1 Scope of the proposed Directives (distance sales (ODSDir) + supply of digital content (DCDir)) Prof. Matthias E. Storme Institute for commercial and insolvency law KU Leuven

2 Common characteristics -Both deal with ‘contracts’ (with a classical definition of ‘contract’) -Presuppose that the applicable law is the law of a MS -No cross-border requirement, includes domestic contracts -Only B2C contracts: -> lack of protection of SME’s, non-profit organisations, etc. -> does not apply in P2P (or C2C) transactions – new sharing economy !?? -Definition of consumer unclear as to mixed/dual purpose acquisitions (only a recital) -Unilaterally mandatory (in favour of the consumer) (art. 18 ODSDir and art. 19 DCDir) -However art. 16 ODSDir and art. 17 DCDir grant the supplier a ‘right of redress’ against earlier links, -but rules left to national law …: does it say anything ? Naked and to be vested... (last slide)

3 Specific rules ODSGDir -Object: -only goods (excl. carriers of digital content), no service contracts or service part of sales contracts, but incl. goods to be manufactured -Consideration: -in exchange for a price < only sales -Sales method : -only distance sales (incl. online sales) defined in art. 2(e) > further fragmentation of sales law (CISG, national B2B, P2P, B2C offline (distance sales now excluded from other consumer Directives, ….). Especially criticized is difference between distance and non-distance B2C sales of the same goods. Higher protection allowed in non-distance sales !? -excluding sales by way of execution or otherwise by the authority of law (2(d))

4 Specific rules SDCDir -Object: -‘supply’ digital content irrespective of the carrier/medium of transmission, incl. digital services; incl. services in relation to content created by the consumer itself -> Art. 2 (1)(a) enumerates 3 types of (supply of) digital content -a) data produced in digital form, eg video (photos, movies etc.), audio (music etc.), applications, digital games and any other software (incl. databases, e-books, …) -b) service allowing creation, processing or storage of digital data provided by the consumer -c) service allowing sharing of / interaction with digital data provided by other users of the service -> irrespective of the method: durable medium, download, streaming, cloud, host providing, … -Excluded / not considered as digital content: e-communication healthcare, gambling, financial services, and other services with significant human intervention (eg non-machine translation) where only the output is delivered digitally (art. 3(5)) -Excluded: ‘smart goods’

5 Specific rules SDCDir -Irrespective of the qualification of the contract -> sales, licensing, rental, service contract, ….: regardless of temporary or definitive character of the right acquired; including product designed according to consumers’s specifications (art. 3(2)) -But qualification will remain relevant under national law for non-harmonised aspects -Covering also the service level agreement concerning the digital content itself, but not covering services not functioning as carrier (such as telecommunication services)

6 Specific rules SDCDir -Consideration: -Supplied in exchange for a price and/or for personal data (except where data collected only to meet legal requirements, art. 3 (4)) -Sales method: -Not limited to distance sales

7 “Full” harmonisation -“Full” harmonisation: raises the question of what exactly is regulated and what not (as with the CRD 2011/83). -< does not exclude that the consumer acquires from the eller a direct action against an earlier chain -Within the scope: no place for overriding mandatory law nor public policy exception -Some national rules on aspects not regulated may interfere - eg avoidance for mistake may lead to higher protection -Is the good faith exception in or out ? If out > disparity -right to damages for non-performance (only “economic damage to the digital environment” is “in”) -No full harmonisation for commercial guarantees: higher level of protection possible (art. 15 ODSDir)

8 “Full” harmonisation -Matters not regulated: apply principles of equivalence and effectiveness (duty to give full effect, art. 4(3) TFEU) -quid granting consumers more rights on the basis of extracontractual liability (concurrency of actions) ? Unlimited concurrency against effet utile ? -National language rules ? (for unfair contractual langage requirements, see Unfair Terms Directive) -Or regulated only in principle: idem (apply principles of equivalence and effectiveness (duty to give full effect, art. 4(3) TFEU) -> They need some national dressing by national law -Some matters not fully harmonised, ag liability for “economic damage to the digital environment” in art. 14 DCDir -Right of redress -> Limitation periods are governed by national law, but may not be shorter than 2 years from the time “relevant for establishing conformity” (as determined by art. 8 ODSDir) ((art. 14 in fine ODSDir)