Consumer rights for digital content

Many EU countries, including Ireland, do not have explicit rules on digital content.

This can make it difficult for consumers to take action against a business that provides digital content if things go wrong e.g. if the product is faulty or does not have the quality that the consumer would reasonably expect.

To address this the EU approved new rules to make sure that consumers have a right to refund, repair or replacement for faulty digital content.

The new rules are in the Digital Content Directive.

The Directive must become law in Ireland before 1 January 2022.

The Directive gives consumers protection when it comes to digital downloads that fail to work i.e. are corrupt.

Consumers are entitled to a repair or replacement if the digital content is faulty and even compensation if other downloads or devices are affected.

What is ‘digital content?’

Digital content means data which is produced and supplied in digital form.

This means the consumer has rights in relation to anything they download or stream, including apps, software, ebooks, games, ringtones or music.

It can be something online they have paid for, something given to them for free (for example, mobile applications or ‘apps’) and any content supplied on a physical medium, such as a CD or DVD.

What is the current position?

In practice it can be difficult to apply consumer laws to digital content.

This is because:

• Most consumer law was written in a pre-digital world and so some of the terminology is dated and is not fit to be applied to digital content
• Current consumer law does not take account that digital content and software products are dynamic by nature. For example, by law, goods must always meet their original description. But digital content can be regularly updated to replace obsolete or vulnerable software. In this case the digital content no longer meets its original description

What rights currently apply?

If the digital content is in a tangible format, the consumer has the same rights as when buying other goods.

Examples of tangible digital content are:

• A film that is on a DVD or CD
• Software that’s pre-loaded onto a device such as a phone or tablet
• Software that is embedded in a product they buy such as smart appliance (like a smart fridge).

For intangible digital content (content that is downloaded or streamed), the consumer has a certain level of protection.

More general consumer and contract law applies.

However, consumer rights are not as strong under consumer legislation when the product has a quality problem (for example, the downloaded music doesn’t play on a device or the computer software stops working).

However, this will change under the Digital Content Directive – see below.

The consumer still has some protections under consumer law and the following is a summary of their main rights when buying digital content:

Right to information before they buy

Before they buy digital content online the consumer has the right to the following information:

• The main characteristics of the product as well as its functionality and compatibility with their hardware and software
• If any technical or copyright protection measures apply to the item, for example a limit or ban on making copies
• The existence of their right to withdraw from contract and how they can avail of it

This information must be given to the consumer in a plain and understandable way in accordance with the Consumer Rights Directive

Giving consent to begin download or stream to pay

The consumer must give their express consent to begin downloading or streaming digital content before they can be charged any costs.

Your business must make it clear to the consumer that they will be charged for the digital content before payment is taken.

Confirmation that they have entered a contract

When the consumer enters into the contract with you and agrees to pay, confirmation should be sent by you on a durable format such as email.

This should be sent immediately before the digital content is supplied (before streaming or downloading begins).

What if digital content is faulty?

Under the new Digital Content Directive content must be:

• of satisfactory quality
• fit for purpose, and
• as described by the seller

If digital content does not meet these criteria and develops a fault, the consumer has the right to have their digital product repaired or replaced.

Cancelling a digital download

Under the Consumer Rights Directive, digital downloads are neither goods nor services, meaning the law is a little different.

If a consumer wants to download something within 14 days of buying it (what is known as the ‘cooling off’ period), they will have to give their consent to waive the 14-day cooling off period.

If they do not give their consent, the 14-day cooling off period still applies and they will not be able to download your digital content until this period has ended.

This is a safeguard for your business is to stop them from changing their mind after they have downloaded the content.

The consumer cannot cancel once the download or streaming begins.

Nor can they cancel if they have already used the content.

Repair or replacement?

The retailer from whom you purchased the digital content has one opportunity to replace any goods or digital content that are faulty before you can claim a refund.

You can choose whether you want the goods to be repaired or replaced, but the retailer can refuse if they can show that your choice is disproportionately expensive compared with the alternative.

Partial refund

The consumer may be entitled to a partial refund in the following circumstances:

• The cost or repair/replacement is disproportionate to the value of the digital content.
• Repair/replacement is impossible.
• Repair/replacement would take unreasonably long.
• Repair has been unsuccessful.

If the consumer doesn’t want a refund and still want their product repaired or replaced, they have the right to request that your business makes further attempts at repair/replacement.

Compensation

Your business must compensate the consumer if any device or other digital content they own is damaged as a result of the faulty digital content they’ve downloaded.

This only applies where that damage wouldn’t have occurred had ‘reasonable care and skill’ been exercised in the provision of the digital content (even if that content was provided for free).

Refunds

If the consumer has made a genuine mistake with a download purchase, they should contact your business to see if they can get a refund or exchange the download for the one they want.

Their right to a refund will be determined by your terms and conditions, as some retailers offer refunds or exchanges as a gesture of goodwill here; even if the consumer has waived their right to cancel.

Typically, any goods or services which are sold to consumers online, at a distance, or away from the business premises, must allow for a minimum 14 day ‘cooling off’ period during which the contract can be cancelled (either 14 days from receipt of goods or from the date of entering into a contract for services).

14 days is the minimum cooling-off period that a seller must give.

There are, however, certain products and services that do not qualify for the 14-day cooling off period:

• Exempted products include CDs, DVDs or software where the seal has been broken; also perishable items and tailor-made or personalised items.
• Exempted services include leisure service activities on specific dates such as car hire, wedding venues, theatre tickets for specific performances, etc. For these services, the consumer has the same cancellation rights as if they were signing the contract in person.

For digital downloads, consumers will need to waive their cancellation rights before digital content can be provided.

This means that once a consumer/customer has downloaded the content, then they have given up their consumer rights to a refund.

Consumers will typically waive these cancellation rights when they purchase the digital goods.

This can be done through some form of verification box (such as a tick box) for consumers to acknowledge that they have waived their consumer rights to a refund for digital content.

Corrupted Digital Content

Please bear in mind, that the Consumer Rights Directive gives consumers protection when it comes to digital downloads that fail to work (i.e. digital downloads that are corrupt).

Consumers are entitled to a repair or replacement if the digital content is faulty and even compensation if other downloads or devices are affected.

For a general understanding of consumer rights read our Doing business with consumers guide