More consumer protection when buying apps and software

On November 3, 2020, the Federal Ministry of Justice and Consumer Protection presented drafts for the implementation of the Digital Content Directive and the contractual provisions of the Modernization Directive for improved consumer protection when purchasing software and apps as well as on online marketplaces.

Key Facts

The Federal Ministry of Justice and Consumer Protection presented drafts on consumer protection on November 3, 2020.
Consumers receive warranty rights for digital content and services, including apps and software.
Rights also apply to contracts where consumers offer personal data in exchange.
Providers must provide updates and security updates for digital products.
Online marketplaces such as eBay and Amazon have new information obligations for consumers.
Consumers must be informed about contractual partners, whether entrepreneurs or consumers.
New regulation for the resale of tickets is introduced, providers inform about original prices.

Key points of the law implementing the directive on certain aspects of contract law relating to the provision of digital content and digital services:

The bill gives consumers broad warranty rights for digital content (e.g., music and video files, e-books, apps, games, and other software) and digital services (e.g., social networks, cloud applications, and cloud storage services). The regulations also apply to physical data carriers on which digital content is stored (e.g. music CDs, DVDs, etc.). Irrespective of the type of contract, consumers will be granted warranty rights of the kind that German law has hitherto only provided for purchase agreements, contracts for work and services, or rental agreements, for example the right to subsequent performance, reduction of the purchase price, and termination of the contract.
In future, consumers will also be entitled to these warranty rights in the case of contracts in which the consumer provides personal data instead of paying a price (“payment with data”). This applies, for example, to the use of social networks.
The draft also imposes an update obligation on digital product providers. If consumers have purchased a digital product, the entrepreneur also owes the provision of function-maintaining updates and security updates. In the case of ongoing contractual relationships, this obligation applies for the entire duration of the contract; in the case of contracts to be performed on a one-time basis, such as sales contracts, it applies for a period that the consumer can reasonably expect.
Key points of the Act Amending the Civil Code and the Introductory Act to the Civil Code in Implementation of the EU Directive on Better Enforcement and Modernization of Union Consumer Protection Rules

In the future, online marketplaces such as eBay or Amazon will be subject to significant information requirements for the benefit of consumers:

In the future, they will be obliged, among other things, to disclose the essential criteria of the ranking of search results and their weighting by no later than the beginning of the ordering process.
In the future, they must inform consumers whether their potential contractual partners are entrepreneurs or consumers.
The draft also contains a new regulation on the resale of tickets via ticket exchanges for the benefit of consumers. In the future, the provider shall provide information about the original ticket price set by the organizer.
In addition, a duty to inform is introduced for providers if a price has been personalized on the basis of an automated decision.

The corresponding PDF can be found as follows

-> Draft Act Amending the Civil Code and the Introductory Act to the Civil Code in Implementation of the EU Directive on Better Enforcement and Modernization of Union Consumer Protection Rules

-> Draft law implementing the directive on certain aspects of contract law relating to the provision of digital content and digital services

Author: Marian Härtel

Marian Härtel ist Rechtsanwalt und Fachanwalt für IT-Recht mit einer über 25-jährigen Erfahrung als Unternehmer und Berater in den Bereichen Games, E-Sport, Blockchain, SaaS und Künstliche Intelligenz. Seine Beratungsschwerpunkte umfassen neben dem IT-Recht insbesondere das Urheberrecht, Medienrecht sowie Wettbewerbsrecht. Er betreut schwerpunktmäßig Start-ups, Agenturen und Influencer, die er in strategischen Fragen, komplexen Vertragsangelegenheiten sowie bei Investitionsprojekten begleitet. Dabei zeichnet sich seine Beratung durch einen interdisziplinären Ansatz aus, der juristische Expertise und langjährige unternehmerische Erfahrung miteinander verbindet. Ziel seiner Tätigkeit ist stets, Mandanten praxisorientierte Lösungen anzubieten und rechtlich fundierte Unterstützung bei der Umsetzung innovativer Geschäftsmodelle zu gewährleisten.