DIRECTIVE 1999/44/EC on certain aspects of the sale of consumer goods and associated guarantees
European Parliament and Council, DIRECTIVE 1999/44/EC on certain aspects of the sale of consumer goods and associated guarantees, 1999/44/EC, 25.05.1999
Recital 1: “Whereas Article 153(1) and (3) of the Treaty [now art. 169 TFEU, ed.'s note] provides that the Community should contribute to the achievement of a high level of consumer protection by the measures it adopts pursuant to Article 95 thereof [now art. 114 TFEU, ed.'s note: art. 114 TFEU concerns the harmonisation by the EU of the national provisions concerning the internal market]”
CJEU, case C-128/11, Oracle v. UsedSoft: “(39) According to settled case-law, the need for a uniform application of European Union law and the principle of equality require that the terms of a provision of European Union law which makes no express reference to the law of the Member States for the purpose of determining its meaning and scope must normally be given an independent and uniform interpretation throughout the European Union (see, inter alia, Case C-5/08 Infopaq International  ECR I-6569, paragraph 27; Case C-34/10 Brüstle  ECR I-9821, paragraph 25; and judgment of 26 April 2012 in Case C-510/10 DR and TV2 Danmark, paragraph 33). (40) The wording of Directive 2009/24 does not make any reference to national laws as regards the meaning to be given to the term ‘sale’ in Article 4(2) of the directive. It follows that that term must be regarded, for the purposes of applying the directive, as designating an autonomous concept of European Union law, which must be interpreted in a uniform manner throughout the territory of the European Union (see, to that effect, DR and TV2 Danmark, paragraph 34). (41) That conclusion is supported by the subject-matter and purpose of Directive 2009/24. Recitals 4 and 5 in the preamble to that directive, which is based on Article 95 EC, to which Article 114 TFEU corresponds, state that its objective is to remove differences between the laws of the Member States which have adverse effects on the functioning of the internal market and concern computer programs. A uniform interpretation of the term ‘sale’ is necessary in order to avoid the protection offered to copyright holders by that directive varying according to the national law applicable. (42) According to a commonly accepted definition, a ‘sale’ is an agreement by which a person, in return for payment, transfers to another person his rights of ownership in an item of tangible or intangible property belonging to him.”
From this, we can infer that the notion of “sale” that applies to Consumer Sales Directive is uniform and independent for the whole EU, and can correspond to the notion of “sale” clarified in the UsedSoft case.
But: Art. 1(2)(b): “consumer goods: shall mean any tangible movable item”.
The question is therefore if the Directive can apply also to digital content supplied through the Net, and not on a tangible medium like CDs, DVDs etc.
HELBERGER, at page 33, suggests several reasons to apply the Consumer Sales Directive also to digital content provided through download:
1. “this distinction does not square with the technical reality, where digital content is more and more made available via Internet”, and “the decision of the licensor is often a matter of logistics or marketing”;
2. “this approach would […] be more in line with settled case law in a number of Member States”;
3. this approach would fit better with the proposal of the European Commission for a Regulation on a Common European Sales Law (COM(2011) 635 final): indeed, there, even if contracts for the supply of digital content and sales contracts are not superimposed but juxtaposed, they are “both treated substantively on an equal footing” (HELBERGER, p. 33).
However, if we look at § 55 of the UsedSoft case, we see that there is stated that – from art. 4(2) of the Software Directive – it doesn't appear that the provision is limited to tangible copies: indeed, the article “by referring without further specification to the ‘sale ... of a copy of a program’, makes no distinction according to the tangible or intangible form of the copy in question.”
That may mean that – on the contrary – seen the reference of the Consumer Sales Directive to tangible copies, the irrelevance of the tangible/intangible nature of the software copy illustrated in the UsedSoft case (§ 59) may not be extended to this Directive.
On the other hand, at § 61 of the UsedSoft case, it is stated that: “from an economic point of view, the sale of a computer program on CD-ROM or DVD and the sale of a program by downloading from the Internet are similar”; therefore, excluding the applicability of the Consumer Sales Directive when digital content is provided (with a contractual operation identifiable as a “sale” according to the UsedSoft definition) through the Net may contrast with art. 169 TFEU's and Recital 1 Directive 1999/44/EC's requirement of achieving an “high level of consumer protection”.
We must also remember that, when the Consumer Sales Directive has been introduced, the intangible transfer of digital content was not a reality yet, so its provisions (and particularly its definition of consumer goods) have been shaped without having in mind this phenomenon. Therefore, the adjective “tangible” matched to goods shouldn't be seen as the fruit of the decision of excluding intangible digital content from the applicability of this Directive. On the contrary, expressed was the will of granting an high level of consumer protection, and thus this should prevail in the interpretation of the notion of “tangible good”.
This interpretation may, for example, focus on the nature of the good in itself once provided to the consumer, rather than on the nature of the delivery: e.g. if I download the copy of a software, I have it on that tangible medium that is my hard-drive, so the Directive can apply; if I use the software through cloud computing, there is no tangible good provided to the consumer, so the Directive doesn't apply.
See HELBERGER N., Digital Consumers and The Law. Towards a Cohesive European Framework, The Netherlands, Kluwer Law International, 2013.
See LOOS M., MAK C., Remedies for buyers in case of contracts for the supply of digital content, p. 7.
Sales contracts constitute the objective scope of the Directive, but they're not defined by it.
- We should apply the definition of "sale" stated by Oracle v. UsedSoft, because Recital 1 of the Directive refers to art. 114 TFEU, and § 41 of the decision states: "Recitals 4 and 5 in the preamble to that directive, which is based on Article 95 EC, to which Article 114 TFEU corresponds, state that its objective is to remove differences between the laws of the Member States which have adverse effects on the functioning of the internal market and concern computer programs. A uniform interpretation of the term ‘sale’ is necessary in order to avoid the protection offered to copyright holders by that directive varying according to the national law applicable".
Digital Consumers and The Law. Towards a Cohesive European Framework affirms that it is possible to apply the conformity test to service contracts also.
- I need to find jurisprudence on the matter.
- Even if it was possible, it remains anyway an obstacle: conformity is evaluated only with reference to "tangible movable goods" (however, GUIBAULT L., Accommodating the Needs of iConsumers: Making Sure They Get Their Money's Worth of Digital Entertainment says that the Directive could perhaps be applied by analogy to e-goods; (see also Digital Content Contracts for Consumers, at the start of paragraph "Practice: Pragmatic Approach")). However - in the contractual terms which accompany the service which makes the item usable - it is often stated that the service can be discontinued at any time and that the provider can't be considered liable for this discontinuation: isn't this contrary to what the consumer can legitimately expect, unless the provider has clarified this aspect in the advertising or in his communications? Or, instead, is the notice included in the contractual terms per se sufficient to satisfy the requirement of conformity, and/or does the fact that this aspect concerns the service component of the product (even if without it the good is useless) exclude the applicability of the Directive?
- Even if it was possible to apply the Directive also to the service component, its conformity can be tested (and therefore is required) only at the moment of conclusion of the contract. Doesn't this aspect highly reduce the effectiveness of the provision with reference to those contracts which establish recurring or continuing performances? See for a potential partial solution art. 105 par. 4 CESL (commented in Remedies for buyers in case of contracts for the supply of digital content, p. 15).
It is not possible to identify objective benchmarks concerning what consumers can legitimately expect from goods equipped with a digital component: everything may be allowed, everything may be prevented.
- In those cases, provider's statements are the element which counts the most in carrying out the conformity test. Can we say that provider's sole burdens are mandatory rules imposed by the legislator (e.g. the person having a right to use the computer program can't be forbidden form making a copy of it in so far it is necessary in order to use it; the lawful acquirer of a copy has the right to perform the acts that are included in the exclusive right of the copyright holder, when these acts are necessary in order to carry out an error correction)? (And, if we can, are there mandatory rules that can result to be useful when IoT products are involved?) Or - given that, when IoT products are concerned, the digital component is mixed with traditional products which the consumer has always expect something from (e.g. a thermostat must make the consumer able to regulate the temperature) - that statement should be redimensioned?