From 1 October contracts between businesses and consumers involving a supply of digital content will be affected by the Consumer Rights Act 2015. The CRA, passed in March, introduces a completely new set of rights and remedies for consumers purchasing digital content. It marks an important change for any organisation dealing with consumers. We take a look at the new rules affecting digital content, or "data which are produced and supplied in digital form".
What is (and Is not) digital content?
As used in the CRA (as well as the 2013 regulations governing how contracts with consumers are entered into, see more here) "digital content" covers a wide range of purchases. For example, any of the following in digital format would be classed as digital content: books, computer software, audiovisual content, mobile apps, computer games and purchases within computer games. Also covered are software programmes incorporated into goods, such as software pre-installed on a laptop, music on a CD, or built-in software in appliances, toys, vehicles etc.
But, in contrast, digital content does not include an online shop selling goods, online banking services or a mobile service contract.
Why the need to deal with digital content specifically?
Digital content previously fell into an uncertain area between goods or services. The rapid growth of this type of purchase persuaded legislators to come up with a tailored set of rules for sales of digital content, and specific provisions dealing with situations where a combination of digital content with goods or services is supplied.
What are the new rights?
As with goods and services, the CRA gives consumers a set of statutory rights that cannot be excluded. The digital content must be:
- of satisfactory quality
- fit for any particular purpose made known to the trader
- as described.
In addition, the pre-contract information provided by a trader under the 2013 regulations is to be treated as included as a term of the contract.
And as with goods, the CRA brings in a statutory implied term that the trader has the right to sell or transfer the digital content to the consumer.
And the new remedies?
Alongside the new rights the CRA sets out the statutory remedies available to a consumer where there has been a breach of the consumer's statutory rights. At first, the consumer may request a repair or replacement, where possible. This must be done promptly and without inconveniencing the consumer, failing which the back-up remedy of a price reduction is available. The price reduction can be up to the full amount paid. Unlike a goods contract, there is no right to reject digital content. Although in a mixed supply of digital content and goods, such as a music CD, defects in the digital content will trigger the remedies available for goods.
An additional remedy is available for digital content which entitles the consumer to claim for damage caused to his own hardware or software by the digital content. This is available to a consumer even where the digital content is supplied for free.
It will take a while for the rules to bed down and become familiar to both business and consumers. Until then, you may find it helpful to refer to the guidance for business that the government has made available.