On 1 October 2015, the Consumer Rights Act 2015 (the “Act”) comes into force. It represents the most extensive reform to consumer law in the UK for decades and sweeps away much existing legislation in favour of a largely ‘one stop shop’ for consumer legislation.
Although it could be said that the Act largely consolidates existing consumer law relating to goods and services, the impact in relation to the supply of digital content to consumers is far more pronounced. The law is seeking to catch up with the digital age.
Existing law has seen the courts apply the statutory protections afforded to goods (i.e. obligations of satisfactory quality, fitness for purpose, compliance with description) to tangible media which contains defective digital content. However, where digital content has not been provided in a tangible form (i.e. download or stream), the position has been much less clear.
This uncertainty has been addressed under the Act. Digital content is a new category of product and is to be treated similarly to tangible goods and the provision of services. Accordingly, contracts for the supply of digital content to consumers will be treated as including implied terms as to satisfactory quality, fitness for purpose, trader’s right to supply, compliance with description and compliance with pre-contract information. If digital content supplied to a consumer by a trader does not meet those obligations (irrespective of whether such terms were agreed expressly), the consumer will have a statutory recourse under the Act. That right of recourse will be to request a repair or replacement and, if repair or replacement is impossible or not properly carried out, a right to a price reduction. That price reduction may be as much as 100% of the price paid.
Digital Content: Key points:
- only an individual can claim rights as a consumer (removing the ability of businesses to claim such rights in certain circumstances);
- the scope of the Act extends to cover content paid for with a facility (i.e. token or virtual currency) that was originally purchased with money;
- liability for damage caused by defective content will exist even where it’s free;
- the digital content must meet the required quality standards at the point of transmission. The consumer has six years in which to bring a claim;
- in contracts for the transfer of data, the trader must ensure that the consumer can use the digital content as per the contract for the agreed period or, if none has been agreed, a reasonable time;
- modifications to digital content must meet standards of satisfactory quality, fitness for purpose and description. Time runs on a claim from the date of original supply not from modification;
- a consumer will not be able to ‘reject’ wholly digital content (which exists as a right in relation to goods) but may be entitled to a price reduction up to the full amount paid;
- unlike goods where the trader gets one opportunity to repair or replace, the trader is not limited to a single repair or replacement.
The Act, insofar as it relates to digital content, shows the law to be moving with the times. Indeed, the Government has reserved the rights to extend consumer protection in the future to reflect changing consumer practices. The changes bring the digital world in line with the world of physical goods and services. Those traders, be they consumer facing or in a chain which ultimately delivers to consumers, should ensure that terms and conditions and trading practices reflect what will be the law from 1 October 2015.