New consumer rights in B2C transactions for digital content
- Suppliers of digital content should consider reviewing their terms and conditions ahead of the Consumer Rights Act 2015 coming into effect on 1 October 2015.
- The Act introduces new rights which cannot be excluded or limited. It also introduces a new right in respect of damage caused by digital content which can be excluded or limited in so far as it is fair to do so.
- Suppliers should also consider training of staff and a review of their procedures for dealing with complaints ahead of 1 October deadline. This should assist in minimising any additional liability.
Consumer Rights Act 2015
From 1 October the Consumer Rights Act 2015 will automatically provide consumers with new rights when they purchase “digital content”. The latter is broadly defined as “data which are produced and supplied in digital form” and would include apps, games, music, electronic books and other web content. These new rights will apply irrespective of the express terms of any contract that the consumer agrees to.
The new rights will apply if a consumer has paid for the content, it’s supplied free with other goods, services or digital content that the consumer has paid for, or any gift voucher or virtual currency is used in its purchase. It will not, with one exception noted below, apply to the downloading of a web site or other free services.
The general scheme of the Act is to provide for the same rights to apply to digital content as currently apply to goods:
- Digital content must be of satisfactory quality according to the expectations of a reasonable person taking into account price, description and other circumstances. So, by way of example, the standard to apply in respect of a 1p app will not be the same as applies to an app worth £20. As with goods, there is no breach of this standard if the consumer was made aware of defects before it acquired the digital content eg through use of a trial version.
- Digital content must be fit for a particular purpose that the consumer makes known to the seller. The requirement to “make known” suggests that there has to be some active knowledge by the seller, rather than say an email sent immediately before purchase informing the seller of the consumer’s intentions.
- Digital content must be as described. So for example, they must comply with any description of functionality or compatibility. That said, the explanatory memorandum to the Act provides that there is nothing to stop a seller enhancing functionality as long as the core description of the content remains the same.
- The seller has the right to supply the digital content.
Each of these provisions also applies in respect of any update or upgrade to digital content.
Certain information is already to be provided by the seller to the consumer prior to contract under the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013. The Act provides that such information will now form a term of the contract between the consumer and seller.
Remedies in respect of new rights
While a consumer cannot reject digital content, a consumer may:
- Require a full refund if the seller has no right to supply the digital content
- Require repair or replacement in the case of breach of satisfactory quality, fitness for purpose or failure to match description. Where a repair or replacement is not effected within a reasonable time or a repair or replacement is not possible, the consumer can require a price reduction, potentially of the full amount.
- Damages up to the amount of the price for the digital content if the digital content does not match description.
Any attempt by a seller to exclude liability in respect of these rights will be void.
Damage caused by digital content
This right applies regardless of whether the content is paid for or is provided for free provided that:
(a) the digital content causes damage to a device or digital content belonging to a consumer; and
(b) the damage is of a kind that would not have occurred if the seller had exercised reasonable skill and care judged by the standard of the seller’s profession.
Damage could for example include introduction of a virus. In these circumstances the Consumer Rights Act provides that the seller must repair the device at its cost or offer compensation to the consumer.
A seller can exclude or limit its liability, but only in so far as it is fair to do so.