Consumer Rights Bill

Written evidence submitted by techUK (CR 20)

Executive Summary

1. The UK technology sector has a number of concerns with the Consumer Rights Bill as introduced to Parliament.

2. Aside from our comments on the principles of the Bill and the text itself, we understand that the Bill process is moving much faster than anticipated and are concerned that it is moving forward too quickly and without adequate scrutiny. We would like to ask that the Bill Committee allows more time for the scrutiny of the Bill, particularly the clauses relating to Digital Content and Remedies.

3. One of our major concerns relate to the quality requirements set out in clause 34(3), specifically that digital content must be ‘free from minor defects’. This term is both too broad and too simplistic, and therefore open to misinterpretation. Furthermore, greater guidance on how clauses will be implemented is required within the text of the Bill itself as opposed to its inclusion within the guidelines and explanatory notes.

4. Software is an incredibly complex product operating in a complex environment, and therefore does not operate in isolation. As the Bill currently stands, software providers will be forced to dramatically slow down their testing and development lifecycles leading to a worse consumer environment which goes against what the Bill is trying to achieve.

5. In order to reflect the complex landscape in which software operates and maximise the best possible consumer experience, the Bill must have an outcome focused approach.

6. Only through the remedy of these concerns will consumers and industry avoid being put into a precarious position by the lack of current certainty and definition within the Bill.

About techUK

techUK represents the companies and technologies that are defining today the world that we will live in tomorrow. More than 850 companies are members of techUK. Collectively they employ more than 500,000 people, about half of all tech sector jobs in the UK. These companies range from leading FTSE 100 companies to new innovative start-ups. The majority of our members are small and medium sized businesses.

Overarching Concerns

7. The Bill fails to understand the complexities of software and Government have misinterpreted what consumers need. The definition of ‘digital content’ taken from the Consumer Rights Directive is open to confusion, and we are concerned that all digital content will be classified under the same banner and that all ‘digital content’ will be treated the same. Greater consideration should be given to complex software, as opposed to more simple digital content such as an app. Since the Bill stipulates that all digital content should be of ‘satisfactory quality’ and therefore ‘free from minor defects’, this could have implications for software that requires regular updates in response to changing risks and threats in the digital environment.

8. The sector requires greater clarification with regards to the implementation of a number of clauses in the Bill. Government do not seem willing to make the necessary detailed edits to the bill, and will not have gone far enough if they only consult on the related guidance. We are therefore asking for Government to acknowledge our concerns within the text of the legislation itself and not just the guidelines. This is to ensure certainty for consumer and industry alike.

9. We have outlined below a number of concerns related to specific clauses. Owing to the tight timeframe of the Bill process we have not been able to go into a significant level of detail. We will of course be happy to provide further clarification and examples of those issues covered should more time be allocated to us doing this.

Digital Content

10. Clause 33 ‘Contracts covered by this chapter’

10.1 The definition of digital content taken from the Consumer Rights Directive is open to confusion, and we are concerned that all digital content (from ebooks and MP3 files to complex Internet security software) may be classified under the same banner and that all digital content will be treated the same. Greater consideration should be given to complex software, as opposed to more static digital content, due the complex environment in which it operates, as set out below.

10.2 Government are provided with the discretion to broaden the scope of the law in this section. We are concerned both around the scope itself, and the uncertainty created as a result of Governments ability to widen the scope of the bill going forward.

10.3 The explanatory notes state that the scope of the law will include software provided over the ‘cloud’. We strongly feel that the full implication of including software over cloud needs further consideration, and what this would mean in practice to the consumer and businesses understood.

11. Clause 34 ‘Digital Content to be of satisfactory quality’

11.1 The Bill stipulates that all digital content should be of ‘satisfactory quality’, which includes a requirement that digital content must be ‘free from minor defects’. We believe that greater clarification is required here to prevent major implications for software that requires updates in response to changing risks and threats landscape and the complex environment in which software operates.

11.2 Not only is the term ‘minor defects’ itself far too broad, but it is not clear what would constitute a ‘minor defect’?

11.3 It is important to clearly acknowledge the differences between a ‘bug’ and ‘free from minor defects’. For example, reasonable ‘bugs’ are expected within complex pieces of software and should not be the basis for seeking remedies other than for that bug to be resolved. Where the revised explanatory notes within the Bill do state that it is common to get bugs, this should be included in the text of the bill itself.

11.4 Fixing minor defects is part of the developmental life cycle of software and ‘defects’ are often linked to specific configurations or operating environments. Due to the way in which software operates with other software or operating systems it’s impossible to always foresee how the specific software in question will operate in this environment.

11.5 The provider may need to make necessary updates to software throughout its lifecycle in order to adequately protect the consumer and they should not be regulated against doing this.

12. Clause 35 ‘Digital Content to be fit for purpose’

12.1 Due to the complexity of the supply chain, landscape, and software itself, it is simply not possible for software providers to guarantee that software will be bug free throughout its lifecycle.

12.2 It is important to note in relation to this clause, that content is rarely modified for individual consumers, and can in many cases be completed on a mass scale involving millions of consumers across the globe. Therefore the term ‘intended purpose’ does not make sense in a market where software is not adapted for individual consumers.

13. Clause 36 ‘Digital Content to be as described’

13.1 This clause does not fully grasp the intricacies of software and the complex environment in which software operates.

13.2 Complex software is not a static product. It needs to evolve in order to continue to meet consumers’ expectations and the purpose for which the consumer bought the product.

13.3 In the case of Internet security software, an update to the software may be necessary for a number of reasons which will not impact the functionality of the software itself. The provider may replace, remove or even add functions to the software to such a degree that it would not meet the original description. The update may be necessary in order to fix a security vulnerability, improve functionality, or to ensure that the software is compatible with other software or operating systems installed on consumers devices.

13.4 The clause fails to appreciate the developmental cycle of software, and if this clause is enacted as currently drafted then software providers may be restricted from providing critical updates to its software, to the consumers disadvantage. This clause would have the opposite effect and instead of protecting consumers, could potentially harm consumer operating and transacting in the digital world.

13.5 The clauses should have an outcome-based focus, which would allow providers to update or modify their software if it benefits the consumer and improves the functionality of the software, regardless of whether it differs from original description.

13.6 Furthermore, consideration should be given to whether Clause 36 could be removed altogether on the basis that the consumer is protected by Clause 35. This would be reliant upon ensuring we create outcome based legislation which is not overly prescriptive.

14. Clause 37 ‘Other pre-contract information included in contract’

14.1 Further consideration must be given to this Clause since some of its consequences appear unlikely. For example, one could infer from the Bill as it currently stands that changes to pre-contractual legislation can only be made when expressly agreed by both trader and consumer - would mean that a trader would not be able to change their address without the express consent of potentially millions of customers.

Remedies

15. Clause 43 ‘Right to repair or replacement’

15.1 As it currently stands Clause 43 fails to understand that in some circumstances it would be in the consumers best interests for the software provider to provide a replacement rather than a repair.

15.2 The related amendment to this clause fails to recognise that if a repair is complex the trader will need appropriate time to repair the fault. As the Bill currently stands the consumer would be allowed to move on to the next stage of the remedy process before the trader has had a chance to repair the fault.

15.3 With regards to complex software, an updates function is part of the constant service provision from the software provider. The Bill would restrict software providers ability to do this and offer a good ongoing consumer experience around their product.

15.4 Not only is it open to misinterpretation as to the justifiable period of time that a how ‘reasonable’ person expects a product to be repaired, but it does not suit the complex environment that software operates within.

Compensation

16. Clause 46 ‘Remedy for damage to device or to other digital content’

16.1 This clause fails to understand both the complexity of software, and the complex environment in which it operates. Complex software can malfunction for reasons that do not relate to the actual design of the software itself, and despite the software industry going to great lengths to minimise such occurrences, it is impossible to guarantee. Therefore, given that the trader will be no longer able to limit its liability, there is a possibility that the provisions contained within the Bill may discourage providers from issuing critical fixes to their software, and therefore impact the overall protection of the consumer.

16.2 It is not clear either what an appropriate amount of compensation would be, or whether a replacement is the same as a repair.

16.3 Greater clarity is required over what remedies would be available to consumers.

February 2014