The use of digital products has increased significantly in the past few years, and even more so due to the pandemic. Directive (EU) 2019/770 on contracts for the supply of digital content and digital services and Directive (EU) 2019/771 on the sale of goods (together, the Directives) aim to harmonize the legal framework for the sale of digital products in the EU and create a high level of consumer protection. Another goal is to promote the sustainability of digital products. The Directives have now been transposed into national law in Germany by way of amendments to the German Civil Code.
Content of the new provisions
A new type of contract: Consumer contracts for digital products
Previously, German law did not contain any specific provisions on consumer contracts for digital products. The new section 327 et seq. now implements rules on digital products.
Digital products include:
- Digital content (e.g., software, e-books, apps, digital music files, or digital games)
- Digital services (e.g., streaming services, messenger services, software as a service, or webinars) (together, Digital Products).
The new provisions on Digital Products apply when a consumer pays money or data for a Digital Product.
The new provisions also apply to so-called package contracts. Package contracts are contracts on Digital Products and other content, such as non-digital services. The new provisions, however, only apply to the digital part of the agreement. They do not apply to, inter alia, agreements other than package agreements or agreements on Digital Products even if the organization provides the service via digital means, or to financial service agreements.
Update obligation of the seller
One major novation is the sellers’ obligation to update the Digital Products. This obligation extends to updates that are necessary to ensure the Digital Products remain in compliance with the purchase agreement (no “upgrade” obligation). Updates include (i) function-maintaining updates and (ii) security updates. Updates must be provided free of charge.
The seller is obliged to provide the updates (i) where the Digital Product is made available on a permanent basis, for the duration that it is made available, or (ii) where the Digital Product is sold, at least for as long as the consumer might expect based on the nature and purpose of the Digital Product and considering the circumstances and type of agreement. This is a key contractual obligation, the breach of which could lead to the product being deemed defective and thus give rise to liability.