Guide to the Consumer Rights Act 2015, Part 4 – Supplying Digital Content

In this Part 4 we examine the key changes the Consumer Rights Act (“CRA“) brings in, in relation to the supply of digital content. Part 1, Part 2 and Part 3 of this series of articles can be found by clicking on Part 1 here, Part 2 here and Part 3 here.

What does the Consumer Rights Act 2015 (‘CRA’) say about supplying digital content?

The CRA brings in new statutory rights and remedies specifically aimed at suppliers of digital content.  This is helpful because traditionally, the law for technology and digital content has been uncertain and slow-moving.

What types of digital content are subject to the CRA provisions on digital content?

The CRA applies, for example, to:

1. all digital content that is paid for;
2. all digital content which comes free with any other good or service purchased and not generally available to consumers unless the consumer has paid for it or paid for other goods, services or digital content; and
3. all digital content paid for using digital currency where the digital currency was firstly paid for using money.

Most of the statutory rights and remedies do not apply to:

1. digital content supplied for free; and
2. digital content supplied in return for a consumer’s personal data instead of money.

The rights and remedies under the CRA for digital content are also not applicable if the trader provides a service and, through that service, digital content can reach a consumer.  This means that internet service providers and mobile telephone providers are not caught by such provisions simply by providing internet service or mobile telephone provider services.

Terms governing the supply of digital content to consumers

Importantly, the CRA has clarified that digital content is not a good nor a service but rather a commodity in its own right.  It adopts a definition of digital content being data produced and supplied in digital form. 

As with the supply of goods generally, digital content must be of satisfactory quality; fit for a particular purpose; and as described.  There will be now be an implied term in consumer contracts that the trader has the right ‘to supply’ digital content.

When it goes wrong…

If the trader is in breach of its right to supply digital content, a consumer has a right of refund.

For any other breach (for example, if the digital content was not of satisfactory quality), a consumer has the right to have the digital content repaired or replaced and if this has failed or if it is impossible then a consumer has the right to a reduction in the price of the digital content.

If the supply of digital content causes any damage to a consumer’s machine or to a consumer’s other digital content (even where this digital content has been provided for free) and the trader has not exercised reasonable skill and care, a consumer has the right to compensation and can request repair within a reasonable time.

There is no prescribed limit as to how many times a trader can attempt repair and replacement before the price reduction kicks in.

There is also no right to reject digital content which is probably because of the logistical issues of returning digital content.  There is also no requirement that a consumer deletes or returns the digital content.

Different remedies may be available to consumers who received the same digital content, but via alternative methods (such as an app being pre-installed on a tablet or downloaded from the app store).

What should I review?

Businesses should be reviewing all consumer facing terms and conditions. These may include:

• consumer sales contracts (for goods, services and digital content)  including website terms and conditions
• contractual clauses that limit your business’s liability
• any pre-contractual information provided to consumers including marketing material
• cancellation and returns policies.

Further guidance for businesses in relation to the CRA is available on the Business Companion’s website, accessible here.

Author: Noor Al Naeme

For further information on compliance with the CRA or any other matter, please contact Tom Torkar, Partner in the Technology & Innovation team at tom.torkar@michelmores.com.