Finally, there could be cases where the trader's non-compliance with its obligations under Regulation (EU) 2016/679 can also constitute a lack of conformity of the digital content or digital service with the objective requirement for conformity which requires the digital content or digital service to possess the features which are normal for digital content or digital services of the same type and which the consumer can reasonably expect. Consumers are not always confident when buying cross border and especially when it is done online. 1. Both the scope of this Directive and its substantive rules should be technologically neutral and future-proof. In contrast, if the absence of the incorporated or inter-connected digital content or digital service does not prevent the goods from performing their functions, or if the consumer concludes a contract for the supply of digital content or a digital service which does not form part of a sales contract concerning goods with digital elements, that contract should be considered to be separate from the contract for the sale of the goods, even if the seller acts as an intermediary of that second contract with the third-party supplier, and could fall within the scope of this Directive. Therefore the draft has been conceived as a ‘Directive on Online Intermediary Platforms’. While this Directive lays down rules on certain requirements concerning contracts for the supply of digital content or digital services, Directive (EU) 2019/771 lays down rules on certain requirements concerning contracts for the sale of goods. 5. Differentiation depending on the methods of payment could be a cause of discrimination and provide an unjustified incentive for businesses to move towards supplying digital content or a digital service against digital representations of value. In this context, the Commission could call for the development of international and Union standards and the drawing up of a code of conduct by trade associations and other representative organisations that could support the uniform implementation of this Directive. This Directive should also not apply to authentic instruments and other notarial acts, regardless of whether they are performed, recorded, reproduced or transmitted by digital means. The burden of proof with regard to whether the digital content or digital service was supplied in accordance with Article 5 shall be on the trader. The trader shall not impose any fee on the consumer in respect of the reimbursement. 2. However, this Directive should not apply to internet access services. The standard of reasonableness with regard to any reference in this Directive to what can be reasonably expected by a person should be objectively ascertained, having regard to the nature and purpose of the digital content or digital service, the circumstances of the case and to the usages and practices of the parties involved. Any reimbursement that is owed to the consumer by the trader, pursuant to Article 14(4) and (5) or 16(1), due to a price reduction or termination of the contract shall be carried out without undue delay and, in any event, within 14 days of the date on which the trader is informed of the consumer's decision to invoke the consumer's right for a price reduction or to terminate the contract. 5. Where the digital content or digital service is supplied in exchange for a price, the consumer should be able to terminate the contract only if the lack of conformity is not minor. 6. The Policy on Service and Digital and the Directive on Service and Digital took effect on April 1, 2020. Consumers should be able to benefit from their rights under this Directive as soon as the corresponding national transposition measures begin to apply. This Directive should, therefore, apply to contracts where the trader supplies, or undertakes to supply, digital content or a digital service to the consumer, and the consumer provides, or undertakes to provide, personal data. Digital representations of value should also be understood to include virtual currencies, to the extent that they are recognised by national law. They shall apply those measures from 1 January 2022. After transmission of the draft legislative act to the national parliaments. However, it should be for the Member States under their applicable national law to identify the persons in the chain of transactions against which the final trader can turn and the modalities and conditions of such actions. Where the consumer decides not to install the updates, the consumer should, however, not expect the digital content or digital service to remain in conformity. This should include incorporated or inter-connected digital content or digital services the supply of which is explicitly required by the contract. In the event of a conflict between this Directive and Union law on the protection of personal data, the latter should prevail. Considering that the trader is not in principle responsible for acts or omissions of a third party which operates a physical or virtual facility, for instance an electronic platform or a cloud storage facility, that the consumer selects for receiving or storing the digital content or digital service, it should be sufficient for the trader to supply the digital content or digital service to that third party. They would provide businesses with a stable contract law environment when supplying digital content or digital services in other Member States. Other modifications can be required to fulfil the objective requirements for conformity of the digital content or digital service as set out in this Directive. 0000119058 00000 n Moreover, the obligation of the trader to make available to the consumer, upon termination of the contract, any content that is not personal data and has been provided or created by the consumer should be without prejudice to the trader's right not to disclose certain content in accordance with applicable law. Such valid reasons could encompass cases where the modification is necessary to adapt the digital content or digital service to a new technical environment or to an increased number of users or for other important operational reasons. (11)  Directive 2005/29/EC of the European Parliament and of the Council of 11 May 2005 concerning unfair business-to-consumer commercial practices in the internal market and amending Council Directive 84/450/EEC, Directives 97/7/EC, 98/27/EC and 2002/65/EC of the European Parliament and of the Council and Regulation (EC) No 2006/2004 of the European Parliament and of the Council (‘Unfair Commercial Practices Directive’) (OJ L 149, 11.6.2005, p. 22). 1. They replace the: Policy Framework on Information and Technology; Policy on Management of Information Technology; Policy on Information Management; Policy on Service; Policy on Acceptable Network and Device Use; In particular, the consumer should not incur any costs associated with the development of an update for the digital content or digital service. Where digital content and digital services are not supplied in exchange for a price, this Directive should not apply to situations where the trader collects personal data exclusively to supply digital content or a digital service, or for the sole purpose of meeting legal requirements. This Directive shall apply to any contract where the trader supplies or undertakes to supply digital content or a digital service to the consumer and the consumer pays or undertakes to pay a price. In such cases, the contract between the consumer and the trader includes elements of a contract for the supply of digital content or a digital service, but also elements of other contract types, such as sale of goods or services contracts. Another possible example is that of a smart watch. Whether the supply of the incorporated or inter-connected digital content or digital service forms part of the sales contract with the seller should depend on the content of this contract. Where the facts leading to non-compliance with requirements under Regulation (EU) 2016/679 also constitute a lack of conformity of the digital content or digital service with subjective or objective requirements for conformity as provided for in this Directive, the consumer should be entitled to the remedies for the lack of conformity provided for by this Directive, unless the contract is already void or voidable under national law. However, Member States should also remain free to determine, in the case of dual purpose contracts, where the contract is concluded for purposes that are partly within and partly outside the person's trade, and where the trade purpose is so limited as not to be predominant in the overall context of the contract, whether and under which conditions that person should also be considered a consumer. Digital content or a digital service that is incorporated in or inter-connected with goods in that manner should fall within the scope of Directive (EU) 2019/771 if it is provided with the goods under a sales contract concerning those goods. Such business models are used in different forms in a considerable part of the market. (9)  Directive 2002/65/EC of the European Parliament and of the Council of 23 September 2002 concerning the distance marketing of consumer financial services and amending Council Directive 90/619/EEC and Directives 97/7/EC and 98/27/EC (OJ L 271, 9.10.2002, p. 16). (17)  Directive 2009/22/EC of the European Parliament and of the Council of 23 April 2009 on injunctions for the protection of consumers' interests (OJ L 110, 1.5.2009, p. 30). Another example would be where it is expressly agreed that the consumer buys a smart phone without a specific operating system and the consumer subsequently concludes a contract for the supply of an operating system from a third party. Directive (EU) 2019/771 should therefore only apply to the sales contract concerning the smart phone, while the supply of the game application could fall under this Directive, if the conditions of this Directive are met. Such requirement should not prevent the parties from agreeing on a specific time for bringing the digital content or digital service into conformity. This Directive shall enter into force on the twentieth day following that of its publication in the Official Journal of the European Union. 1. 4. The Directive on security of network and information systems (NIS Directive) is Member States should however remain free to determine whether the requirements for the formation, existence and validity of a contract under national law are fulfilled. In recent years, the emergence of new digital services which allow interpersonal communications over the internet, such as web-based email and online messaging services, has led more consumers to use such services. 1. D.2.1 These examples provide details in support of requirement 4.4.1.11.1 of the Directive on Service and Digital. This Directive should fully harmonise certain key rules that have, so far, not been regulated at Union or national level. These include reforming the framework of the e-commerce Directive, regulating super-dominant digital platforms, facilitating data intermediaries as The pursuit of activities falling within the scope of this Directive could involve the processing of personal data. (7)  Council Directive 90/385/EEC of 20 June 1990 on the approximation of the laws of the Member States relating to active implantable medical devices (OJ L 189, 20.7.1990, p. 17). The consumer should remain free to choose whether to install the updates provided. The extent to which modifications negatively impact the use of or access to the digital content or digital service by the consumer should be objectively ascertained having regard to the nature and purpose of the digital content or digital service and to the quality, functionality, compatibility and other main features which are normal for digital content or digital services of the same type. One of the major factors for consumers' lack of confidence is uncertainty about their key contractual rights and the lack of a clear contractual framework for digital content or digital services. This Directive and Directive (EU) 2019/771 of the European Parliament and of the Council (3) should complement each other. The trader is also likely to be in a better position to assess whether the failure to supply or the lack of conformity is due to the incompatibility of the consumer's digital environment with the technical requirements for the digital content or digital service. The consumer shall be entitled to have the digital content or digital service brought into conformity, unless this would be impossible or would impose costs on the trader that would be disproportionate, taking into account all the circumstances of the case including: the value the digital content or digital service would have if there were no lack of conformity; and. This can be the case when, for instance, an end-user licence agreement prohibits the consumer from making use of certain features related to the functionality of the digital content or digital service. The trader shall be liable for any failure to supply the digital content or digital service in accordance with Article 5. Except in the situations referred to in point (a), (b) or (c) of paragraph 3, the trader shall, at the request of the consumer, make available to the consumer any content other than personal data, which was provided or created by the consumer when using the digital content or digital service supplied by the trader. If the trader then fails to supply the digital content or digital service, the consumer should be entitled to terminate the contract. However, the consumer should also refrain from using the digital content or digital service and from making it available to third parties, for instance by deleting the digital content or any usable copy or rendering the digital content or digital service otherwise inaccessible. 1. This Directive should only apply to the elements of the overall contract that consist of the supply of digital content or digital services. Among its directives, a new directive on copyright in the digital single market. (16)  Regulation (EU) 2017/2394 of the European Parliament and of the Council of 12 December 2017 on cooperation between national authorities responsible for the enforcement of consumer protection laws and repealing Regulation (EC) No 2006/2004 (OJ L 345, 27.12.2017, p. 1). With the exception of Articles 5 and 13, this Directive shall also apply to any tangible medium which serves exclusively as a carrier of digital content. This Directive shall not affect the freedom of Member States to regulate aspects of general contract law, such as rules on the formation, validity, nullity or effects of contracts, including the consequences of the termination of a contract in so far as they are not regulated in this Directive, or the right to damages. 0000005523 00000 n This Directive provides for rules to adapt certain exceptions and limitations to copyright and related rights to digital and cross-border environments, as well as for measures to facilitate certain licensing practices, in particular, but not only, as regards the dissemination of out-of-commerce works and other subject matter and the online availability of audiovisual works on video-on-demand platforms, with a view to … 2. It can be distinguished from regulations, which are self-executing and do not require any implementing measures.Directives normally leave member states with a certain amount of leeway as to the exact rules to be adopted. It replaces the Public Sector Information Directive, also known as the ‘ PSI Directive’ ( Directive 2003/98/EC ) which dated from 2003 and was subsequently amended by the Directive 2013/37/EU ( more about the … 1. This Directive should not affect obligations to provide security updates laid down in Union law or in national law. If any provision of this Directive conflicts with a provision of another Union act governing a specific sector or subject matter, the provision of that other Union act shall take precedence over this Directive. Some modifications, for instance those stipulated as updates in the contract, may form part of the contractual commitment. The trader shall supply the digital content or digital service to the consumer. If, under national law, the trader is only liable for a lack of conformity that becomes apparent within a period of time after supply, that period shall not be less than two years from the time of supply, without prejudice to point (b) of Article 8(2). Ensuring better access for consumers to digital content and digital services, and making it easier for businesses to supply digital content and digital services, can contribute to boosting the Union's digital economy and stimulating overall growth. This Directive should be without prejudice to other Union law governing a specific sector or subject matter, such as telecommunications, e-commerce and consumer protection. 0000220517 00000 n This Directive should not apply to digital content or a digital service that is provided to a public audience as part of an artistic performance or other event, such as a digital cinematographic projection or an audiovisual theatrical performance. Digital content or digital services are often supplied also where the consumer does not pay a price but provides personal data to the trader. (12)  Regulation (EU) 2016/679 of the European Parliament and of the Council of 27 April 2016 on the protection of natural persons with regard to the processing of personal data and on the free movement of such data, and repealing Directive 95/46/EC (General Data Protection Regulation) (OJ L 119, 4.5.2016, p. 1). Considering that digital content or a digital service is supplied in digital form, the supply should not require, in the majority of situations, any additional time to make the digital content or digital service available to the consumer. be updated as stipulated by the contract. This should apply regardless of whether the digital content or digital service is pre-installed in the good itself or has to be downloaded subsequently on another device and is only inter-connected to the good. This Directive should apply to contracts for the development of digital content that is tailor-made to the specific requirements of the consumer including tailor-made software. 3. The directive was published on 15 May 2019 in the Official Journal of the European Union, and all Member States must transpose the new rules into their national law by June 2021. However, in cases where the contract provides for the supply of the digital content or digital service in exchange for a payment of a price and over a period of time, and the digital content or digital service had been in conformity for a period of time prior to the termination of the contract, the trader shall reimburse the consumer only for the proportionate part of the price paid corresponding to the period of time during which the digital content or digital service was not in conformity, and any part of the price paid by the consumer in advance for any period of the contract that would have remained had the contract not been terminated. 2. For instance, as regards digital content or digital services, the purpose of which is limited in time, the obligation to provide updates should be limited to that time, while for other types of digital content or digital service the period during which updates should be provided to the consumer could be equal to the liability period for lack of conformity or could extend beyond that period, which might be the case particularly with regard to security updates. Such violation might effectively bar the consumer from enjoying the digital content or digital service or some of its features, for instance when the consumer cannot access the digital content or digital service at all or cannot do so lawfully. They replace the: Policy Framework on Information and Technology; Policy on Management of Information Technology; Policy on Information Management; Policy on Service; Policy on Acceptable Network and Device Use; The notion of goods with digital elements should refer to goods that incorporate or are inter-connected with digital content or a digital service in such a way that the absence of that digital content or digital service would prevent the goods from performing their functions. the failure of the consumer to install or the incorrect installation by the consumer of the update was not due to shortcomings in the installation instructions provided by the trader. Article 26(1) and (2) of the Treaty on the Functioning of the European Union (TFEU) provide that the Union is to adopt measures with the aim of establishing or ensuring the functioning of the internal market, which is to comprise an area without internal frontiers in which the free movement of goods and services is ensured. 0000004833 00000 n The consumer shall be entitled to either a proportionate reduction of the price in accordance with paragraph 5 where the digital content or digital service is supplied in exchange for a payment of a price, or the termination of the contract in accordance with paragraph 6, in any of the following cases: the remedy to bring the digital content or digital service into conformity is impossible or disproportionate in accordance with paragraph 2; the trader has not brought the digital content or digital service into conformity in accordance with paragraph 3; a lack of conformity appears despite the trader's attempt to bring the digital content or digital service into conformity; the lack of conformity is of such a serious nature as to justify an immediate price reduction or termination of the contract; or. Article 19 of this Directive shall not apply where a bundle within the meaning of Directive (EU) 2018/1972 includes elements of an internet access service as defined in point (2) of Article 2 of Regulation (EU) 2015/2120 of the European Parliament and of the Council (22) or a number-based interpersonal communications service as defined in point (6) of Article 2 of Directive (EU) 2018/1972. The distinctive element of this category is the fact that the digital content or digital service is available or accessible to consumers only for the fixed duration of the contract or for as long as the indefinite contract is in force. The distinctive element of this category of digital content or digital service is the fact that consumers thereafter have the possibility to access and use the digital content or digital service indefinitely. While the final trader should be liable towards the consumer in the event of a lack of conformity, it is important to ensure that the trader has appropriate rights vis-à-vis different persons in the chain of transactions in order to be able to cover the liability towards the consumer. 2. Against this background, the Commission 2017 Work Programme included a company law initiative to facilitate the use of digital technologies throughout a company's lifecycle (equally confirmed in the Digital Single Market Mid-term Review6). In the event of a violation of third-party rights that results in a restriction that prevents or limits the use of the digital content or digital service in accordance with the subjective and objective requirements for conformity, the consumer should be entitled to the remedies for the lack of conformity, unless national law provides for the nullity of the contract, or for its rescission, for example for breach of legal warranty against eviction. Having regard to the proposal from the European Commission. As a consequence, any processing of personal data in connection with a contract falling within the scope of this Directive is lawful only if it is in conformity with the provisions of Regulation (EU) 2016/679 relating to the legal grounds for the processing of personal data. In accordance with the Joint Political Declaration of 28 September 2011 of Member States and the Commission on explanatory documents (18), Member States have undertaken to accompany, in justified cases, the notification of their transposition measures with one or more documents explaining the relationship between the components of a directive and the corresponding parts of national transposition instruments. (5)  Directive 2011/24/EU of the European Parliament and of the Council of 9 March 2011 on the application of patients' rights in cross-border healthcare (OJ L 88, 4.4.2011, p. 45). 3. the significance of the lack of conformity. The trader should inform the consumer that the consumer's decision not to install updates which are necessary for keeping the digital content or digital service in conformity, including security updates, will affect the trader's liability for conformity of those features of the digital content or digital service which the relevant updates are supposed to maintain in conformity. Where processing of personal data is based on consent, in particular pursuant to point (a) of Article 6(1) of Regulation (EU) 2016/679, the specific provisions of that Regulation including those concerning the conditions for assessing whether consent is freely given apply. 0000000956 00000 n This Directive should define its scope in a clear and unequivocal manner and provide clear substantive rules for the digital content or digital services falling within its scope. The consumer should also be entitled to any part of the price paid in advance for any period that would have remained after the contract was terminated. 1. Instead, it should be for the trader to prove that the digital content or digital service was in conformity at that time or during that period. The burden of proof with regard to whether the lack of conformity is minor shall be on the trader. The commercial practice of bundling offers of digital content or digital services with the provision of goods or other services is subject to Directive 2005/29/EC of the European Parliament and of the Council (11) concerning unfair business-to-consumer commercial practices in the internal market. This Directive should also not apply to situations where the trader only collects metadata, such as information concerning the consumer's device or browsing history, except where this situation is considered to be a contract under national law. While AI is a powerful tool, it must be used responsibly. 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