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28 January 2016

Online sales and digital content: consumer law beyond the consumer rights act 2015

The Consumer Rights Act 2015 ('CRA') came into force on 1 October 2015. The CRA saw for the first time consumer rights legislation in relation to 'digital content' that matches broadly the law in relation to the supply of tangible/ physical goods.

The law continues to seek to keep pace with technology. The European Commission has published not one but two draft directives intended to harmonise further key aspects of the sale of digital content to consumers and the online sale of goods to consumers. If passed as published, certain key aspects of the CRA which have been in force for only a few months would require amendment.

In overview, the proposed changes would have the effect of reducing consumer protection in the UK in some areas but increasing it in others. In addition, the creation of specific and distinct online and digital content rules would sit at odds with the UK government's push to simplify consumer contract rules and for there to be consistency across the various sales mediums.

The intended reforms would include:

Digital Content
  • the introduction of statutory rights and remedies for digital content supplied in exchange for non-monetary payment e.g. where the consumer provides personal data in return for digital content such as an app. Where such non-monetary consideration is provided, on termination of that agreement the trader will have to refrain from any further use of the data;
  • clarifying that cloud computing and the use of social media does fall under digital content, meaning consumers will have remedies in relation to these as well;
  • dictating that the most recent version of any digital content will be required to be supplied to consumers and, unless otherwise agreed, will have to be supplied instantly. Where digital content is not supplied within the time agreed, consumers will have an automatic right to terminate;
  • confirming that issues of accessibility, continuity and security will be factors to be considered in assessing fitness for purpose; and
  • requiring that traders will be responsible for ensuring integration into the consumer's digital environment is successful.
Online Goods
  • the removal of the short-term right to reject faulty goods but the extension of the period within which a defect is presumed to have been present on delivery from six months to two years;
  • the requirement for a trader to obtain the consumer's express acceptance of defects to avoid liability for known defects rather than (as is the case now), drawing them to the consumer's attention or relying on them being obvious;
  • providing the consumer with the statutory right to withhold payments until defects were fixed; and
  • restricting deductions to refunds on rejection after the failure of the option of repair or replacement only to where there has been use in excess of "regular use".
  • The European Commission will shortly publish impact assessments for the draft directives and there will be a first reading of the draft directives in the European Parliament. It is relatively early days but the CRA (heralded as the most significant change to consumer law for a generation) could be subject to material changes in a fraction of the time. 

This article was written by Jamie Cartwright. For more information please contact Jamie on +44 (0)1483 252618 or