EU proposals could contradict new UK consumer protection laws on sale of digital content

The contradiction could come in the rights consumers would enjoy when accessing digital content supplied by online traders.

The UK's Competition and Markets Authority (CMA) confirmed last month that businesses selling or licensing digital content will not have to honour most "rights and remedies" that consumers will have under new UK consumer protection laws where those consumers exchange access to their personal data rather than money in return for that content.

Most provisions in the Consumer Rights Act are set to come into force in the UK on 1 October, including the rules in relation to supply of digital content, after implementing legislation (17-page / 98KB PDF) was laid before parliament by the UK government.

However, the European Commission earlier this year outlined its intention to set "harmonised EU rules for online purchases of digital content" in its digital strategy. It said those rules would allow businesses "to rely on their national laws based on a focused set of key mandatory EU contractual rights for domestic and cross-border online sales of tangible goods".

It has identified new EU rules as necessary to address problems with trade across the trading bloc that it says are caused by "differing contract rules that apply in cross-border sales within the EU".

In June the Commission backed up its policy intentions by launching a consultation on possible new EU contract rules for online purchases of digital content and tangible goods. The consultation closes on 3 September.

According to the consultation paper, the new EU contract rules could apply in circumstances where businesses supplying digital content to consumers are paid money in return for that content or where they charge no fee but instead obtain access to those customers' personal data through the agreed transaction.

The Commission's consultation explicitly asks respondents for their views on whether "users [should] have the same remedies for digital content products provided for counter-performance other than money (for example, the provision of personal data)?"

Commenting after the CMA confirmed the scope of the Consumer Rights Act provisions in relation to the supply of digital content in August, commercial contract and data protection expert Claire Edwards of Pinsent Masons, the law firm behind Out-Law.com, said the regulator's guidance had highlighted "the interesting question of what value can be put on personal data and the price of consumers' privacy".

"In the age of big data gaining an insight into consumer preferences and behaviours is becoming increasingly important," Edwards said. "Companies are devoting increasing resources to gathering data and utilising the latest software and systems for analysing and making sense of it, with the aim of improving and personalising the products and services they provide or delivering more targeted advertising."

Edwards said that digital content developers, licensors and suppliers should be aware of data privacy rules will apply to the personal data they collect even if they avoid many consumer protection law liabilities.

"Profiling and analytics is expressly part of the new EU data protection laws, and clear notices will have to be set out which explain such purpose of use and consent to such use will need to be obtained from the individuals," she said. "Businesses should also be mindful that misuse of personal data could result in substantial fines under new EU data protection laws on the horizon."