Documents considered by the Committee on 22 November 2017 Contents

2Digital Single Market: Consumer contract rights and the supply of digital content

Committee’s assessment

Legally and politically important

Committee’s decision

Not cleared from scrutiny; further information requested

Document details

Proposal for a Directive on certain aspects concerning contracts for the supply of Digital Content

Legal base

Article 114 TFEU; ordinary legislative procedure; QMV

Department

Business, Energy and Industrial Strategy

Document Number

(37389), 15251/15 + ADDs 1–2, COM (15) 634

Summary and Committee’s conclusions

2.1This proposed Directive aims to help deliver the Digital Single Market and boost e-commerce. It seeks to fully harmonise consumer contractual rights and remedies in relation to online trade in digital content. It was proposed at the same time as another on contracts for online and other distance sale of goods (physical goods proposal).2

2.2When the Government wrote prior to the General Election in March, it provided an updated estimate that the proposal was likely to be adopted by the end of the year or early 2018. Since it is a Directive, with a two year grace period for implementation, it is unlikely that the UK will have to formally implement it before Brexit. This however does not take account of any transitional/implementation period.3 It may also ease any future trading relationship if the EU and UK consumer protection regimes are aligned post-Brexit. The Government is focussed on reducing divergence between this proposal and the Consumer Rights Act 2015 (CRA) which already regulates in UK law consumer rights in relation to digital content and as such has established the UK as a leader in that field.

2.3At the last meeting of the previous Committee before dissolution in April, it granted a scrutiny waiver in relation to a General Approach expected at the 8–9 June Justice and home Affairs (JHA) Council. This was on the condition that the text met the broad UK negotiation objective of protecting consumers without stifling the UK tech industry. The Minister for Small Business, Consumers and Corporate Responsibility (Margot James) now writes to confirm the agreement of the General Approach, and to inform us that trilogues are not expected to start until late September, with the dossier remaining a priority for the Estonian Presidency.

2.4We thank the Minister for her letter. We would be grateful to be sent a copy of the General Approach text that was agreed.

2.5We look forward to receiving further updates once there is any progress to report from trilogues in late September, particularly as to any change in the timing for adoption of the proposed Regulation or its likely implementation which could have any impact on the UK before its exit from the EU or during any transitional/implementation period.

2.6When she updates us in future, we would ask the Minister to:

a)bear in mind the issues which our predecessors have asked during their past scrutiny, including the question of how, if at all, the Commission’s REFIT review of the EU consumer acquis4 might impact on the trilogues and how aligned the text continues to be with the UK Consumer Rights Act 2015—for example, we are aware of a letter from the Commission to the Council of 31 July 20175 which discusses possible impacts of the REFIT on the parallel proposal on tangible goods in respect of “face-to-face sales”;

b)inform us of any developments in the Article 50 negotiations on transitional arrangements for both UK and remaining Member State consumers who have made digital content and other purchases before Brexit, as to their consumer rights post Brexit; and

c)inform us of any developments in terms of approach to the future trading relationship between the UK and EU and the extent to which the UK may want to (or have to) align with EU consumer acquis.

2.7In the meantime we retain the current document under scrutiny.

Full details of the documents

Proposal for a Directive on certain aspects concerning contracts for the supply of Digital Content: (37389), 15251/15 + ADDs 1–2, COM (15) 634.

The Minister’s letter of 14 July 2017

2.8The Minister for Small Business, Consumers and Corporate Responsibility (Margot James) writes:

“I refer to the Committee’s consideration of my letter of 19 April as reported in the 40th Report of Session 2016–17, in which it kindly granted a waiver from scrutiny in advance of the Meeting of the Justice and Home Affairs Council on 8 June.

“I am pleased to confirm that with the support of the UK the Council agreed a text of a General Approach at that meeting.

“While recognising that the text reflects a balanced compromise among Member State views, we believe it achieves the key objectives of establishing a clear, consistent, and proportionate set of rights for consumers across the EU. In doing so we are also of the view that it contains the right balance of business obligations to achieve an adequate level of consumer protection while not stifling innovation and growth.

“I should like to take this opportunity to provide the Committee with a brief update on how the negotiation in Council progressed, and of the outcome.

“You will recall that the UK has been supportive of the proposal and that we have already regulated in this area in the Consumer Rights Act 2015. Nevertheless, there were elements which had caused us some concern.

“A significant stumbling block emerged during the Slovakian Presidency: that the relationship between the Directive and EU data protection and e-privacy law needed to be better clarified and that any effect on those regimes must be avoided. In the light of the opinion requested from the European Data Protection Supervisor this has now been resolved satisfactorily.

“As expected, the scope of the proposal is wider than that of our domestic legislation because content and services provided in exchange for personal data are included as well as those supplied in exchange for money. However, it is narrower and far less burdensome than the original proposal. We have achieved many significant improvements in line with our overall objectives:

Previous Committee Reports

Fortieth Report, HC 71–xxxvii (2016–17), chapter 3 (25 April 2017); Thirty-fifth Report HC 71–xxxiii (2016–17), chapter 1 (15 March 2017); Eighteenth Report HC 71–xvi, chapter 3 (16 November 2016); Sixth Report HC 71–iv (2016–17), chapter 3 (15 June 2016) and Twenty-third Report HC 342–xxii (2015–16), chapter 4 (10 February 2016).


2 Proposal for a Directive on certain aspects concerning contracts for the online and other distance sales of goods: (37390), 15252/15 + ADDs 1–2, COM (15) 635.

3 See the Prime Minister’s speech in Florence 22 September 2017.

4 Body of EU law, including EU primary, secondary and tertiary legislation and relevant CJEU case law.




28 November 2017