Digital contracts for Europe
Buying online can be quick and cheap for consumers. However, when problems arise, consumers are often not aware of their rights.
To solve these problems, the European Commission adopted two important proposals. One proposal concerns contract rules on the supply of digital content (e.g. streaming music) and another proposal concerns contract rules on the online sale of goods (e.g. buying a camera online).
These proposals will provide the same set of rules for all 28 EU countries.
State of Play
The digital contracts proposals were adopted by the Commission in December 2015 and are currently under negotiation by co-legislators.
On 8 June 2017, the Council adopted its position on the proposal for a directive on contract rules on the supply of digital content.
The European Parliament is continuing its work on both the proposal for a directive on contract rules on the supply of digital content (more information on the ongoing procedure) and on the proposal for a directive on contract rules for the online and other distance sales of goods (more information on the ongoing procedure).
Negotiations between the Council and the European Parliament will begin once both institutions have adopted their positions.
Purchasing digital content
Digital content refers to products such as videos, music, software or live sports streaming events. Problems that might arise from the online purchase of these products include
- downloading music that would not play on your device
- buying software that suddenly stops working
Buying and selling goods online
For selling goods online, there are also legal differences between EU countries which keep businesses and consumers from selling and buying cross-border. These differences include consumer rights when goods are defective.
As a result, businesses have to spend time and money to find out about foreign consumer contract laws when selling cross-border and to adapt contracts accordingly.
Many of consumers' top concerns about buying online are about contract rights: not receiving their order, getting a wrong or damaged product or getting a faulty product repaired or replaced.
Harmonising rules for purchasing digital content
There are no EU-wide rules for faulty digital content. Some EU countries have already started designing their own legislation. We should avoid having 28 different sets of rules for digital content sold online.
For a real digital single market to take root, a single set of rules would bring legal certainty and thus help businesses expand their activities to foreign markets while giving consumers trust to embrace the benefits of the digital single market.
Harmonised rules for digital content products will reduce the costs for traders and encourage them to expand cross-border. They will no longer need to deal with contract law differences in each EU country they wish to sell to. Consumers will know what they can expect when they buy digital content online, and that they have rights if the product is faulty.
Facts and figures
- People do not buy from websites in other countries because they do not trust that it will work
- at least 70 million consumers have experienced one or more problems with just four popular types of digital content (music, anti-virus, games and cloud storage) over the last 12 months
- only 10% of consumers experiencing problems received remedies. As a result of those unresolved problems, consumers in the EU have suffered a financial and non-financial detriment estimated in the range of €9 - 11 billion
- traders do not sell because they are put off by the legal complexity. Contracts for supplying digital content are categorised differently from one country to another, either as sales contracts, services contracts or rental contracts. As a consequence, the remedies for consumers vary between countries
- only 15% of EU consumers buy online from other EU countries, while almost three times as many (44%) buy online in their own country
- only 12% of EU retailers sell online to consumers in other EU countries, while more than three times as many (37%) sell online in their own country
Projected effects of harmonised rules
As a result of removing contract law-related obstacles, it is estimated that
- at least 122, 000 more businesses will start selling online to other EU countries
- between 8 and 13 million additional consumers will start buying online from other EU countries
- EU GDP will increase by €4 billion from its current level
- increased competition will drive consumer prices down throughout the EU. This will lead to additional consumer welfare and is estimated to increase household consumption in the EU by €18 billion from its current level