Consumer contract rights and digital content

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Issue:
This pertains to a pair of proposed Directives designed to reduce barriers to the cross-border trade of digital content and also physical goods.

Relevant policy:
Proposal for a Directive on certain aspects concerning contracts for the supply of digital content (pdf)

Proposal for a Directive on certain aspects concerning contracts for the online and other distance sale of goods (pdf)

Consumer contract issues also touch on various European-directed consumer and competition law policies, including the Consumer Rights Directive 2014 and the Consumer Rights Act 2015

Progress and developments:
In November 2016 the European Scrutiny Committee of the House of Commons reviewed Government’s position on cross-border sales within the DSM. The dialogue is long and complicated. The Committee requested the following clarifications by 9 May 2017:

On the proposal [for digital content], we welcome:

a)the direction and focus of the negotiations so far on the question of consumer expectations in relation to “fitness for purpose” and “quality”, leaving damages remedies to regulation at national level and the need to reduce overlaps between this and the proposal on tangible goods (b); and

b)the Government’s focus on obtaining a text which aligns with the Consumer Rights Act and which does not, in the Minister’s words “stifle the innovative UK tech business”.

We note that there appears to be general acceptance now that “free” digital content contracts will be covered by [this] proposal but that Government wants the type of data acting as payment to be closely defined and for practical remedies to reflect reasonable consumer expectations. We agree with the Government that legal clarity on obligations and rights in relation to such contracts will be key.

We look forward to the Minister’s further updates as the negotiations on proposal (a) progress and when they commence on proposal [for physical goods].

In relation to Brexit, we ask the Minister to indicate:

a)when she considers the legislative proposals are likely to be adopted; and

b)the extent to which the UK is likely to want to mirror in its post-Brexit domestic legislation the substance of the legislative proposals where there is a deviation from current UK law; and if so the extent to which this would require further agreement with the EU because it involves reciprocal cross-border rights and obligations.

On 15 March the complicated dialogue continued, and then again on 25 April.

Elsewhere, general digital consumer rights and Brexit were briefly discussed in the Lords on 12 December 2016.

In November 2017 the European Scrutiny Committee asked the Minister for Digital to clarify how the the general outline of future cross-border civil justice cooperation might apply to consumer rights for digital and physical goods. They also somewhat comically chased up the Minister for Small Business on her missing homework.

In December 2017 the Committee cleared the Proposed Directive concerning contracts for online and other distance sales of goods from further scrutiny, but retained scrutiny over the Amended proposal for a Directive on the sales of (physical) goods, on the very interesting grounds that the vote to leave the European Union may well require a fresh impact assessment of the proposal’s impact to be carried out.

In July 2018 the ESC examined the New Deal for Consumers package, asking Government to clarify aspects relating to cross-border digital content and services.

In November 2018 the ESC agreed that government should continue to influence the two proposals for the sake of future EU-UK trading relationships, if not the current one.

In February 2018 the ESC basically gave up:

We do not comment further here, other than to ask the Minister whether the UK consumer is likely to be assisted in a “no deal” situation by the increased harmonisation of the remaining 27 Member States consumer protection laws envisaged by this proposal. We remind the Minister of what her own “no deal” guidance says: “As the UK will no longer be a Member State, there may be an impact on the extent to which UK consumers are protected when buying goods and services in the remaining Member States. The laws of those states are similar but may differ in some areas to UK law both as respective laws evolve over time as well as due to differing levels of harmonisation between Member States in some areas.”