The proposal for Directive of the European Parliament and of the Council 634/2015 on certain aspects of digital content contracts was published on 9 December 2015. This Directive is important if we consider that we are witnessing a rapid process of digitization of the lives of companies and individuals in which the transactions of software, applications and other goods of a digital nature are common and frequent. The scope of the Directive affects contracts of digital content and services between companies and consumers, including programs, videos, sound reproductions etc. Likewise, it includes contracts for the provision of digital services that allow the sharing of certain data, such as social networking platforms, or digital data processing or storage services, known as “the cloud”.

The proposed Directive intends to reduce the differences in the legal regulation between EU Member States that imply impediments or barriers to the traffic of cross-border operations in this area. In short, it is geared towards the development of a Digital Single Market. At the same time, it aims at regulating this kind of legal transaction before the market dynamics based on ad hoc agreements between the clients and provider take on proportions that make it impossible, or, greatly limit its modelling.

On 8 June 2017, the Council of the European Union adopted its position on the proposal for the Directive as follows:

  1. The Directive must establish contractual remedies, not only where a fee is paid for the digital content or service, but also in cases where personal data is facilitated that will be processed by the digital content providers. There are some exceptions in which the provider treats the personal data solely and exclusively to enable the service or to provide certain digital content, or for the mere purpose of compliance with certain mandatory rules.
  2. In case of conflict or disagreement between client and provider, the proposed Directive establishes the provider’s right for a second opportunity before the supply contract can be terminated.
  3. As regards to the period for the provider’s liability, the Directive does not completely harmonize the differences between EU Member States, although it sets a period of responsibility for the provider in cases of lack of conformity with the content or service provided, which may not be less than 2 years. During said period there will be a reversal of the burden of proof on the provider when there is a case of conflict in the provision of service or operation of the digital content subject to a transaction.

It should be mentioned that the Directive aims to reach both large companies and SMEs (Small and medium enterprises), understanding that there should be no distinction between service providers because of their size, which would undermine consumer confidence. What the EU legislator intends to do is to provide this type of trade with a harmonized cross-border regulation, which should be of benefit to SMEs, especially to smaller ones, since they are not obliged to incur the costs of the development of specific contractual terms. However, we understand that in certain cases the legislation transposed by Member States under the Community Directive might be supplemented or amended, in accordance with the size of the provider or customer, as well as the special relationships that may exist between the two parties. The only requirement is that said modifications are not detrimental to the consumer.

The proposed Directive establishes the mandatory nature of consumer contract law, clarifying that any deviation from the requirements, to the detriment of the consumer, shall not be binding on the latter.

According to the European Union, the transposition of the measures provided by the Directive should lead to an increase in sales of € 1 billion and a decrease in prices, which in turn will generate a growth in consumption.

 

 

Eduardo Vilá

Vilá Abogados

 

For more information, please contact:

va@vila.es

 

30th of June 2017