Digital Contracts for Europe
Differences in consumer contract law rules have been identified by stakeholders consulted to prepare the Directives, including businesses and consumer associations, as a significant barrier to cross-border trade. For digital content, there is a clear gap in the EU legislation, while most Member States do not have any specific national legislation. In some Member States, the supply of digital content may be governed by the rules of sales, in others by the rules on services or rentals. As a result, remedies for defective digital content differ. This creates legal uncertainty both for businesses and consumers. Only a few Member States have recently enacted or started to work on specific legislation on contracts for the supply of digital content. This risks causing more legal fragmentation if no action is taken at EU level. For goods, and in particular regarding consumer rights in case a good is defective, there are only minimum EU requirements in place. As a result, in practice there are still different national laws. This situation creates legal uncertainty, imposes additional costs for businesses and affects consumers' confidence in cross-border shopping.
The Commission is proposing two Directives: one for digital content and another for goods. Together they will ensure that the same key contract law rules apply across the EU for online purchases of goods and the supply of digital content. Consumers will have access to offers from more traders across the EU and will therefore benefit from a wider choice of products, at more competitive prices. Consumers will have specific rights with a high level of protection when accessing digital content and buying goods online. For digital content, the rules will apply when consumers pay for their content with money or if they give their data to access the content (e.g. by registering to an online service/ social media).
Digital content. Supplier's liability for defects: if the digital content is defective, the consumer can ask for a remedy; there will be no time limit to the supplier's liability for such defects, because -unlike goods- digital content is not subject to wear and tear. Reversal of burden of proof: if the digital content is defective, it will not be up to the consumer to prove that the defect existed at the time of supply, but rather for the supplier to prove that this is not the case; this is important considering the technical nature of digital content where it can be especially difficult for consumers to prove the cause of a problem. Right to end a contract: consumers will have the right to terminate long-term contracts, and contracts to which the supplier makes major changes. Contract established in exchange for data: if the consumer has obtained a digital content or service, in exchange for personal data, the new rules clarify that the supplier should stop using them in case the contract is ended.
Goods. Reversal of the burden of proof for two years: in the EU, it is already the case that for a certain period of time a consumer asking for a remedy for a defective product does not have to prove that the defect existed at the time of delivery; it is up to the seller to prove the opposite; currently, the time period during which the seller has this burden of proof varies by Member State; now it will be extended to two years throughout the EU. No notification duty: consumers will not lose their rights if they do not inform the seller of a defect within a certain period of time, as is currently the case in some Member States. Minor defects: if the seller is unable or fails to repair or replace a defective product, consumers will have the right to terminate the contract and be reimbursed also in cases of minor defects. Second-hand goods: for second-hand goods purchased online, consumers will now have the possibility to exercise their rights within a two-year period, as is the case with new goods, instead of the one-year period that currently applies in some Member States.
Businesses will be able to supply digital content and sell goods online to consumers throughout the EU, based on the same set of contract law rules. This will increase legal certainty and create a business friendly environment. When supplying digital content, businesses will avoid the cost of legal fragmentation which is emerging due to the lack of EU wide rules and the fact that some Member States are starting to put into place specific national legislations. When selling goods, businesses will save the costs of adapting to the contract law rules of every Member State they wish to sell in.