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Scope of the proposed Directives

(distance sales (ODSDir) + supply of digital content

(DCDir))Prof. Matthias E. Storme

Institute for commercial and insolvency law

KU Leuven

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Common characteristics

- Both deal with ‘contracts’ (with a classical definition of ‘contract’)

- Presuppose that the applicable law is the law of a MS- No cross-border requirement, includes domestic contracts- Only B2C contracts:

- > lack of protection of SME’s, non-profit organisations, etc.- > does not apply in P2P (or C2C) transactions – new sharing economy !??- Definition of consumer unclear as to mixed/dual purpose acquisitions

(only a recital)- Unilaterally mandatory (in favour of the consumer) (art. 18

ODSDir and art. 19 DCDir)- However art. 16 ODSDir and art. 17 DCDir grant the supplier

a ‘right of redress’ against earlier links, - but rules left to national law …: does it say anything ? Naked

and to be vested ... (last slide)

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Specific rules ODSGDir

- Object:- only goods (excl. carriers of digital content), no service contracts or

service part of sales contracts, but incl. goods to be manufactured

- Consideration:- in exchange for a price < only sales

- Sales method :- only distance sales (incl. online sales) defined in art. 2(e) > further

fragmentation of sales law (CISG, national B2B, P2P, B2C offline (distance sales now excluded from other consumer Directives, ….). Especially criticized is difference between distance and non-distance B2C sales of the same goods. Higher protection allowed in non-distance sales !?

- excluding sales by way of execution or otherwise by the authority of law (2(d))

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Specific rules SDCDir- Object:- ‘supply’ digital content irrespective of the carrier/medium of

transmission, incl. digital services; incl. services in relation to content created by the consumer itself

- > Art. 2 (1)(a) enumerates 3 types of (supply of) digital content- a) data produced in digital form, eg video (photos, movies etc.), audio

(music etc.), applications, digital games and any other software (incl. databases, e-books, …)

- b) service allowing creation, processing or storage of digital data provided by the consumer

- c) service allowing sharing of / interaction with digital data provided by other users of the service

- > irrespective of the method: durable medium, download, streaming, cloud, host providing, …

- Excluded / not considered as digital content: e-communication healthcare, gambling, financial services , and other services with significant human intervention (eg non-machine translation) where only the output is delivered digitally (art. 3(5))

- Excluded: ‘smart goods’

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Specific rules SDCDir

- Irrespective of the qualification of the contract- > sales, licensing, rental, service contract, ….: regardless of

temporary or definitive character of the right acquired; including product designed according to consumers’s specifications (art. 3(2))

- But qualification will remain relevant under national law for non-harmonised aspects

- Covering also the service level agreement concerning the digital content itself, but not covering services not functioning as carrier (such as telecommunication services)

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Specific rules SDCDir

- Consideration:- Supplied in exchange for a price and/or for personal data (except

where data collected only to meet legal requirements, art. 3 (4))

- Sales method:- Not limited to distance sales

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“Full” harmonisation- “Full” harmonisation: raises the question of what exactly

is regulated and what not (as with the CRD 2011/83). - < does not exclude that the consumer acquires from the eller a direct action

against an earlier chain- Within the scope: no place for overriding mandatory law

nor public policy exception- Some national rules on aspects not regulated may

interfere- eg avoidance for mistake may lead to higher protection- Is the good faith exception in or out ? If out > disparity- right to damages for non-performance (only “economic damage to

the digital environment” is “in”)- No full harmonisation for commercial guarantees: higher

level of protection possible (art. 15 ODSDir)

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“Full” harmonisation- Matters not regulated: apply principles of equivalence and

effectiveness (duty to give full effect, art. 4(3) TFEU)- quid granting consumers more rights on the basis of extracontractual

liability (concurrency of actions) ? Unlimited concurrency against effet utile ?

- National language rules ? (for unfair contractual langage requirements, see Unfair Terms Directive)

- Or regulated only in principle: idem (apply principles of equivalence and effectiveness (duty to give full effect, art. 4(3) TFEU)

- > They need some national dressing by national law- Some matters not fully harmonised, ag liability for “economic damage to

the digital environment” in art. 14 DCDir- Right of redress

- > Limitation periods are governed by national law, but may not be shorter than 2 years from the time “relevant for establishing conformity” (as determined by art. 8 ODSDir) ((art. 14 in fine ODSDir)