Unfair Terms in Contracts for the Supply of Digital Content and in EULAs Vienna, 22. January 2016 Prof. Dr. Hans Schulte-Nölke European Legal Studies Institute Osnabrück

Validity tests of contract terms/EULAs Incorporation test (MS law [+ E-CommD, ServicesD, CRD?]) Infringement of mandatory law (e.g. DCD) Unfair terms test (UCTD + MS law) – Substance test – Transparency test General tests (MS law) – Price, main subject matter – E.g. good morals, usury, good faith

Prof. Dr. Hans Schulte-Nölke, European Legal Studies Institute Osnabrück

Chain Model (cf. Recital 47 DCD) Rightholder, Licensee, Sub-licensee SupplierConsumer

Fitness App & Service ProviderConsumer Dealer of Fitness Tracker Prof. Dr. Hans Schulte-Nölke, European Legal Studies Institute Osnabrück

Dealer of Fitness Tracker = Supplier of digital content under DCD? Contract (+) => concluded online (SGD +) or in a real shop (SGD -) Consumer, Supplier (+) Also supply of digital content under DCD? – Fitness Tracker Watch (-) => tangible good under SGD – Fitness App is not “embedded” (cf. recital (13) SGD) – Element of digital contract included (Art. 3 (6) DCD)?  Depends on promise of dealer  Including public statements (cf. Art. 5 (c) SGD)  Can consumer expect that dealer takes liability for conduct of Fitness App & Service Provider??? Dealer will often not be supplier of digital content under DCD! Prof. Dr. Hans Schulte-Nölke, European Legal Studies Institute Osnabrück

Advertising on Dealer’s Website “Vívosmart HR activity tracker automatically syncs with your smartphone throughout the day to save your stats to our free online community. At Garmin Connect™, you can save, plan and share your activity and beat yesterday in your daily step count. Connect with other users to challenge and compete. For detailed calorie tracking, you can create an account at MyFitnessPal and link it to your Garmin Connect account. This allows you to compare calories consumed to total calories burned, which vívosmart HR records throughout the day.” Prof. Dr. Hans Schulte-Nölke, European Legal Studies Institute Osnabrück

Fitness App & Service ProviderConsumer Dealer of Fitness Tracker Prof. Dr. Hans Schulte-Nölke, European Legal Studies Institute Osnabrück EULA: Excludes everything

App Provider = Supplier under DCD? Contract (+) => Click wrap of T&C => License contract Obligation (?) to supply of digital content (+) => App download, cloud service Consumer, Supplier (+) Price (-) Active (?) provision of personal data or any other data (+) Not applicable, because data is strictly necessary and no commercial use of it, Art. 3 (4)? Prof. Dr. Hans Schulte-Nölke, European Legal Studies Institute Osnabrück

Art. 3 (4) DCD “This Directive shall not apply to digital content provided against counter- performance other than money to the extent the supplier requests the consumer to provide personal data the processing of which is strictly necessary for the performance of the contract or for meeting legal requirements and the supplier does not further process them in a way incompatible with this purpose. It shall equally not apply to any other data the supplier requests the consumer to provide for the purpose of ensuring that the digital content is in conformity with the contract or of meeting legal requirements, and the supplier does not use that data for commercial purposes.” Prof. Dr. Hans Schulte-Nölke, European Legal Studies Institute Osnabrück

Data as counter-performance: Questions IP address? => not “actively” provided Cookies => no “active” provision of data (recital 14) Option to create an account? => only for extra service? Strictly necessary? – Age, weight, sex, BMI – Geo-location – -address Further processing in a way incompatible with purpose Use for commercial purposes Prof. Dr. Hans Schulte-Nölke, European Legal Studies Institute Osnabrück

DCD applicable if data forms a “counter-performance” => Drawing the thin and rather blurred lines between Requesting or just collecting data by the business “Active” or “inactive” provision by the consumer “Personal” or “other” date “Strictly necessary” or unnecessary data Restricted use just for purpose or other, in particular commercial, use of data Prof. Dr. Hans Schulte-Nölke, European Legal Studies Institute Osnabrück

Even if App & Service Provider is Supplier under DCD and all exclusions in EULA are invalid: What are the remedies for lack of conformity? Bringing digital content in conformity? => Specific performance only, if not disproportionate; does it make sense? Reduction of price? => not if counter-performance is data Termination? => includes termination of linked contract? Damages to the digital environment, Art. 14 DCD? – because tracker watch does not work any more? Prof. Dr. Hans Schulte-Nölke, European Legal Studies Institute Osnabrück

Some Light and Much Shadow? Data as price acknowledged; but demarcation from data not being counter- performance unclear; scope much too narrow Remedies for lack of conformity in data cases unclear & weak Just individual bilateral relations covered; EULA out of scope - even if licensor massively collects valuable personal data through cookies Problem of linked contracts missed Problem of multilateral supply relationships missed Problem of platforms missed Just some consumer rights in case of bad quality of digital content only against supplier = does this bring the EU ahead & is worth the uncertainty? Prof. Dr. Hans Schulte-Nölke, European Legal Studies Institute Osnabrück

Prof. Dr. Hans Schulte-Nölke European Legal Studies Institute Osnabrück