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EU law makers move to limit scope of new rules on the supply of digital content

The rights and remedies that consumers could be entitled to in future when supplied with faulty digital content could depend on the way personal data they trade in return for that content is used, according to new proposals backed by EU law makers.14 Jun 2017

The Council of Ministers said it has adopted a position on plans for new EU rules governing the supply of digital content, such as music, films and apps. However, the plans are at odds with those backed by a committee of MEPs.

The Council is looking to amend proposals for a new draft EU directive on contracts for the supply of digital content that the European Commission first published in late 2015. Under those plans, consumers would obtain new rights of remedy and redress in relation to digital content supplied to them that is faulty or which otherwise fails to conform to sellers' descriptions.

The Commission proposed that the directive should apply to contracts for the supply of digital content that see consumers exchange either money or a "counter-performance" such as personal data in return for access to that content would be subject to the new rules. 

In its opinion on the plans, published in November 2016, however, the European Parliament's Civil Liberties, Justice and Home Affairs (LIBE) Committee recommended broadening the scope of consumers' rights to all cases where consumers give up access to their personal data to digital content suppliers in return for their access to that content.

Now, however, the Council of Ministers has endorsed plans drafted by its Maltese presidency which, if introduced, would limit the circumstances in which consumers' rights under the directive would apply in cases where personal data is traded for otherwise 'free' digital content.

In a document explaining the position it has adopted, the Council said (8-page / 252KB PDF): "Under the presidency compromise text, the proposed directive will not apply where personal data are exclusively processed by the supplier for supplying the digital content or digital service, or for the supplier to comply with legal requirements to which the supplier is subject, and the supplier does not process the data otherwise."

"The compromise text also clarifies explicitly that any processing of personal data in the context of a contract for the supply of digital content or digital service has to comply with [EU] law on the protection of personal data and that, in case of conflict, [EU] law on the protection of personal data will prevail," it said.

The General Data Protection Regulation (GDPR) is set to apply new rules to the processing and protection of EU citizens' personal data from 25 May 2018.

Under the UK's Consumer Rights Act most of the consumer rights and remedies provided for do not apply where consumers exchange personal data in return for access to digital content. The UK government has previously said it has "no fundamental objection" to consumer rights being extended in cases where consumers trade their personal data for access to 'free' digital content but that it is concerned about the effect there could be on businesses of doing so.

In its position paper, the Council also said that where digital content is "embedded" in other goods supplied to consumers, the proposed new directive on contracts for the supply of digital content should not apply. Instead, it said consumers' rights around that content should be governed by existing legislation which applies to the supply of goods.

"Regarding digital content forming part of a good in a way that such good would be inoperable or would be prevented from performing its main functions in the absence of such digital content, the majority considered it more appropriate that the rules applicable to goods determine the consumer's remedies in case of a lack of conformity or lack of supply of such goods and the embedded software," the Council said.

The Council also confirmed that, under its proposals, providers of 'over-the-top' communication service providers would be subject to the new directive.