Digital Content Provisions in the Consumer Rights Act 2015

The main provisions of the Consumer Rights Act 2015 (“CRA”) are now in force as of 1 October 2015 and they bring with them a key change to the supply of digital content to consumers. Consumers now benefit from a number of similar rights in respect of digital content to those already enjoyed for tangible goods. Digital content suppliers must now ensure that any terms and conditions, user licenses and other contracts that provide digital content to consumers are compliant with the rights and remedies contained in the CRA.

Please find below our summary of the changes:

Future statutory updates

Digital content has its own section in the CRA because it is different to other consumer goods. Digital content is intangible, can be easily copied and as technology is continually developing, the legislation is likely to require statutory updates in the future.

What is digital content?

Digital content includes items such as software, e-books, applications or “apps”, computer games, music and TV programmes.

Free digital content

Digital content provisions under the CRA apply to both: (1) digital content which is paid for, and (2) free digital content which comes with paid for goods and services. The CRA does not apply to standalone free digital content, except in cases where free digital content causes damage because of negligence (e.g. a free app is downloaded and contains a virus that damages a consumer’s phone).

Quality standards

The CRA introduces new quality standards for digital content, consistent with the equivalent provisions for physical goods. Digital content must be of satisfactory quality, be fit for the particular purpose and meet any given description.

• Satisfactory quality: The CRA takes a flexible approach on whether digital content has to be free from minor defects for it to be of satisfactory quality – this will depend on the context in which the digital content is bought. BIS note that in some products (e.g. software products) the customer would have a higher expectation of them being free from minor defects, whereas in other products (e.g. gaming products) minor defects are common.
• Fit for the particular purpose: As with tangible goods, a consumer has a right for the digital content to be fit for the particular purposes made known to the digital content supplier (section 35 CRA). BIS note that suppliers should be careful when marketing digital content as being suitable for a particular purpose, or when interacting with consumers who have a particular purpose.
• Meet any given description: Digital content must match any description given to the consumer when they bought it, for example relating to the digital content’s main characteristics, functionality and compatibility. The name and details of the trader must also be accurate.

Updates to digital content

Any post-purchase updates to digital content must continue to match the product description and must be an improvement to the product and not reduce the quality of the content that was described upon purchase.

Who does the consumer have rights against?

A consumer could have digital content rights against a retailer or a digital service provider, depending on the contract they entered into. For example, if a consumer bought a smart TV from John Lewis which included digital content or the ability to download and watch digital content, if there were problems with the digital content, the consumer’s rights could be against John Lewis or the digital content provider, depending on the contract.

Risk transfer

The risk in the digital content transfers from the supplier to the consumer at the point when: (1) the digital content reaches the consumer’s device; or (2) when it reaches an independent trader (an ISP or mobile network operator) who the consumer has contracted with for a service to deliver the digital content to their device.

Remedies

Unlike with tangible goods, the principal remedy for digital content that does not comply with the requirements of the CRA is repair or replacement. As it would be easy to copy digital content before obtaining a refund, a right to reject is not an appropriate remedy for most digital content. Price reduction is a second tier remedy when repair or replacement is impossible and can be of up to 100% of the price if the digital content is impossible to use.

Damage caused

The trader will be required to repair the damage or provide compensation when digital content (whether paid for or free) damages other digital content or the device due to the trader’s negligence.

Liability

Contracts cannot restrict or exclude liability under the CRA except in relation to damage caused to other digital content or device.

BIS has also provided guidance notes on the digital content provisions, which you can access here.