Consumer Contracts for Digital Products – The New Regulations

The 2021 amendment to the Sale of Goods Directive also resulted in changes to the Digital Content Directive. These changes have led to new provisions in the German Civil Code (BGB). Contracts between businesses and consumers regarding digital content and digital services are now governed by provisions that have been incorporated into the law. Your tax advisor in Düsseldorf and Oberhausen explains what changed on January 1, 2022.

Why is a uniform level of consumer protection being introduced?

In 2019, the EU decided to harmonize the existing differences in national regulations in the digital sector. The new regulations concern certain contractual aspects of the provision of digital content and services. The goal of this legal harmonization is to simplify cross-border trade and strengthen consumer confidence when purchasing digital products from providers in other member states. The new regulations do not create a new type of contract. They have been incorporated into the general provisions of contract law.

When did the new regulations take effect?

The new regulations are enshrined in the Act Implementing the Directive on Certain Contractual Aspects of the Supply of Digital Content and Digital Services. The plan was to implement the Directive by June 1, 2021, but it was ultimately not introduced until January 1, 2022.

The new regulations apply to contracts concluded after December 31, 2021, and to contracts concluded prior to that date. For such contracts, the new regulations apply if the supply of the subject matter of the contract takes place after that date or takes place in part after that date.

What rights does the consumer have?

The legislative amendment grants consumers new rights regarding non-performance or defective performance of a contract for the provision of digital products. Consumer rights are a central component of the new regulations.

Once a contract is concluded, the service provider is obligated to provide the consumer with the digital product. If the promised delivery fails to materialize, the consumer may terminate the contract if the business operator does not immediately fulfill its due obligation upon the consumer’s request. In exceptional cases, the request may be dispensable. Furthermore, claims for damages and reimbursement of expenses may be considered if the business is at fault.

In the event of a product defect, the consumer may demand subsequent performance. This includes a breach of the obligation to provide updates. The contract may also be terminated if certain additional conditions are met. The consumer may reduce the payment and claim compensation for damages or reimbursement of expenses.

Furthermore, it has been generally ruled out that the aforementioned warranty rights may be contractually limited or excluded in advance. Under strict provisions of the law governing general terms and conditions, this is possible for claims for damages or reimbursement of expenses.

In which cases do the new regulations take effect?

Various digital goods are affected by the new regulations. These include, among other things, computer programs, audio files, and e-books. Digital services are also affected by the new regulations. These include, for example, cloud hosting, word processing, file conversion, and games. The method of file transmission is irrelevant.

The provision of an analog service via digital means is not affected by the new regulations. This includes personal consultation via email or video conference. Other exceptions are also not affected by the changes, such as contracts for gambling services, contracts for financial services, and contracts for so-called open-source software.

However, the new regulations do cover contracts where no purchase price was due. If the consumer’s contribution consists, for example, of providing personal data, the contract falls under the new regulations.

Tax Advisors in Düsseldorf and Oberhausen

If you have any questions regarding the new regulations for consumer contracts for digital products, please feel free to contact us, your tax advisors in Düsseldorf and Oberhausen. We at Trimborn.Partner are happy to assist you with these and other questions.