The present article, the third in our series, focuses on the extension of the scope of the distance selling and off-premises sales rules to the supply of digital content and digital services. Click here to read the first article of our series, which focuses on the new warranty and conformity requirements for sales of goods (with or without digital elements), digital content, and digital services and here to read the second article, which focuses on the extended list of unfair (misleading and aggressive) market practices in a B2C context.
Scope of rules on distance selling and off-premises contracts
First, the rules on distance selling apply to all consumer contracts concluded without face-to-face contact, through means of distance communication (i.e., when there is no simultaneous presence of the trader and the consumer when entering into the sales contract). The rules also apply to situations where consumers visit the trader’s premises merely to gather information about the goods or services, and subsequently (negotiate and) conclude the contract at a distance.
Second, the rules on off-premises contracts apply to all consumer contracts that are concluded outside the trader’s normal business premises (i.e., sales made at trade fairs, door-to-door selling).
Traditionally, both sets of rules only applied to contracts according to which the consumer paid a monetary price in exchange for the delivery of certain (physical) goods or certain services. The new legislation extends their scope to (i) the sale of digital content and the provision of digital services, and (ii) contracts according to which the consumer provides personal data to the trader in exchange for digital content, or digital services, except where such personal data are provided only for the proper execution of the contract or to comply with a legal obligation, and not for any other purpose.
Below, we will focuss on what this means for (i) the right of withdrawal, and (ii) the right to receive vital pre-contractual information in the context of distance selling and off-premises contracts.
Right of withdrawal
The right of withdrawal allows a consumer to cancel, without justification, a contract within 14 days after he or she received the purchased goods or after he or she concluded the contract for services. This right shall now also apply to the supply of digital content (i.e. content not supplied on a tangible medium) and digital services, purchased through distance selling or an off-premise contract, even when the consumer does not pay an actual purchase price, but provides the trader with personal data in exchange for the digital content or the digital service.
In this context, the new legislation also foresees a few amendments which further specify how the exercise of the right of withdrawal must be interpreted within the context of digital content and digital services. For example, the new legislation foresees that, in the event of withdrawal, the trader must refrain from using any content other than personal data, which was provided or created by the customer when using the digital content or digital service, except where such content (i) has no utility outside of the context of the digital content or digital service, (ii) only relates to the consumer’s activity when using the digital content or digital service, (iii) has been aggregated with other data by the trader and cannot be disaggregated or only with disproportionate efforts, or (iv) has been generated jointly by the consumer and others, and the consumers can continue to make use of the content. Further, the law also obliges consumers which have exercised their right of withdrawal to refrain from using the digital content or digital service and from making it available to third parties.
Finally, the new legislation also provides an exception to the right of withdrawal for contracts for the supply of digital content that is not supplied on a tangible medium. The consumer will lose his or her right of withdrawal once the performance hereof has begun (i.e., downloading or streaming), provided that the consumer has provided prior express consent to already start the performance during the 14-days withdrawal period and hereby acknowledged the loss of the right of withdrawal. The legislation further stipulates that the conditions of prior consent and acknowledgment will only apply if the consumer paid a price in exchange for the delivered content.
Pre-contractual information obligation
When concluding a distance sales or off-premises contract with a consumer, the applicable legislation foresees that the trader must provide the consumer with some essential pre-contractual information. Traditionally, this entailed the obligation of the trader to inform the consumer of (i) the main characteristics of the supplied goods and services, (ii) the identity of the trader, (iii) the price, (iv) other relevant costs, (v) the available payment methods, (vi) the existence of the right of withdrawal, etc.
Through the Act of 8 May 2022, the legislator added a few additional obligations, which were necessary to align the current legislation with the requirements that apply to the supply of digital content and digital services.
More specifically, the trader will in such context have to inform the consumer of:
- the functionality of goods with digital elements, digital content, and digital services, including applicable technical protection measures,
- any relevant compatibility and interoperability of goods with digital elements, digital content, and digital services that the trader is aware of or can reasonably be expected to have been aware of, and
- the existence of a legal guarantee or conformity for goods, digital content, and digital services.
More generally, in relation to the proper identification of the trader, the pre-contractual obligation now also foresees the obligation to inform the consumer of the trader’s:
- geographical address,
- telephone number,
- e-mail address, and
- any other means of online communication that guarantees that the consumer can keep any written correspondence with the trader on a durable medium and allows the consumer to contact the trader quickly and efficiently.
To date, many web shops do not yet provide access to a telephone number or e-mail address, only making a contact form available for consumer questions or complaints.
Finally, the new legislation also introduces a unique information obligation regarding personalized pricing towards consumers, i.e., applying differentiated prices to specific consumers or specific categories of consumers based on automated decision-making and profiling of consumer behavior, allowing traders to assess the consumer’s purchasing power. According to this new obligation, traders are now obliged to explicitly inform consumers of such pricing mechanism prior to the conclusion of a distance sales or off-premises contract.
New pre-contractual obligations for online marketplace providers
An online marketplace is defined as “a service using software, including a website, part of a website, or an application, operated by or on behalf of a trader, which allows consumers to conclude distance contracts with other traders or consumers”.
Specific pre-contractual information obligations for online marketplaces include the obligation to inform the consumer of:
- the capacity of the third parties offering the goods, services, or digital content;
- If the third party is not a trader, the online marketplace shall also inform the consumer of the fact that consumer rights shall not apply to the contract; and
- how the obligations related to the contract are shared between the third-party trader and the online marketplace.
These additional pre-contractual information obligations do not affect the pre-contractual obligations discussed above. Depending on the contractual relationship, the third-party trader or the online marketplace provider shall still be obliged to comply with the conditions mentioned above and provide the consumer with all other essential pre-contractual information.
The new legislation brings several important changes to the current distance selling and off-premisses contracts legislation, which are of mandatory nature. Traders operating in a B2C context, and especially in the digital economy, are therefore advised to check and update (where needed) their general terms and conditions (or other pre-information documents) and consumer contracts.
Should you require any assistance in the field of (digital or non-digital) consumer law, please contact us.