Draft report on the proposal for a directive concerning contracts for the supply of digital content

Opinion provides justification for and amendments to proposal. Amendments intend to change some provisions of directive with purpose to make protection of rights and private data of consumers stronger.

According to opinion (de) scope and definition of digital content have to be further clarified to ensure that all consumers – also those that are less tech – savvy or less technically intimate with the online environment – have their rights guaranteed.

Given the expected increase in the near future of the Internet of Things with all types of “smart devices” with embedded software incorporated, it is important to clarify under what rules such “smart devices” and its embedded software fall. In the future it will probably become rather difficult to differentiate what would be the predominant element of the product between the digital content and the tangible good.

In the proposal only contracts are covered whereby the consumer either pays for or “actively provides” personal data as counter-performance. This is too limited, as often nowadays consumers’ personal data (such as location data, personal contacts, shopping history etc) are automatically collected and used as counter-performance while consumers are unaware of it.

Exceptions could be allowed for suppliers collecting data that are absolutely necessary for the digital content to function (such as specific location-based services).

In the proposal, digital content has to be in conformity with what was stipulated in the contract and only if nothing has been stipulated in the contract more objective criteria (like technical standards or codes of conducts) could be used to assess its conformity. However, digital content products are often so complex that the consumer cannot be expected to fully grasp the terms and conditions of the contract and to make an informed decision. It would therefore be advisable to use more often criteria such as technical standards or legitimate expectations to ascertain conformity.

The proposal limits the supplier’s liability to economic damages suffered by the hardware and software of the consumer. This is too limited since there might be cases where a consumer suffers serious economic or immaterial loss quite apart from any damage to its digital environment. Furthermore, in order to encourage a stronger sense of responsibility and accountability among suppliers, Member States should be allowed, in setting the detailed rules on damages, to make a differentiation between those suppliers that did everything in their power to limit the possibility of damages and those that did not.