Digital contract law or eliminating legal uncertainty in providing cross-border digital content / services



June 3rd, 2020

The European Union's strategy for the digital single market aims to develop the potential of B2C digital markets.

The adoption of Directive (EU) 2019/770 on certain aspects concerning contracts for the supply of digital content and digital services ("Directive 2019/770 on digital content") and of Directive (EU) 2019/771 on certain aspects concerning contracts for the sale of goods ("Directive 2019/771") confirms not only the harmonization of the internal rules of the Member States in the field of E-Commerce with a view to increasing consumer protection, but also the creation of digital contract law.

Who is Directive 2019/770 on digital content addressed to?

  • providers of online platforms, insofar as they offer digital content / service directly to the consumer;

  • economic operators that provide or undertake to provide the consumer with digital content or a digital service.

What is the scope of the Directive 2019/770 on digital content?

  • software, applications, video files, audio files, music files, digital games, electronic books or other electronic publications;

  • digital services that allow the creation, processing or storage of data in digital format or access to them;

  • electronic files, necessary in the context of 3D printing of goods - but not goods produced using 3D printing technology;

  • software in the form of services, such as video and audio sharing and other types of file hosting, word processing or games offered in the cloud environment and social communication platforms;

  • the digital content / service that constitutes a medical device, such as health applications, which can be obtained by the consumer without being prescribed or provided by a medical professional;

  • digital content provided on material, such as DVDs, CDs, USB flash drives and memory cards;

  • material support, provided that the material support serves exclusively as a support for digital content,

  • meaning products / services that are subject of contracts for the provision of digital content and digital services, either in consideration of a price or of the disclosure by the consumer of his personal data.

    What is the difference between the contract for the supply of digital content / service and the contract for the sale of goods with digital elements?

    While the Directive 2019/770 on digital content concerns digital content / services, the Directive 2019/771 generally applies to contracts for the sale of goods, but goods with digital elements are also included in the scope of application of the latter.

    The contract for the provision of digital content / service has as object the digital products mentioned above and falls under the scope of Directive 2019/770 on digital content. Instead, goods with digital elements refer to goods that incorporate digital content or a digital service or are interconnected with them, so that, in the absence of that digital content or digital service, the goods cannot fulfill their functions. For example, a smart TV that incorporates a video application, a smart watch or a video interphone - the common element of these goods is the interconnected / embedded digital element.

    The development of new technologies can lead to many question marks regarding the legal framework and the establishment of the legal framework applicable to a contract for the sale / supply of different types of products / services. For example, in case:

    • the absence of such digital content or embedded or interconnected digital service does not prevent the goods from fulfilling their functions - Directive 2019/771 applies, and not Directive 2019/770 on digital content;

    • the consumer concludes a contract for the supply of digital content / service which is not part of the contract for the sale of goods with digital elements - Directive 2019/771 applies, and not Directive 2019/770 on digital content.

    The particularities of each digital product / service are of nature to lead to the inclusion of the respective sales / supply contract either in the scope of Directive 2019/770 on digital content, or of Directive 2019/771. Innovation will thus lead the process of transforming digital law.

    The Directive 2019/770 on digital content introduces objective and subjective compliance requirements for digital content / services, regulates issues related to trader liability, corrective measures in case of non-provision and non-compliance (for example, downloading music content that does not work on the consumer's device, the acquisition of software that suddenly ceases to operate), aspects regarding the termination of contracts and ways of reimbursement by the trader.

    The Directive 2019/770 on digital content and Directive 2019/771 transform the paradigm in the field of contracts concluded in E-Commerce. Currently, national law includes contracts concluded by electronic means by Law no. 365/2002 on electronic commerce, but the regulation of digital content / services will consolidate a true digital contracts law.

    Although the Directive 2019/770 on digital content aims to harmonize the rules applicable to digital contracts, it leaves in the regulatory power of Member States issues such as the conclusion, validity, nullity or effects of contracts or the legality of digital content or digital service, and even determining the legal nature of this contract. The Romanian legislator has not yet adopted measures for transposing these directives, the deadline for transposition being July 1st, 2021.

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