New EU rules enhancing consumers’ rights in sale of goods and digital content

In the spring 2019 EU adopted new rules on sales contracts for goods and digital content. The aim is to make it easier and safer for consumers to buy and companies to sell both goods and digital content cross-border EU-wide. New rules are part of EU’s digital single market strategy.

Member states have two years to transpose the new rules into their national law after the new directives are published.

This directive concerns all sales of goods, whether that happens physically (in shops), online or in any distance sale. Also, Goods with a digital component (e.g. smart fridge, tv or intelligent watch) are covered.

The directive lays down common rules on certain requirements about sales contracts concluded between sellers and consumers. This means in particular rules on:

• the conformity of goods with the contract,

• remedies in the event of a lack of such conformity,

• the modalities for the exercise of those remedies, and

• commercial guarantees.

Directive includes a two years minimum defect liability period (from the time the goods are delivered). The reversed burden of proof in favor of the consumer is extended from current 6 months to 1 year. Member states can extend this period even up to 2 years. If a defect becomes apparent within this period it is presumed to have existed at the time when the goods were delivered, unless proved otherwise or unless this presumption is incompatible with the nature of the goods or with the nature of the defect.

This directive concerns the supply of digital content and services and covers:

• data produced and supplied in digital form (e.g. music, online videos, etc.),

• services allowing for the creation, processing or storage of data in digital form (e.g. cloud storage),

• services allowing for the sharing of data (e.g. Facebook, YouTube, etc.) and

• any durable medium used exclusively as a carrier of digital content (e.g. DVDs).

The directive applies not only when the consumer pays a price for the digital content or services, but also when the consumer provides personal data to the trader as consideration for digital content or services.

Like the sales of good directive, the digital content directive specifies common rules on certain requirements on contracts between traders and consumers for the supply of digital content or digital services. This means in particular rules on:

• the conformity of digital content or a digital service with the contract,

• remedies in the event of a lack of such conformity or a failure to supply,

• the modalities for the exercise of those remedies, and

• the modification of digital content or a digital service.

Defect liability and burden of proof periods are same as in sales of goods directive. If digital content or services are provided continuously over a certain period, the trader is liable for any lack of conformity or failure to supply during this period.

The traders will have an obligation to ensure that the consumer is informed of and supplied with updates. This includes security updates that are necessary to keep the digital content or digital service in conformity with the contract.

New clear rules are certainly needed in our digital world. An increasing number of products are connected to internet and have built-in intelligence. We have numerous different and evolving digital content and services available. Both directives are based on the principle of maximum harmonization. Yet, on some aspects, there is still room for EU member states to go beyond the requirements of the directives to maintain the level of consumer protection already applied at national level. Quite a few aspects remain still to be regulated by the member states. Unfortunately, this means that companies are not able to cut red tape to the extent needed to achieve the set objectives concerning businesses. Instead, new rules are likely to cause increased costs for businesses. For consumers certainly the directives will bring along enhanced rights.