Abstract
This paper investigates if and to what extent CESL solves consumers’ problems with regard to digital content contracts concluded at a distance.
This paper builds and expands on three previous publications I (co-) wrote. The first is MBM Loos, N Helberger, L Guibault and C Mak, ‘The regulation of digital content contracts in the Optional Instrument of contract law’ (2011) European Review of Private Law 729. It further builds on MBM Loos, N Helberger, L Guibault, C. Mak, L Pessers, KJ Cseres, B van der Sloot and R Tigner, Analysis of the applicable legal frameworks and suggestions for the contours of a model system of consumer protection in relation to digital content contracts, FINAL REPORT: Comparative analysis, Law & Economics analysis, assessment and development of recommendations for possible future rules on digital content contracts, 2011, a report prepared for the European Commission and available online at http://ec.europa.eu/justice/consumer-marketing/files/legal_report_final_30_august_2011.pdf. Finally, Sect. 3.2 is based on MBM Loos, ‘Incorporation and making available of standard contract terms under the proposal for a Common European Sales Law (Articles 70–71 CESL)’ in A Colombi Ciacchi (ed), Content and Effects of Contracts: the CESL in the European Multi-Level System of Governance (forthcoming).
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Notes
- 1.
N Reich, H-W Micklitz and P Rott, Understanding EU consumer law (Antwerp, Intersentia, 2009).
- 2.
N Reich and H-W Micklitz, ‘Crónica de una muerte anunciada: The Commission Proposal for a ‘Directive on Consumer Rights’ (2009) 46 Common Market Law Review 471.
- 3.
Dir 2011/83/EU on consumer rights, [2011] OJ L 304/64.
- 4.
Proposal for a Regulation on a Common European Sales Law, COM(2011) 635 final. Hereinafter I will refer to the provisions of the regulation itself as ‘Regulation’, and to the provisions of the Common European Sales Law (Annex I to the Regulation) as ‘CESL’.
- 5.
Hence its characterization as an optional instrument in previous draft-versions.
- 6.
Dir 93/13/EEC on unfair terms in consumer contracts, [1993] OJ L 95/29.
- 7.
Dir 1999/44/EC on certain aspects of the sale of consumer goods and associated guarantees, [1999] OJ L 171/12.
- 8.
See Art 4(1) Regulation.
- 9.
Cf. Art 13(a) Regulation.
- 10.
Cf Art 7 Regulation.
- 11.
Cf Art 13(b) Regulation.
- 12.
H-W Micklitz and N Reich, ‘The Commission Proposal for a ‘Regulation on a Common European Sales Law (CESL). Too Broad or Not Broad Enough?’ (2012) EUI Working Papers LAW No. 2012/04, https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2013183.
- 13.
Cf Micklitz and Reich, n 12 above, part I, 15. It should be noted that the Commission’s proposal is limited to digital content contracts whereby digital content is transferred on a permanent basis and for repeated use and not merely provided for one-time use as is the case when the digital content is provided through streaming. See below, Sect. 30.2.
- 14.
Micklitz and Reich, n 12 above, part I, 15.
- 15.
Loos et al., Analysis, 32–41, 155–156, and 172–174.
- 16.
See also M Schmidt-Kessel, L Young, S Benninghof, C Langhanke, G Russek, ‘Should the Consumer Rights Directive apply to digital content?’ (2011) Zeitschrift für Gemeinschaftsprivatrecht 10.
- 17.
See to that extent also Amendment 26 and Amendment 61, as adopted on 26 February 2014, by the European Parliament in its first reading of the proposal of the European Commission, P7-TA(2014)0159.
- 18.
This is clearly a much more limited notion than the one used in the Consumer Rights Dir, as the exclusions do not appear in the definition given there; cf Art. 2(11) Consumer Rights Dir. See further also Loos et al., Analysis, 174–175, where a similar scope as adopted in the Consumer Rights Dir was suggested; the differences between on the one hand our proposal and the scope of the Consumer Rights Dir, and the scope of CESL on the other hand are easily explained by the fact that the focus in CESL is on sales-like transactions, ie on contracts by which digital content is transferred to a consumer or an SME, and services have largely been excluded from the scope of CESL.
- 19.
Throughout this paper I will refer to suppliers of digital content as ‘sellers’, even if the digital content is not concluded in exchange for a payment of money.
- 20.
See in this sense also the justification of Amendment 8 of the European Parliament, which leads to the new recital (17a), EP document A7-0301/2013.
- 21.
See the justification of Amendment 8 of the European Parliament. Cf also Amendment 10, which adds the words ‘or temporary storage of digital content in the provider’s cloud’ to recital (19).
- 22.
Cf recital (27) of the preamble to the Regulation.
- 23.
In MBM Loos, ‘Scope and application of the Optional Instrument’ in D Voinot and J Sénéchal (eds), Vers un droit européen des contrats spéciaux/Towards a European Law of Specific Contracts (Brussels, Larcier 2012) 117 ff, I have argued that (what now is) the CESL should in fact contain specific rules on this matter.
- 24.
Already in the 2010 Green Paper on policy options, the European Commission indicated that ‘[f]or reasons of consistency, the instrument of European Contract Law will have to complement the relevant consumer acquis, by integrating its requirements, including progress made on consumer protection in the internal market in the Consumer Rights Directive’ (emphasis added by me), see European Commission, Green Paper from the Commission on policy options for progress towards a European Contract Law for consumers and businesses, COM(2010) 348 final, 11 fn 30.
- 25.
Art 20 CESL and 5 Consumer Rights Dir contain similar rules for contracts concluded in shops. As the scope of the CESL is expected to be restricted to distance contracts, I will leave out references to provisions pertaining to contracts on contracts concluded in shops or off-premises.
- 26.
Causing lock-in or lock-out problems. On this, see Loos et al., Analysis, 20 f.
- 27.
Which copies Art 8(2) (2nd subparagraph) of the Consumer Rights Dir.
- 28.
Cf Art 13(2) CESL, which copies Art. 6(5) Consumer Rights Dir.
- 29.
Europe Economics, Digital content services for consumers: assessment of problems experienced by consumers (Lot 1), Report 4: Final Report, London: 2011, 74 ff., http://ec.europa.eu/justice/consumer-marketing/files/empirical_report_final_-_2011-06-15.pdf.
- 30.
The standard information notion is specifically intended to help consumers understand their rights in CESL; see the Explanatory Memorandum accompanying the European Commission’s proposal, 11.
- 31.
See Art 9 of the proposed Regulation. Where the information notice is provided in electronic form, it must contain a hyperlink, and otherwise a reference, to a website where the text of CESL is made available free of charge. As the text of the standard information notice is included in Annex II to the Regulation and both CESL and Annex II are available in all languages, in this indirect way it is safeguarded that the consumer may obtain the information in a language he actually masters.
- 32.
See critical on the standard information notice MW Hesselink, ‘How to opt into the Common European Sales Law. Brief comments on the Commission’s proposal for a Regulation’ (2012) European Review of Private Law 208.
- 33.
Art 13(1) CESL copies Art. 6(1) Consumer Rights Dir.
- 34.
Cf Art 6(7) Consumer Rights Dir.
- 35.
Art 24(3)(d) CESL does require the seller in the case where the distance contracts is concluded by electronic means to indicate which languages are offered for the conclusion of the contract, but is silent on the matter in which language information is to be given.
- 36.
See also Art 8(1) Consumer Rights Dir.
- 37.
Cf MBM Loos and HN Schelhaas, ‘Commercial sales: the Common European Sales Law compared to the Vienna Sales Convention’ (2013) European Review of Private Law 113.
- 38.
Cf Art 26 CESL.
- 39.
See the opening words of Art 24(3) CESL.
- 40.
CJEU, judgment of 5 July 2012, Case C-49/11 Content Services Ltd, not yet reported, paras 37–38, 40 and 42–45.
- 41.
Cf Arts 29(3), 48 and 49 CESL.
- 42.
This provision copies Art 6(1) Unfair Contract Terms Dir.
- 43.
Paradoxically, the website must be used in order to read the contract, or even become aware of its existence; see L Guibault, T Rieber-Mohn and PB Hugenholtz, Study On The Implementation And Effect In Member States’ Laws Of Directive 2001/29/EC On The Harmonisation Of Certain Aspects Of Copyright And Related Rights In The Information Society (Amsterdam, Institute for Information Law, 2007), Part I, 140 ff, http://www.ivir.nl/publications/guibault/Infosoc_report_2007.pdf.
- 44.
See Loos et al., Analysis, 66 f, with references to debates in Dutch, Finnish, French, Polish and UK law.
- 45.
Given the scope of CESL, it cannot provide clarity as to the validity of a supposedly concluded separate legal act with the producer of the digital content and the incorporation of these terms in such a legal act.
- 46.
As indicated above, this provision copies Art 6(1) Unfair Contract Terms Dir.
- 47.
- 48.
As both Helberger and Hugenholtz, and Guibault point out, an absolute ban on contractual clauses that prohibit private copying could result in less choice for consumers and should therefore be prevented; see N Helberger, and PB Hugenholtz, ‘No place like home for making a copy: private copying in European copyright law and consumer Law’ (2007) Berkeley Technology Law Journal 1095; L Guibault, ‘Accommodating the Needs of iConsumers: Making Sure They Get Their Money’s Worth of Digital Entertainment’ (2008) 31 Journal of Consumer Policy 409.
- 49.
See Loos et al., Analysis, 199 f. This approach is not unprecedented since a number of Member States of the European Union have declared the rules of copyright mandatory, namely Belgium, Portugal, and Ireland, see Art 23bis of the Belgian Copyright Act of 1994, Art. 75(5) of the Portuguese Copyright Act, and Art 2(10) of the Irish Copyright Act.
- 50.
See Loos et al., Analysis, 162 f.
- 51.
Cf Art II.-7:301 DCFR (Contracts infringing fundamental principles)
- 52.
Cf recital (37) of the preamble to the Regulation.
- 53.
Cf recital (27) of the preamble to the Regulation.
- 54.
Proposal for a Regulation on the protection of individuals with regard to the processing of personal data and on the free movement of such data (General Data Protection Regulation), COM(2012) 11 final.
- 55.
Cf Art 4 under (5) General Data Protection Regulation.
- 56.
A related practice pertains to the situation where in order for the consumer to be able to make use of the digital content he is required to consent to the processing or use of data without that processing or use being necessary for the use of the digital content. On 16 January 2013, the European Parliament’s Committee on Civil Liberties, Justice and Home Affairs adopted a draft-Report on the proposal for a General Data Protection Regulation. Amendment 107 in that draft-Report suggests to include a new Art 7(4b) in the Regulation banning such practices.
- 57.
For a discussion, see N Helberger, Controlling access to content. Regulating Conditional Access in Digital Broadcasting (The Hague, Kluwer International, 2005) 188 ff.
- 58.
In CJEU, 15 March 2012, Case C-453/10 Pereničová and Perenič v SOS financ spol. s r. o.), not yet reported, the Court made clear that this is not automatically the case and that the term must be evaluated on a case-by-case basis applying Art 3(1) Unfair Contract Terms Dir.
- 59.
Obviously, the practice of bundling clauses is not restricted to digital content contracts and may produce equally questionable results for other consumer contracts. Therefore, the provision on the grey list need not be restricted to such contracts either.
- 60.
Loos et al., Analysis, 103 ff.
- 61.
Cf Art 142(1) CESL.
- 62.
Cf Art 142(2) CESL.
- 63.
Cf Art 105(3) CESL.
- 64.
See Art 5 CESL, which indicates for which contracts CESL may be used.
- 65.
Cf. Art 5(b) of the Regulation. See also above, section 3.
- 66.
N Reich in H-W Micklitz and N Reich, n 12 above, part III, 74, rightly remarks that the right to an update depends on the express or implied terms of the contract and therefore may be avoided by omitting such a term in the contract. However, if such a term is included, Art 105(4) CESL is mandatory.
- 67.
Cf P Rott, ‘Download of Copyright-Protected Internet Content and the Role of (Consumer) Contract Law’ (2008) 31 Journal of Consumer Policy 450.
- 68.
N Reich in H-W Micklitz and N Reich, part III, 81 and 90, correctly remarks that the information requirement de facto may thus function as an exemption clause.
- 69.
Other areas of problems are digital content of bad or substandard quality; and flaws, bugs and other security and safety matters. In these cases, the non-conformity of the digital content can often be established with relative ease. For details, see Loos et al., ‘The regulation of digital content contracts’, 745 ff, and Loos et al., Analysis, 117 ff.
- 70.
Which copies Art 2(2)(d) of the Consumer Sales Dir.
- 71.
Furthermore, the seller may not be held to the statement if it is established that the conclusion of the contract could not have been influenced by the statement. This may be relevant where the consumer has indicated that he is only interested in making a particular use of the digital content and the third party’s statement pertains to other use or other performance capabilities.
- 72.
It should be noted that where a consumer has exercised his right of withdrawal under Art. 40–47 CESL, the effects of termination are primarily governed by those provisions. In this paper I will not discuss whether and to what extent Art 172 ff CESL may also be applied in the case of withdrawal.
- 73.
See also the justification of the European Parliament for this amendment, A7-0301/2013, 109.
- 74.
See in a similar fashion Loos et al., ‘The regulation of digital content contracts’, 755 f.
- 75.
In this sense, Art 111 CESL follows and clarifies Art 3(3) Consumer Sales Dir, which in itself is somewhat ambiguous in this respect; that the choice is the consumer’s, however, follows clearly from recital (10) of the preamble to the directive.
- 76.
Such a right is for instance recognised explicitly in Dutch law, cf Art 6:103 Dutch Civil Code, which allows the court to award damages in kind instead of in money upon demand of the victim.
- 77.
In so far as the transfer of ownership is not the automatic result of the conclusion of the contract.
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Loos, M. (2014). The Regulation of Digital Content B2C Contracts in CESL. In: Purnhagen, K., Rott, P. (eds) Varieties of European Economic Law and Regulation. Studies in European Economic Law and Regulation, vol 3. Springer, Cham. https://doi.org/10.1007/978-3-319-04903-8_30
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