On January 1, 2022, a new law came into effect – the Act on the Provision of Digital Content and Digital Services and on the Sale of Goods. What are the key new elements, and what will actually change for consumers?
This topic was discussed on the show "The Law and Themis" by Prof. Dr. Tania Iossifova, an expert in civil and commercial law.
Why was the new law adopted and who does it affect?
The new law fulfills the Republic of Bulgaria's obligation to transpose two EU Directives in this field into its domestic legislation. It applies to contracts concluded after January 1, 2022 – both online and offline (in physical stores).
The law specifies that it concerns contracts for consideration, where the price can be agreed upon in money or through the provision of personal data. It falls within the scope of consumer law (business-to-consumer relations) and further expands the scope of consumer protection. Certain provisions from the Consumer Protection Act (CPA) regarding consumer claims, legal, and commercial guarantees were moved to this new law.
What are the most important new key points?
For the first time, the sale of digital content and digital services is explicitly regulated. This includes:
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Sale of e-books.
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Subscriptions for access to legal information systems or electronic magazines.
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Online games and navigation maps.
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Services offered by online platforms (social networks like Facebook, Instagram).
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Goods with digital elements: The law also covers movable goods that contain digital elements (smart TVs, cars, smart home appliances) and the related liability of traders for non-conformity.
Important rule: In the contract with the trader, a higher level of protection can be agreed upon compared to what is regulated by the law, but not vice versa. Depriving consumers of statutory protection is not allowed, even by referring to foreign applicable law. Clauses that restrict consumer rights are null and void.
Furthermore, the consumer can now legally rely on the qualities of the good or service that are presented in advertisements or public statements made by the trader themselves or by the manufacturer. If the product does not possess the described qualities, the consumer can hold the seller liable.
What are the obligations of traders of digital products?
Traders who sell digital content, digital services, or smart goods must meet several basic requirements to ensure conformity with the law:
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Individual requirements: The product must meet the specific requirements of the customer as agreed upon with the trader.
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Objective requirements: The product must be fit for the purposes for which it would normally be used, possess the expected features, and conform to any trial version.
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Integration with the digital environment: Due to the specific nature of the subject matter, the digital content must be able to integrate with the consumer's devices. Therefore, it is recommended that the trader specifies in the General Terms and Conditions what technical requirements the customer's environment must meet.
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Clear installation instructions: If there are shortcomings in the installation and integration instructions attributable to the trader, they are held liable.
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Provision of updates: The trader is obliged to supply updates in a timely manner to ensure the functionality of the product (e.g., updates for antivirus software or a mobile phone OS). If the consumer was informed but fails to install them, the trader is released from liability.
What are the consumer rights in case of a defect or non-conformity?
Under the new law, the consumer has the following legal remedies:
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Consumer Claim (Рекламация): A request to repair the goods or bring the digital content/services into conformity.
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Proportionate price reduction: This applies to contracts for continuous supply (subscriptions) when the service was functional only during a part of the period.
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Termination of the contract: As a last resort. The trader must reimburse all sums paid without undue delay.
The burden of proof is on the trader. The law introduces a presumption that if the non-conformity becomes apparent within 1 year after the supply of the digital content, it is presumed to have existed at the time of supply.
After the termination of the contract, the trader can block the consumer's access to the service. The content created or provided by the consumer up to that point (e.g., photos on a social network) must be made available to them in a commonly used, machine-readable format.
The difference between a consumer claim, legal guarantee, and commercial guarantee
Many consumers confuse these concepts. Here is the difference:
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The consumer claim (reklamatsia) is the consumer's right to request the free removal of the defect (through repair or replacement). The trader is obliged to register it in a Register of Claims.
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The legal guarantee is a statutory obligation of the trader ensuring that the goods will maintain their qualities.
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The legal guarantee period for goods (including those with digital elements) is 2 years.
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For digital content supplied on a single occasion, the period is also 2 years.
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For continuously supplied digital services, the guarantee is valid for the entire duration of the subscription.
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The commercial guarantee is provided voluntarily by the trader or manufacturer under more favorable conditions (e.g., an extended guarantee of 3 or 5 years). If the advertisement promises better conditions than those in the contract, the conditions from the advertisement apply.
What must traders do to comply with the law?
If you are a trader offering digital content or smart goods, here are the steps you need to take:
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Update your General Terms and Conditions: They must be in clear and accessible language, not be misleading, and clearly outline the rights and obligations of the parties.
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Be careful with advertisements: Closely monitor public statements regarding product features, even when made by other individuals (e.g., influencers) on your behalf.
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Review the instructions for use: Ensure that the installation instructions are complete and accurate.
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Inform about updates: Clearly warn consumers about the consequences if they refuse to install essential software updates.
We are yet to see how case law will interpret and apply the provisions of this new and highly important law for the digital age.