supplies digital content or digital services to the consumer and the consumer pays or undertakes to pay a price. It also applies when the consumer does not pay a price but provides or undertakes to provide personal data to the trader, unless the personal data provided are only processed for the purpose of supplying the digital content or digital service or for the trader to comply with legal requirements.

Exceptions include contracts regarding:

goods with digital elements (which are regulated in Directive (EU) 2019/771);
internet access;
texting (such as SMS), with the exception of number-independent interpersonal communications;
healthcare;
gambling services;
financial services;
software offered under a free and open-source licence (where no price is paid and the personal data provided by the consumer is used only to improve the specific software);
digital content as part of a performance or event, such as digital cinematographic projection;
digital content provided by public sector bodies in accordance with Directive 2003/98/EC.

Conformity

Digital content or digital services in general must:

fit the description, quantity and quality, and have other features such as functionality, compatibility, interoperability, as required by the contract;
be fit for the purpose agreed as part of the contract process;
be supplied with all accessories, instructions and assistance as required by the contract;
be updated as stipulated by the contract;
be fit for the purposes for which digital content or digital services of the same type would normally be used;
have the quality and performance features (including functionality, compatibility, accessibility, continuity and security), which the consumer could reasonably expect;
be supplied with any accessories and instructions which the consumer may reasonably expect to receive;
comply with any trial or preview version made available before the contract was concluded.

Traders must ensure that the consumer is informed of and supplied with updates, including security updates, necessary to keep the digital content or digital service in conformity. The directive also contains more detailed rules on the obligation to provide updates.

Trader's liability

The trader is liable for:
- any failure to supply the digital content or digital service;
- any lack of conformity of the digital content or digital service that exists at the time of supply and becomes apparent within a minimum of two years. If the lack of conformity becomes apparent during the first year, the consumer will not need to prove that it existed at the time of supply.
When the digital content or digital service is supplied continuously, the trader is liable for any lack of conformity that occurs and becomes apparent throughout the period of supply.

Remedies

Where the trader has failed to supply the digital content or digital service without undue delay or within an agreed time-frame, following a reminder, the consumer is entitled to terminate the contract.
In the case of a lack of conformity, the consumer is entitled to have the digital content or digital service brought into conformity (unless this is impossible or would impose disproportionate costs on the trader). If the trader fails to do so, the consumer is entitled to receive a proportionate reduction in the price or to terminate the contract.
When the contract is terminated, the trader must fully reimburse the consumer, except for periods when the continuously supplied digital content or digital service was in conformity.

Obligations and rights in the event of termination of the contract

Once the contract is terminated, traders must comply with the personal data obligations of Regulation (EU) 2016/679 (General Data Protection Regulation). Under certain conditions, traders must:
- also refrain from using content that is not personal data and was provided or created by the consumer when using the digital content or digital service;
- also allow consumers to retrieve such content free of charge, without hindrance from the trader, within a reasonable time.
After the termination of the contract, consumers must refrain from using the digital content or digital service and from making it available to third parties.
EU countries must ensure that there are effective means to ensure compliance with this directive.

The directive complements Directive (EU) 2019/771 on contracts for the sale of goods.

FROM WHEN DOES THE DIRECTIVE APPLY?

It has to become law in the EU countries by 1 July 2021. EU countries must apply the rules of the directive as of 1 January 2022.

BACKGROUND

MAIN DOCUMENT

Directive (EU) 2019/770 of the European Parliament and of the Council of 20 May 2019 on certain aspects concerning contracts for the supply of digital content and digital services (OJ L 136, 22.5.2019, pp. 1-27)