Today techUK launched a top-level briefing paper in response to the European Commission proposal for a Draft Directive on contracts for the online supply of digital content. The paper is available for download at the bottom of this page.
Regardless of the EU referendum outcome, the Digital Content Directive will have an impact on businesses in the UK selling goods and service in the EU’s Digital Single Market. The UK, as Europe’s leading digital economy, has previously and could continue to benefit most from the opening up of a true Digital Single Market of 500 million consumers and millions of businesses could contribute €415 billion per year to the European economy and create 3.8 million jobs. The UK Digital Sector exports over £18bn to Europe out of a £32bn global total.
To businesses, the Draft Directive has the potential to clarify consumer rights across Europe and to make it easier to trade across European Union Member States. To consumers, the Draft Directive has the potential to clarify consumer rights and adapts the law to the reality of European consumers who increasingly buy and move across European borders. Getting the Draft Directive right means to make it an instrument to deliver improved legal simplicity, clarity and certainty for businesses and consumers.
However, the Draft Directive as it currently stands does not deliver against these objectives - risking the creation of legal uncertainty and unfeasible liability regimes, which could stifle the emergence of new online content and be damaging to consumer trust and businesses. The Draft Directive needs amendment to ensure it does not weaken innovation and damage economic growth.
techUK has therefore identified five proposals to underpin targeted amendments to the European Commission’s Digital Content Directive:
- Ensure a clear legal framework that avoids conflicts with existing legislation. Overlapping or conflicting legislation is problematic as it poses legal uncertainty for businesses and for consumers. The Commission should ensure the Draft Directive does not conflict with existing legislation (such as the UK Consumer Rights Act (2015), General Data Protection Regulation (2016), and European Unfair Contract Terms Directive) and only introduce new complementary legislation where there is evidence of consumer harm and the impact on the Digital Single Market goals has been objectively measured.
- Specify the scope of the Directive and clarify definitions. Ambiguity or rigidity regarding the definitions and the scope of the Draft Directive can have a negative impact upon both consumer trust and fostering a business-friendly environment. Definitions and exceptions must be sufficiently clear and allow suppliers to foresee and actively manage regulatory compliance and risk. techUK recommends further clarification of the definitions and scope of the Draft Directive (such as digital content, digital service, data, and digital supplier) to increase consumer trust and create a business-friendly environment.
- Be precise about differences between financial payment and provision of data. The Draft Directive does not differentiate between liability and obligations of digital content supplied in return for financial payment and for provision of data. This lack of differentiation will likely lead to repercussions for consumers who prefer lower quality freemium content and services, as well as less innovation in online business models, and a stifling of the emergence of new online content, applications and services. techUK urges the scope of the Draft Directive not to be extended beyond the consideration of price and allow time for an analysis of business models and consumer detriment from the exclusion of these contracts.
- Facilitate customer updates in consumer-friendly formats. The Draft Directive does not reflect the nature of digital content and rapid technological and commercial evolution in stipulating the notification in advance on a durable medium, without proportionality to the modification, for the supplier to modify the digital content. This stipulation could impact upon existing business practices and consumer experience in the case of time sensitive issues. techUK recommends the Draft Directive be amended to allow notifications to be consumer-friendly and proportional to the modification.
- Maintain choice for consumers and avoid higher prices for consumers. The Draft Directive aims to give consumers the right to respond to competitive offers and switch between suppliers. However, the provision within the Draft Directive that after 12 months consumers have the right to terminate long-term contracts, or a combination of contracts which total more than 12 months, has the potential unintended consequences of increasing the monthly cost of digital content and services, and creating uncertainty for bundled services or goods. techUK urges this provision to be removed from the Draft Directive to allow customers the freedom to contract on the terms they choose.
techUK's FULL position paper regarding the EU Commission’s Draft Digital Content Directive can be downloaded below.
techUK works on a range of initiatives flowing from the Digital Single Market strategy. For more information on techUK’s work on the Digital Single Market please contact Shane Murphy.