Last year I wrote rather extensively on the Consumer Rights Directive, an EU-wide overhaul of outdated consumer protection laws. The law, which was implemented through national legislation in each EU member state, mandated several changes which apply to both online e-commerce sales and offline, in-person transactions. I translated the somewhat impenetrable EU/member state jargon into a plain English e-book explaining what you need to do to comply.
The UK used the EU’s Consumer Rights Directive as a stepping stone to address some additional consumer rights issues. This has been done through a second, separate, UK-only law called the Consumer Rights Act. This comes into effect in the UK this week on Thursday 1 October. It is referred to as the Act or the Bill.
At this point you’re thinking “FFS woman! You give me TWO DAYS to comply?” Well, relax. This is not an EU-style directive requiring a major overhaul of your e-commerce which must go live at the stroke of midnight before all manner of penalties and fines come crashing down onto your entrepreneurial head. Not at all.
As with the EU Consumer Rights Directive, the UK Consumer Rights Bill is about what you say and how you say it. The changes it requires to your offline sales and online e-commerce are all in the fine print in product descriptions, terms and conditions, and contract terms. Any compliance obligations you need to undertake should not take you more than a few Pomodoros.
That said, there are some interesting provisions regarding digital content which you should be aware of, which we shall get to in this piece.
What is this law about?
The Consumer Rights Bill, like the Consumer Rights Directive, tightens up the gaps that had developed in practice in consumer protection law. The Bill creates better protection for both consumers and traders.
You don’t have to do anything different, unless your trading practices were in need of an overhaul to begin with. Complying with the Bill will likely mean making slight changes to your terms and conditions, contracts, and customer communications.
With the EU Consumer Rights Directive, the UK’s own interpretive guidance – which was much easier to understand than the EU’s original law – was still complicated to the point where I needed to translate it into a plain English e-book just to comprehend it all myself. Because the Consumer Rights Bill has originated in the UK, it was never weighed down by that impenetrable Brussels legalese to begin with. This means that everything you need to know about the Consumer Rights Bill has already been written for you in plain, simple English.
That guidance is available on a trading standards web site called Business Companion. Bookmark the site for a rainy day because it offers very useful information which you should be aware of as a trader regardless of whether you sell online or offline. That said, please do pay attention to the box at the top asking you to note your home nation. Consumer protection laws differ across England, Scotland, and Wales. However, the Consumer Rights Bill is UK-wide.
While there are seven areas which the Bill deals with, for your purposes, these are the ones that matter:
I am not going to get into the areas concerning the sale of goods, services, or unfair contract terms, as you can (and should) read them on your own time. The plain English guidance is more than adequate and easy to understand.
Part of the Bill references the consumer information which must be provided under the Consumer Rights Directive. It is not an either/or situation: you have to comply with both laws. If your web site complies with the Bill but you have not provided the pre-contractual information required by the Directive, you’ve complied with neither.
New rules on digital content
For our purposes the most interesting areas of the Consumer Rights Bill concern digital content. I want you to download and study this guidance very carefully.
Under the Bill, digital content is now considered a separate kind of product, unlike a physical good, with its own set of statutory rights and remedies for the consumer. The digital content you provide must be
- Of satisfactory quality
- Fit for a particular purpose
- As described
and the consumer now has the
- Right to a repair or a replacement of the damaged content or, in some cases, the digital content or hardware which the content damaged
- Right to receive a reduction in price or refund
- Right to make a claim for damages
- Right to force the seller to correctly fulfil the contract
- Right to not pay at all if the damage is substantial.
Digital products include, but are not limited to,
- Games and virtual items purchased within games
- TV shows
Free software that comes with goods or services a consumer has already paid for falls under the provisions of the Consumer Rights Bill. This might mean, for example, free anti-virus software pre-installed on your new laptop. If that software fails to spot a virus, the software developer may be liable for any damage to your files.
Free no-strings attached software does not fall under the Consumer Rights Bill unless it causes damage to a device or other digital content.
This provision worries me, especially given the ongoing disputes about the GPL. It does not take much imagination to see how this has the potential to cause a lot of headaches. While issues of warranty and liability are specifically addressed in the GPL, a smart client will want to address liability in the contract.
The Bill also clarifies the situation regarding upgrades. If the original contract allows the trader to periodically upgrade the software, the consumer’s rights do not end with the first upgrade as if the product no longer existed. Their rights continue regardless.
As with the Consumer Rights Directive, the Consumer Rights Bill falls to Trading Standards offices to investigate and enforce. Trading Standards in the UK are run through local councils. A consumer who feels that their rights have been violated can contact their local Trading Standards, regardless of where the seller is located, to get satisfaction.
Future harmonisation across Europe?
The UK is actually ahead of the curve in legislating new consumer rules on digital rights. The EU is looking into making this a European-wide issue and will likely use the UK’s experience, for better or for worse, to inform their policy recommendations.