Klauzule umowne przy zakupach on-line
2015-09-03
Wkład Konfederacji Lewiatan do konsultacji społecznych KE w sprawie klauzul umownych przy zakupach on-line.
Polish Confederation Lewiatan input to the public consultation on contract rules for online purchases of digital content and tangible goods.
I. Introduction
The Polish Confederation Lewiatan is one of the largest employers'organization in Poland, associating over 3,900 companies. We are actively involved in the debate at the European level and cooperate with the Polish government on many issues discussed in Brussels, among them in the area of consumer rights legislation. Addressing the remaining barriers on the single market is one of our main priority and therefore we are pleased to contribute to the current public consultation on digital and online purchases.
We agree with the assessment of the potential benefits of the Digital Single Market for the EU economy presented by the Commission in the Communication "A Digital Single Market Strategy for Europe"[1]. At the same time, we would like to raise several questions important from the perspective of entrepreneurs, especially SMEs, that constitute over 99% of Polish companies.
Incomplete single market hampers development of businesses as well as limits the choice for consumers. However, quite often barriers do not originate from the lack of harmonization and can be overcome by softer measures than binding legislation. Ensuring compliance with constantly changing regulations requires companies' resources which could instead be allocated to deliver innovative products and creating new jobs.
One of the Commission's proposals is to further harmonize the contract rules with regard to online sales. We would like to underline that the recently implemented consumer rights directive[2] was a meaningful step in this direction. Compliance with the new rules, which significantly changed provisions concerning distance sales, has also been a challenge for small businesses, portals, on-line shops as well as for bigger companies operating on the digital market.
Even though a certain degree of targeted harmonization could be beneficial, especially for tangible goods, we believe that introduction of any new regulation in this area should be considered carefully and preceded by in-depth analysis of its effectiveness, proportionality and cost, especially in such a complex matter as digital content sales. In order to improve consumers' trust and satisfaction from online sales, more emphasis should be, first of all, put on consumers' education and clarification of the existing consumer rights as well as their execution.
II. Digital content
| Section 1: Problems (question 1- 4) |
The emergence of a national legislative trend regarding the sale of digital content has opened the debate about a possible European approach. From a business perspective, the main benefit of this approach could be to prevent a new wave of legal fragmentation potentially hazardous in a fast-growing, and by nature, borderless digital market. At the same time, we believe that European legislator should remain very prudent and carefully perform in-depth analysis of effectiveness, proportionality and cost before deciding to introduce any new regulation in this area. This will allow to make sure that new solutions are tailor-made, future proof and do not limit innovation.
In this context it should be emphasized that absence of harmonized rules on digital content so far has not constituted an obstacle to the development of this market. It is also of high importance for the purpose of this discussion to understand that ‘the digital content' is not a uniform category of "products" . Applying a uniform type of contract to different types of content and transactions does not reflect the market and legal reality.
Furthermore, we do not believe that users are not sufficiently protected under current rules in case of buying digital content products. The existing consumer rights acquis is applicable to the online transactions regardless of type of product. The rules concerning the conclusion of the contract have already been sufficiently harmonized by the consumers right directive.
In the specific case of digital content, it is rather of utmost importance for the user to know what he/she is ‘buying' and on what conditions. We believe that in order to improve consumers' trust and satisfaction from online sales, more emphasis should be put on clarifying existing consumer rights and their execution as well as providing the consumer with most relevant information in a clear and simple manner. In this context it should be pointed out that in some cases consumers' dissatisfaction may result from insufficient digital competence, technical reasons or unconscious use of illegal services or content.
| Section 2: Need for an initiative on contract rules for digital content products at EU level (question 5- 6) |
For Polish Confederation Lewiatan any European harmonisation initiative should be targeted, evidence-based and with such a level of protection that does not hamper the fast-paced innovation.
Even though we are against minimum harmonisation approach, which would be contradictory to the objective of fighting legal fragmentation, the maximum harmonization in the field of digital content sale is not realistic to the extent proposed in the Digital Market Strategy. Its scope covers all transactions related to the digital content, regardless the type of the content and contract concerned.
In the digital reality, as much as in the off-line world, the applicable legal regimes reflect different distribution models and market conditions. Depending on the type of content (e.g. computer programs, other works protected by copyright, personal data) and business model, there are at least two distribution models: sale and service provision. In consequence, different types of contracts (e.g. sale, lease, license) and various regulations may apply (e.g. copyright rules, data protection). For example, customised software can relate to a sales contract or to a contract for related services, music files can be sold in on line stores or offered within music streaming services.
With respect to the conformity with the contract it should be underlined that the quality of digital content depends highly on the type of device used, which makes assessing the conformity of the product as such less obvious. The above mentioned aspects should be taken into account by the Commission before it decides to propose uniform contractual rules for transactions related to digital content.
To simplify issues related to contracts related to digital content to consumers and SMEs the idea of developing voluntary contract models reflecting complexity of ‘digital' issues may be the most relevant solution. If the parties willingly apply the model clauses, the next step can be the introduction of binding law. However, promoting the model contract clauses should remain voluntary, simple and with a realistic level of protection.
| Section 3: Scope of the initiative (question 7- 10) |
The definition of digital content is a starting point to define the scope of any future initiative. Working on it would inevitably present challenges. As already explained, the ‘digital content' is not a uniform category of products. Often it is simply due to the type of the specific products (e.g. computer programs, media for download, media for streaming, cloud services) that the distribution models and the types of contracts vary.
In the digital reality, as much as in the off-line world, the applicable legal regimes reflect different models and market needs. The list introduced by the Commission consists of both digital content products and services. There is no possibility to apply one type of contract to different types of content and transactions.
In our opinion, only the digital content products, to which sales contract can be applicable (where a trader commits to transfer the ownership of a product to a buyer, who is not limited in using a product by time nor cooperation with a trader), could eventually be covered by the future initiative.
Furthermore, taking into account that the evolution pace of digital technology is very rapid and often influences unrespectable shifts on the market, possible future legislation should be based on the ‘same services, same rules' principle. It means that common framework should apply to the same type of activity regardless the type of provider.
Secondly, Polish Confederation Lewiatan strongly believes that if the Commission decides to advance it works on the proposal, the business-to-business sector should not become a subject of a new instrument. If the proposal if to be presented, only business-to-consumer (B2C) contracts should be targeted.
The particular vulnerability that often exists for consumers in the B2C sector does not apply in contract between professionals, even if one of the contracting parties is a small or medium-size company (SME). As a matter of fact, the specific feature of the digital market is that the size of a company does not reflect the actual negotiating position. There are cases, in highly specialised sectors, where a smaller partner in a B2B transaction can be a powerful negotiator due to its special expertise and unique product offer. Binding provisions are not appropriate for this sector. Traders must be allowed to retain autonomy over the contracts they conclude with other business partners.
Thirdly, we believe that digital content provided without a financial counter-performance should be out of the scope of a potential initiative. Regulating ‘free content' would trigger additional challenges with regard to the definition of the digital product, the valuation of the counter-performance and the establishment of specific remedies.
Only financial counter performance should be considered. Even though on the Internet other types of ‘remuneration' are used, they are often not a payment sensu stricto..[3] This is often the case with personal data which often are necessary for the provision of a services or which are disclosed in exchange for a free product or a service. We should bear in mind that currently the General Data Protection Regulation is still being negotiated. Any aspect related to personal data shall be considered only after finalizing works and entering into force of this proposal. Otherwise we would risk introducing rules on digital content, which are incoherent with new rules on data protection and with business models which will probably arise after its entry into force.
| Section 4: Content of an initiative (question 11- 28) |
In our opinion, we should avoid falling in the trap of regulating every single detail. This could be particularly counter-productive in the digital area, which is in constant evolution. New digital content/products are created everyday and they easily fit several categories, or they are a new category in itself.
The European legislator should remain particularly prudent when it comes to defining the conformity criteria. Satisfactory performance of digital content very often depends on various highly influential factors, such as type of carrier used or quality of internet connection, which cannot be fully controlled by providers'/sellers'. Interoperability criteria are communicated to a buyer in accordance with the existing consumer legislation, nevertheless, they remain out of provider's control. According to the warranty liability for sale of material products, the burden to prove unconformity is always on a buyer. There are no legitimate reasons to introduce a reversed principle for digital content, especially taking into account circumstances described above.
It should be therefore up to the user to prove that product was defective.
Also the key remedies in case of defective digital content products could be aligned with the EU Sales Directive 1999/44.
In case of sales-like contract the rules on time limits on remedies should be transferred from the off-line world. The evolution pace of digital technology is very rapid, and hence products may quickly become outdated purely due to the technological progress. To reflect this specificity, time limits might need to be shorter than for transactions involving material products.
In case of services contract remedies should be available throughout the whole duration of the contract. There should be, however, specific time limit for a notification from the date of occurrence or finding out of defectiveness of the service.
III. Tangible goods
| Section 1 and 2: Problems and need for an initiative on contract rules for digital content products at EU level (question 29- 34) |
In the area of tangible goods a certain degree of targeted harmonization could be beneficial as current divergence of national rules in business-to-consumer (B2C) contracts is quite a big challenge. At the same time, it should be emphasised that recent implementation of the Consumer Rights Directive changed significantly provisions concerning distance sales. It included changes of the general B2C rules in the Polish Civil Law Code creating serious legal uncertainty for Polish companies operating on the digital market. Another change in this area within such a short period of time could be very disruptive for conducting day-to-day business.
We, therefore, believe that any introduction of new regulation at a later stage. It should be considered carefully and preceded by in-depth analysis of its effectiveness, proportionality and cost. Before deciding to move forward with a binding legislation, the Commission should try, first of all, to overcome these barriers by less far-reaching measures. In order to improve consumer's trust and satisfaction from online sales, more emphasis should be put on clarifying existing consumer rights and their execution.
We are also open to discuss the idea of developing model contracts provided that these remain voluntary, simple and with a realistic level of protection. In addition, we believe that clarification of the application of Article 6 of the Rome I Regulation, or other initiatives such as creating a database with differences between member states rules (not fully harmonised) regarding the sale of tangible goods, could be particularly useful for small companies to become aware/better informed? of what can be expected if they decide to direct their activity to other markets.
| Section 3: Content of an initiative (question 35- 51) |
If the Commission, nevertheless, decides to put forward a legislative proposal it should only target business-to-consumer (B2C) contracts. The business-to-business sector where the principle of contractual freedom is fundamental rule should not be the subject of a new instrument. Particular vulnerability that often exists for consumers in the B2C sector does not apply when traders do business with one another, even if one of the contracting parties is a small or medium-size company (SME). Binding provisions are not appropriate for this sector. Traders must be allowed to retain autonomy over the contracts they conclude with other business partners.
Introduction of the ‘sale like at home' principle could be an interesting option to examine. It has a potential to benefit everyone - companies could easily enter new markets without a need to conduct comprehensive research of consumer rules in another Member State. In consequence, consumers would be provided with a wider choice and more competitive offer.
The main rule for establishing conformity should be that the goods correspond to what has been deemed to have been agreed (in type, quantity, quality and other characteristics). The criteria as well as the hierarchy of remedies described in the Sales Directive (1999/44/EC) should apply. The current practice of granting trader choice between repair and replacement in the first instance is a reasonable and practical solution. Giving the consumer free choice of remedies could lead to situations where - in cases of an easily repairable defect - the consumer would be able to opt for direct replacement or reimbursement. This is particularly important for personalized, high-value products or those that would lose substantial value, if returned or resold. It is important to stress that, in case when the lack of conformity is minor, cancellation/rescission of the contract should not be possible.
When it comes to time limits to exercise the remedies, a possible, most balanced solution could be to fully harmonize the provisions of the Sales Directive.
IV. Summary
Incomplete single market hampers development of businesses as well as limits the choice for consumers. However, hasty, EU-wide regulation and uncertainty can create even more harm than legal fragmentation. Ensuring compliance with new, non-flexible rules, especially in a dynamically evolving digital market, is a challenge for all the players operating online. Constantly changing laws engage companies' resources, which could be instead allocated to delivering innovative products and creating new jobs. We therefore call the Commission to fully apply better regulation principle before deciding to put forward another legislative proposal in the field of consumer contracts.
Even though a certain degree of targeted harmonization could be beneficial, we believe that any introduction of new regulation in this area should be considered carefully and preceded by in-depth analysis of its effectiveness, proportionality and cost. It should also ensure technological neutrality and provide for realistic level of protection.
[1] A Digital Single Market Strategy for Europe COM (2015) 192 final
[2] Directive on consumer rights 2011/83/EU
[3] The European Commission's report on On-Demand Audiovisual Markets, 2012
