Out-Law / Your Daily Need-To-Know

Out-Law News 1 min. read

UK raises concern about EU consumer law plans on trade of data for digital content

The UK government has warned that EU proposals to extend consumer protection rules to businesses that supply digital content for free in return for access to consumers' data could "unduly inhibit" that "very innovative business model".

In December last year the European Commission published a new draft directive on contracts for the supply of digital content which, if introduced, would give consumers new rights of remedy and redress in relation to digital content supplied to them that is faulty or which otherwise fails to conform to sellers' descriptions.

Contracts for the supply of digital content that see consumers exchange either money or a "counter-performance" such as personal data in return for access to that content would be subject to the planned new EU rules. This differs to the position under the UK's Consumer Rights Act where most of the rights and remedies provided for do not apply where consumers exchange personal data in return for access to digital content.

In a consultation it has opened on the EU proposals, the UK government has admitted that it would have to update the Consumer Rights Act if the EU plans on digital content were introduced (11-page / 120K PDF) as currently drafted.

However, it has questioned whether it would be proportionate for consumer rights to be extended to cases where personal data is exchanged in return for access to digital content and taken issue with some of the wording of the Commission's proposals.

"The EU proposal applies to a broader range of digital provision than is covered in the digital content provisions of the Consumer Rights Act," the UK government's consultation paper said. "It extends the scope to contracts where the supplier supplies digital content in exchange for the consumer 'actively' providing data 'such as name and e-mail address or photos, directly or indirectly to the supplier for example through individual registration or on the basis of a contract which allows access to consumers’ photos'."

"The concept of the consumer 'actively providing' access to data by way of payment for free content is not clear in the directive. For example would it require a positive action on the part of the consumer, or does it imply more than a consumer simply agreeing to make their data available?" it said.

"An extension to free services may mean that the obligations and remedies proposed in the event of failure to comply with the contract are not proportionate in the circumstances. It is possible these might unduly inhibit this often low margin but very innovative business model. We do however note that financial remedies would not apply to free content," the UK government said.

The UK government's consultation is open until 10 February. 

We are processing your request. \n Thank you for your patience. An error occurred. This could be due to inactivity on the page - please try again.