Avid readers of this blog will be aware that the government published the draft Consumer Rights Bill in June 2013. The aim of the draft Bill is to consolidate, simplify and modernise consumer law.
Avid readers of this blog will be aware that the government published the draft Consumer Rights Bill in June 2013. The aim of the draft Bill is to consolidate, simplify and modernise consumer law. It includes for the first time a new consumer rights regime for digital content, including new rights and remedies. Digital content is defined as "data which are produced and supplied in digital form" and includes computer programs, applications, games, music videos and texts.
Over the summer, the Business, Innovation and Skills Committee collected views and evidence on the draft Bill from businesses and consumers. The Committee has now published its recommendations to the government, including modifications to the draft Bill. The Committee's conclusions are summarised below in relation to the provisions surrounding digital content:
A bespoke regime for digital content – there is concern that the government has failed to communicate clearly its intention to create a bespoke set of consumer rights and remedies for digital content.
Digital content to be of satisfactory quality – the draft Bill introduces a new statutory requirement that digital content must be of "satisfactory quality". One of the criteria for assessing quality is whether the digital content is "free from minor defects". This aspect of the draft Bill has caused particular concern amongst businesses, as digital content and software are rarely entirely free of bugs and errors. The government's intention as to whether "freedom from minor defects" would be applicable depends on the complexity of the digital content and reasonable expectations of quality. For example, there are some circumstances in which a reasonable consumer might expect digital content to be free from minor defects. The Committee has recommended that this should be made clearer.
Digital content to be as described – the draft Bill includes a requirement that digital content must match its description, and also must match any trial version. There is a concern that, if this is implemented, there is a risk that traders and manufacturers of digital content will cease to provide trial versions that have only limited functionality.
Liability for substandard digital content – the government wants the "quality" of digital content to be assessed at the time of delivery to the consumer's device (or to the consumer's service provider, if sooner). This raises important questions of liability. Delivery of digital content might depend on a number of factors including the consumer's device, third party services such as internet or network access services from the consumer's ISP, as well as the content provider's own services for example interactivity or subscriptions to online content. If the fault lies with the consumer's device or with the consumer's ISP, then, under the draft Bill, the content provider would not be liable. However, the Committee points out that where a provider's offering is a mixture of both digital content and related services, then it's unclear whether the provider should be liable for sub-standard content under the Bill's "digital content" or "services" regime. The distinction is important because the two regimes impose different liability standards and afford the consumer different remedies. Consumer services must be provided with "reasonable skill and care" while digital content must be of "satisfactory quality" and match its description. The Committee wants the government to clarify the liability standard that should apply to a content provider's "related" services, and also to assess the business cost and impact business of applying a "satisfactory quality" standard – instead of one of "reasonable skill and care" - to these services.
Statutory Remedies – one of the Committee's major criticisms of the draft Bill is reserved for the inconsistency in the statutory remedies that are available for consumers. The remedies for faulty digital content differ from those for goods. Buyers of a faulty piece of tangible digital content, such as a CD, are entitled to a refund whereas buyers of an intangible piece such as a download, are not. A consumer who has bought intangible digital content which turns out to be faulty only has the right to a full refund if the trader did not have the right to provide the digital content.
Stay tuned for further developments on the draft Bill on this blog.
Over the summer, the Business, Innovation and Skills Committee collected views and evidence on the draft Bill from businesses and consumers. The Committee has now published its recommendations to the government, including modifications to the draft Bill. The Committee's conclusions are summarised below in relation to the provisions surrounding digital content:
A bespoke regime for digital content – there is concern that the government has failed to communicate clearly its intention to create a bespoke set of consumer rights and remedies for digital content.
Digital content to be of satisfactory quality – the draft Bill introduces a new statutory requirement that digital content must be of "satisfactory quality". One of the criteria for assessing quality is whether the digital content is "free from minor defects". This aspect of the draft Bill has caused particular concern amongst businesses, as digital content and software are rarely entirely free of bugs and errors. The government's intention as to whether "freedom from minor defects" would be applicable depends on the complexity of the digital content and reasonable expectations of quality. For example, there are some circumstances in which a reasonable consumer might expect digital content to be free from minor defects. The Committee has recommended that this should be made clearer.
Digital content to be as described – the draft Bill includes a requirement that digital content must match its description, and also must match any trial version. There is a concern that, if this is implemented, there is a risk that traders and manufacturers of digital content will cease to provide trial versions that have only limited functionality.
Liability for substandard digital content – the government wants the "quality" of digital content to be assessed at the time of delivery to the consumer's device (or to the consumer's service provider, if sooner). This raises important questions of liability. Delivery of digital content might depend on a number of factors including the consumer's device, third party services such as internet or network access services from the consumer's ISP, as well as the content provider's own services for example interactivity or subscriptions to online content. If the fault lies with the consumer's device or with the consumer's ISP, then, under the draft Bill, the content provider would not be liable. However, the Committee points out that where a provider's offering is a mixture of both digital content and related services, then it's unclear whether the provider should be liable for sub-standard content under the Bill's "digital content" or "services" regime. The distinction is important because the two regimes impose different liability standards and afford the consumer different remedies. Consumer services must be provided with "reasonable skill and care" while digital content must be of "satisfactory quality" and match its description. The Committee wants the government to clarify the liability standard that should apply to a content provider's "related" services, and also to assess the business cost and impact business of applying a "satisfactory quality" standard – instead of one of "reasonable skill and care" - to these services.
Statutory Remedies – one of the Committee's major criticisms of the draft Bill is reserved for the inconsistency in the statutory remedies that are available for consumers. The remedies for faulty digital content differ from those for goods. Buyers of a faulty piece of tangible digital content, such as a CD, are entitled to a refund whereas buyers of an intangible piece such as a download, are not. A consumer who has bought intangible digital content which turns out to be faulty only has the right to a full refund if the trader did not have the right to provide the digital content.
Stay tuned for further developments on the draft Bill on this blog.