The directive (EU) 2019/770 on certain aspects concerning contracts for the supply of digital content and digital services contains common rules for the supply of digital content or digital services to contracts between traders and consumers. The directive does not cover actual communications services, such as telephone and Internet subscriptions. The provisions of the directive apply to the supply of digital content or digital services from 1 January 2022.
What is left to national legislation:
- Legality of goods
- Compensation for detriment
- General contractual law issues such as making a contract, its validity, invalidity or impact
- The nature of the contracts for the supply of digital content or services and the question of whether the contracts are, for example, sales, service or rental contracts
- Whether consumers can make claims regarding persons who have participated in the business chain at an earlier stage
- Liability issues vis-à-vis a third party other than a vendor who provides or undertakes to provide digital content or digital services, such as a developer
- The consequences of a lack of delivery of digital content or digital service or the fact that the digital content or digital service is incorrect, where the failure to deliver or an erroneous delivery is due to an obstacle beyond the control of the vendor and where the vendor cannot be expected to avoid or eliminate the obstacle and its consequences, for example in the case of force majeure
- The rights of the parties to refrain from performing their obligations in full or in part until the other party fulfils its obligations. For example, whether, in the event of a fault, the consumer has the right to refrain from paying the purchase price or part of it until the vendor has brought the digital content or digital service into conformity with the contract, or whether the vendor has the right to keep the compensation due to the consumer as a result of the termination of the contract until the consumer fulfils their obligation to return the material medium to the vendor.
- Applying the rules of the directive to contracts not within the scope of this directive or otherwise regulate such contracts – for example, to extend the protection afforded to consumers to natural or legal persons who are not consumers, such as non-governmental organisations, start-ups or SMEs.
- Application of the directive to platform providers not considered to be vendors
What does the directive cover / what are digital content and services?
Digital content and services include features such as:
- computer programs
- apps (for example, a game app from the app store)
- video files
- audio files
- digital games
- electronic books or other electronic publications
- digital services that enable the creation, processing, use or storage of data in digital form, including online application services (SaaS), such as the sharing of video and sound recording and other types of online storage
- word processing options or games available in the cloud environment
- social media
- instant messaging services (e.g. WhatsApp, Facebook Messenger) and web-based email services
- digital television services.
How can digital content or digital services be delivered?
Digital content or digital services can be delivered in a variety of ways, for instance:
- by transferring on a material medium
- by downloading on the consumer’s own device
- by streaming online and giving access to recorded digital content or social media.
Digital content or digital services may also be provided on a material medium, such as:
- DVDs and CDs
- with USB sticks and SD cards
- a material medium, provided that the material medium acts exclusively as a means of transmitting digital content.
What is the deadline for delivering digital content or services?
Unless the consumer has agreed otherwise with the vendor, the vendor shall supply the digital content or digital service without delay after the conclusion of the contract. The vendor has fulfilled their obligations when the digital content or the possibility to access or download it is available or accessible, or when the digital service is available to the physical or virtual system selected for it.
When is there an error in digital content?
The vendor is responsible for ensuring that the digital content or service is as agreed.
There is an error in the digital content if:
- it does not correspond to the agreed description, quantity, quality and functionality, compatibility, interoperability or other characteristics that do not correspond to the agreement
- it is not suitable for the specific purpose for which the consumer needs it, which has been brought to the attention of the trader by the consumer no later than the time of the conclusion of the contract and which has been approved by the trader
- not all accessories, instructions, installation instructions, and customer support required by the contract are included
- it has not been updated as specified in the contract.
In addition, the digital content or digital service must meet the following requirements:
- it is suitable for the purposes for which the same type of digital content or digital services are generally used
- its quantity and, inter alia, the functionality, compatibility, accessibility, continuity and safety of its characteristics related to its operation and other characteristics shall correspond to the characteristics which the same type of digital content or digital service generally possesses and which the consumer can reasonably expect
- where necessary, it shall be accompanied by accessories and instructions which the consumer can reasonably expect to receive
- it corresponds to the trial versions or preliminary presentations of the digital content or digital service presented by the vendor prior to the conclusion of the contract.
Can I require the vendor to provide information on updates to the digital content or service and correct operation of the service throughout the agreed period?
The vendor is responsible for ensuring that the consumer is informed of the updates and security updates and that they are delivered to the consumer during the period agreed on in the contract or within a reasonable period of time. If the consumer does not install the updates provided by the vendor within a reasonable period of time, the vendor shall not be liable for any error resulting from the absence of the update concerned, if it has informed the consumer of the availability of the update and of the consequences of the consumer’s failure to install the update, and if the fact that the consumer has not installed the update or has incorrectly installed it is not due to incomplete installation instructions issued by the trader.
If a long-term or continuous supply of digital content or service has been agreed on, the digital content or service must comply with the contract throughout the period.
However, an irregularity shall not be deemed to exist if, at the time of the conclusion of the contract, the consumer has been explicitly informed that a particular characteristic of the digital content or digital service differs from the requirements of conformity and the consumer has expressly and explicitly accepted that deviation when concluding the contract.
Unless otherwise agreed by the parties, the delivered digital content or digital service shall conform to the latest version available at the time of conclusion of the contract.
There was an error connecting the digital content or service to the consumer’s digital content. Who is liable for that?
If the digital content or digital service is incorrectly integrated or connected into the consumer’s digital environment, there is a digital content or digital service error if
- the integration or supervision of the digital content or digital service was carried out by the vendor
- the digital content or digital service was intended to be integrated by the consumer, but incorrect integration was due to inadequate instructions provided by the vendor.
How long will the vendor be liable for errors in the digital content or service?
The vendor’s liability for errors shall be valid for at least two years from the date of delivery of the digital content or service. If the delivery takes longer, the vendor shall be liable for any error occurring at any time during the period in which the digital content or digital service is to be supplied under the contract.
However, please note the impact of the provision on the burden of proof:
If an error occurs in the digital content or service within one year of its delivery, the error shall be deemed to have existed at the time of delivery unless the vendor proves otherwise. It is sufficient if the vendor demonstrates that the consumer’s digital environment is not compatible with the technical requirements of the digital content or digital service and if the vendor has communicated such requirements to the consumer in a clear and comprehensible manner before the conclusion of the contract. The consumer must cooperate with the vendor to determine whether a digital content or digital service error is caused by the consumer’s digital environment, or the burden of proof lies with the consumer.
What can I demand if the vendor has not delivered the digital content or service as agreed?
The consumer must first ask the vendor to provide the digital content or digital service. In such cases, if the vendor does not act without undue delay or within a jointly agreed additional period, the consumer has the right to terminate the contract.
The consumer has the right to terminate the contract immediately if the vendor indicates, or if it is clear from the circumstances, that the vendor does not intend to supply the digital content or digital service concerned or is unable to deliver it at a time that is essential for the consumer.
What are the consumer’s rights when there is a defect in the digital content or service?
If the digital content or service has a defect for which the vendor is liable, the consumer may demand that the defect be rectified. The defect must be rectified within a reasonable time and ensuring that this does not result in costs or significant harm for the consumer.
However, if it is impossible to rectify the defect or if it caused unreasonable costs, the vendor would not have to rectify the defect, but the vendor must take other corrective measures. These may involve a proportionate discount if the digital content or digital service can be used despite the defect. In the case of longer-term supply, the discount shall be limited to the period during which the digital content or digital service did not meet the agreed requirements. The vendor must offer a discount without undue delay and no later than 14 days after the consumer has indicated that they demand it.
The defect is rectified by cancelling the contract if:
- Rectifying the defect to comply with the contract would be impossible or unreasonable
- The vendor has not rectified the defect or has attempted to rectify the defect without success
- The nature of the defect is so serious that it would justify the termination of the contract
- The vendor cannot rectify the defect within a reasonable time or without causing significant harm to the consumer.
However, the consumer has the right to terminate the contract only if the defect is not minor. The vendor has the burden of proving that the defect is minor.
What are the obligations of the vendor and the consumer in the event of a termination?
If the contract is terminated, the vendor shall compensate the consumer for all payments made under the contract for the period during which the digital content or service was faulty and possibly paid in advance when the contract is terminated prematurely. The vendor must refund the payments without undue delay and no later than 14 days after the consumer has exercised their right to terminate the contract.
When the contract is terminated, the vendor has the right to block the consumer’s access to the digital content or service, for example by closing the consumer’s user account. With certain exceptions, the vendor must not use digital content or service handed over or created by the consumer and, at the request of the consumer, must make such content available to the consumer.
After the termination of the contract, the consumer shall not use digital content or digital service and shall not make it available to third parties. Where the digital content has been supplied on a material medium, the consumer shall, at the vendor’s request and at the vendor’s expense, return the material medium to the vendor without undue delay. The payment is refunded using the same payment method which the consumer originally used, unless otherwise agreed and provided that there are no costs incurred.
Can the vendor modify the digital content or service?
The vendor has an obligation to make essential modifications in order to ensure that the digital content or service remains free of defects.
Modifications other than those necessary may only be made if:
- the contract allows such modifications and contains provisions on specific justified reasons for them
- the modification does not result in additional costs for the consumer, and
- the consumer is informed of the modification clearly and comprehensibly
- the consumer has been informed of the possibility of cancelling the contract or keeping the digital content or service unmodified.
The consumer may cancel the contract if the modification has a negative impact on their possibilities of using the digital content or service. This right does not apply if the negative impact is minor. The consumer may terminate the contract free of charge within 30 days of being informed of the modification, or after the vendor has modified the digital content or digital service, whichever occurs later.