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EU Directive (EU) 2019/770 concerning contracts for the supply of digital content and digital services was published recently on 22nd May.
It is a set of regulations on the requisites which contracts between traders and consumers for the supply of digital content or digital services must contain. These rules apply to contracts between traders who supply digital contents or services to the consumer in exchange for a price. Therefore, it affects the trader-consumer relationship, provided that the rendering of the service is of an onerous nature.
That said, we must specify that the Directive shall also apply when the consumer does not pay for said services with money (as a classic means of compensation) but by merely facilitating personal data.
The new developments of the Directive lie directly with giving value to personal data, which the consumer often hands over unconsciously to the provider of digital services. But the Directive is not applicable when such personal data facilitated by the consumer are used by the trader solely for providing contents or the fulfillment of legal requirements, without using them for any other purpose.
Naturally, the question arises of how to find out whether the trader uses the data for other purposes such as their marketing, whether it be directly or indirectly.
The sphere of application of the Directive also affects contents development contracts, made to fit the needs of the consumer, as well as all of the material support which serves exclusively as a carrier of digital content.
Unless agreed otherwise, the trader must supply the digital content or services immediately following the entering into of a contract.
The provision of digital content or services shall be deemed to conform when various subjective and objective requisites are met:
a) Subjective: identity of quantity, quality and functionality between what has been contracted and what is supplied; that the services and contents are fit for the purposes established by the consumer in the contract and they are supplied with all accessories, instructions etc., provided for in the contract.
b) Objective: among those provided for in the Directive, we shall underline the obligation of the trader to provide with and communicate to the consumer any updates so that the conformity of the digital content or services provided is maintained; this duty is extended by the time agreed for the delivery of the contents or services, or when there is just a single act of delivery (or several separate acts), for the term the consumer may “reasonably” expect, depending upon the type and purpose of the services or contents received. Likewise, unless otherwise agreed, the digital contents or services must be supplied in the most recently available version at the time of entering into the contract.
The use of the term “reasonable” stands out as an adjective which does not have a universal meaning and which may vary substantially depending on the Member State in question, because it has links to cultural elements and local customs.
For contracts with one single act of supply or a series of such individual acts of supply, the trader shall be liable for the lack of conformity, for a term of no less than 2 years. The limitation period for the exercise of the consumer’s rights against the trader to demand remedies in the event of a lack of conformity shall allow the consumer to demand the remedies provided for in the Directive in respect of any lack of conformity which becomes apparent within that two-year period.
In the case of contracts for continuous supply over a period of time, the trader shall be liable for any lack of conformity which emerges within the agreed delivery period. Also, in this case, the principle applies that the limitation period established by the Member States must allow the consumer to demand remedies for faults occurring or manifesting themselves for the duration of the contracted supply period.
In general, the burden of proof in respect of conformity or otherwise of the content or services will fall on the trader, unless the trader proves that the consumer’s digital environment is not compatible with the technical requirements of the digital content or services supplied and provided that the trader has clearly informed the consumer about such requirements before contracting.
There are various remedies provided for in the Directive in the event of a lack of conformity:
- Demanding compliance from the trader; a reduction in price (proportional to the lack of conformity detected) or the termination of the contract;
- When bringing digital content or services into conformity is impossible or involves disproportionate costs for the trader, and the consumer would be able terminate the contract and demand payment of the value of content or services if they had been brought into conformity;
- In the event of termination of the contract, the trader must settle all amounts paid under the contract, except in the case of continuous supply contracts, where only the amounts corresponding to the period during which the services or content were not in conformity are paid.
- Once the contract is terminated, the consumer will have the right to retrieve the digital content provided to the trader (other than personal data) for the provision of the service or the creation of the content.
The deadline for transposition into the legislation of Member States set by the Directive is 1st January 2022.
For more information, please contact:
Barcelona, 7th June 2019