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5 September 2022 · Article

New Consumer Sales Act – digital content and digital services given more space

Since 1 May 2022, a new Consumer Sales Act applies. A number of changes have been made that companies active in the consumer market need to be aware of. Digital content and digital services in particular have been given a lot of space in the new law.

The new Consumer Sales Act also covers contracts where consumers – instead of payment – provide personal data in exchange for digital services. For example, when consumers in connection with registering accounts on social media provide e-mail addresses and other personal data, which can then be used for marketing purposes.

In order for the law to apply to such situations, it is required that the company does not only process the personal data to comply with a legal requirement or to fulfill other obligations in the contract with the consumer.

The changes are based on two EU directives: the Goods Directive and the Digital Directive. The aim of the Directives has been to create and improve a more comprehensive consumer protection in the purchase of goods and in contracts for the supply of digital content and digital services.

The new Consumer Sales Act covers digital services and content

A new feature is that the Consumer Sales Act now covers contracts for digital content and digital services – without these being linked to a product. Digital content means something that the consumer has access to in digital form. For example, computer programs, apps, music and video files, digital games and e-books.

A digital service enables the consumer to create, process, store or access data in digital form. It may also involve exchanging or interacting with data in digital form uploaded or created by the consumer or by other users of the service. Examples include video or audio sharing, online gaming or word processing, offered in a cloud-based computing environment or social media.

The consumer’s right to information and updates of the product

In the new sales act, a requirement is set stating that information must be given as regards the compatibilty of the product. Regarding contracts for digital content and digital services, the company shall ensure that the consumer is informed about and provided with the necessary updates. If the company does not comply with these obligations, there is sales law defect and penalties can be imposed by the consumer.

In order for the company to avoid liability for lack of updates, two main things are required:

  • that the consumer should have been informed of the availability of the update and of the consequences of not installing the update;
  • that the consumer’s failure to install the update was not the result of inadequate installation instructions provided by the company.

The company is normally obliged to inform about and provide updates to the consumer for at least 3 years. If the contract for the digital content or service runs continuously, as is the case, for example, with subscription services, such as streaming services, the obligation applies during the term of the contract and can therefore be longer than 3 years.

Defects in goods and extension of the time limit for reversing the burden of proof

Another change is that there is an explicit requirement that a product must meet both subjective and objective requirements. Subjective requirements are what the parties have agreed on, while objective requirements are what the consumer can reasonably expect – the characteristics that are normal for products of the same type.

As a starting point, it is the consumer who must prove that a defect is one for which the trader is responsible – that is, that the defect is original. However, the reversal of the burden of proof means  that the company must prove that the goods were not defective when the consumer received them, for a certain period after delivery. The new law extends the period within which fault can be presumed to be original from six months to two years.

For digital services and content, different time periods apply. In the case of single supplies of digital content and digital services, the reversal of the burden of proof is one year. If, on the other hand, it is a continuous supply, it applies for the duration of the contract.

Disclaimers have also been further restricted by the new Consumer Sales Act. References to an item being sold “as is” or general disclaimers will no longer limit the liability for defects to any great extent.

The new consumer law regulations require companies to adopt new routines and develop their compliance work. When questions and problems arise, legal expertise may be required.

Moll Wendén’s lawyers are experts in business law and have a strategic approach that prevents protracted disputes and facilitates our clients’ projects. You are welcome to contact us.

This text has been prepared for information purposes only and should not be construed as legal advice.