New UK consumer protection rights for digital content


January 14, 2016 Leave a comment
On 1 October 2015 the Consumer Rights Act 2015 (“CRA”) came into force in the UK. It has been described as the biggest overhaul of consumer rights in a generation and consolidates, updates and improves UK consumer law. However, of particular interest is that for the first time in UK consumer law, the CRA expressly provides consumers with rights and remedies in relation to digital content.

What is digital content?

This is defined widely as any “data that are produced and supplied in digital form”. Digital content therefore includes games sold online through platforms such as Steam, the App Store, PSN and Xbox marketplace. It also includes additional content purchased in-game, such as virtual currency and other digital items.

Do these provisions apply to games provided for free?

Yes and no. Most of the provisions do not cover a digital content that is provided free and so will not apply to a game on the App Store that is free (or, as now stated, that a consumer can ‘Get’). However, the provisions will cover additional content purchased through that game. In addition, digital content will not be considered free where it is supplied with goods, services or other digital content for which the consumer pays a price and which is not generally available to consumers unless they have paid a price for that digital content (or for goods, services or other digital content). So, for example, if a consumer buys a console that comes bundled with “free” games, then those games will be covered by the digital content provisions of the CRA. In addition, even if a game is completely free, the CRA contains a special right for consumers to a right of repair or to compensation where digital content supplied (whether free or paid-for) causes damage to a device or other digital content owned by the consumer.

What standards apply to digital content?

Under the CRA digital content must be of satisfactory quality, fit for purpose and as described.

What is meant by “satisfactory quality”?

A game must meet the standards of an objective reasonable person, taking account of all relevant circumstances, such as the price and the description of the game. It is unlikely that a game will fall below this standard just because of minor bugs, as an objective reasonable person will expect any game to contain some minor bugs. However, since the price of digital content is one of the relevant circumstances to be considered, a consumer is likely to expect a higher standard of quality from an expensive console game than for a cheap game on the App Store. A disclaimer in a EULA stating that a game is provided “AS IS” (or similar) will not be sufficient to exclude liability.

What is meant by “as described”?

A game must match any description of it given by the seller to the consumer. It is therefore important that publishers pay particular attention to the description given to a game, such as those that appear as part of ad campaigns and on online platforms. The description should also be framed in such a way that does not create problems with future upgrades. Digital products must remain “as described” and although it is to be expected that a game will be updated over time, the game must still be consistent with the original description. It follows that removing a significant feature from a game (such as a multi-player mode) could be a breach of this right. In addition, although the CRA recognises that digital products are likely to be upgraded and updated, the “right” to make upgrades and updates must be specifically referenced in the terms and conditions.

What remedies does the CRA provide for consumers?

There is no right to reject digital content or to require a refund. Instead, the seller must repair or replace the game with a “reasonable time” and without causing “significant inconvenience” to the consumer. A consumer cannot choose a replacement over a repair or vice versa, if the chosen remedy is disproportionate compared to the other remedy. If repair or replacement is impossible or not provided within a reasonable time or without significant inconvenience to the consumer, then the consumer is entitled to a reduction in price. The reduction must be an appropriate amount, taking into account all of the circumstances and can be anything up to the whole price paid.

What about games supplied on physical media?

Under the CRA, a contract for the sale of digital content on an item of physical media is classified as a “mixed contract”, being a combination of digital content and a physical good. In this situation, the rules applicable to the sale of goods will apply, meaning that a consumer will have a right to reject the product altogether. However, the standards applicable to the digital content stored on the media will be the standards applicable to digital content and not the standards applicable to goods.

Who needs to act and what action is needed?

These provisions are of most direct relevance to platforms. However, they will also be relevant to publishers that sell digital content to consumers from their websites. In addition, all publishers should consider the description that they apply to games and any applicable EULAs or terms of service.

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Paul Gardner

Paul Gardner

Partner at Osborne Clarke
Paul is a Partner in OC's commercial group and specialises in commercial transactions and regulatory issues relating to the crossover of technology and entertainment.

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