New legislation on online sales and the provision of digital services

The activity of the trader is subject to regulation even when the user of digital services does not buy a product but only provides his data.

What is it about?

On 19 March 2021, the new Law on the Provision of Digital Content and Digital Services for the Sale of Goods was promulgated.It has been adopted in order to implement into Bulgarian law the provisions of Directive (EU) 2019/770 of the European Parliament and of the Council on certain aspects of contracts for the provision of digital content and digital services and Directive (EU) 2019/771 of the European Parliament and of the Council on certain aspects of contracts for the sale of goods. The new law aims to address gaps in the material relating to the provision of digital content and services to consumers.

The law will enter into force on 1 January 2022, while provisions of the Consumer Protection Act (CPA) have also been repealed.

Are you affected by the new legislative changes?

To begin with, the Law regulates only relations between traders on the one hand and consumers on the other. In other words, if your relationship is purely business-to-business, it is not affected by the new legislative changes.

Who then is affected by the law?

•     Traders who conclude contracts for the sale of goods

Goods can be any kind of movable property. This includes goods that have already been manufactured as well as those that are yet to be manufactured.

Goods that contain digital elements are also included.In particular, these are those that cannot perform their functions without digital content, e.g. smartphone, laptop, smart home appliances, smart TVs, etc. This term has been introduced into our legislation for the first time. What is specific here is that the goods and the digital content may be subject to the same contract, to which the same rules will apply, namely those for the sale of goods that contain digital elements. However, they may also be subject to two separate contracts, one for the goods and one for the digital content, in which case different rules will apply to the separate contracts.

Goods sold under execution, second-hand goods sold at public auction and live animals remain outside the scope of the law.

It does not matter whether you trade these goods online or in a shop..

• Traders who provide digital content and services

'Digital content' is data that is produced and made available in digital form.

•  This includes goods such as electronic games, computer programs, e-books, audio files, etc.

A "digital service" is a service enabling:

the user to create, process, store or access data in digital form, or

the sharing or any other interaction of data in digital form entered or created by the user or by other users of that service.

• This includes all the familiar applications for cloud services, social media, messaging and the like.

Outside the scope remain:

non-digital services;

electronic communication services, except interpersonal communication services that do not use telephone numbers - e.g. Facebook Messenger is covered;

healthcare;

gambling services;

financial services;

software offered by a trader through an open source open source licence where the user does not pay a price and the personal data provided by the user is processed by the trader solely for the purpose of improving the security, compatibility or interoperability of the specific software;

the provision of digital content, where the digital content is made available to the general public in a manner other than the transmission of signals, as part of a creative performance or event, for example digital film screenings;

the provision of digital content in accordance with the Access to Public Information Act by public sector bodies and public law organisations within the meaning of the Access to Public Information Act.

But what is specific here? 

Even if you provide digital content or digital services without being paid , your activity is still covered by the law if, in order to receive the service, users provide you with their personal data.. In this regard, in case you use personal data for any commercial or non-commercial purposes (e.g. cookies and ad targeting, direct marketing) other than to provide the service or fulfill a legal obligation, you should comply not only with GDPR regulations but also with the regulations of the new law.

What's new? 

If you've already established that you fall under the regulation of the law, you're probably wondering what are the new regulations you need to consider and adhere to. Below you will find a brief summary of some of the key points.

• Objective requirements.

The trader is responsible not only for the subjective requirements, i.e. what is expressly agreed between him and the consumer, but also for the objective requirements for conformity of the goods or services. The law expressly provides that they must be fit for the purposes for which goods or services of the same kind are normally used, have the qualities of the sample or model which the seller has presented, have the characteristics of other goods or services of the same kind, etc.

•   Specific requirements for the provision of digital content and services.

Requirements are introduced to inform and provide the user with updates, including security updates, necessary to keep the digital content or digital service compliant.

Explicit legal prerequisites for the trader to be able to modify the digital content or digital service alone are also laid down. E.g., the modification must not be subject to any additional costs on the part of the consumer, the possibility to modify must be already regulated in the contract, etc.

• Recourse.

The law expressly provides that if the goods or services do not meet the individual or objective requirements for compliance with the contract, consumers have the option to make a claim, obtain a proportionate price reduction or cancel the contract.

In these cases, if the non-compliance is due to an act or omission by a person upstream in the chain of commercial transactions, the seller is entitled to claim damages against the person or persons responsible and against the developer of the digital content or digital service where the latter is responsible.

• Complaints.

There is also a new regulation of consumer complaints, as the CPA no longer applies in this part.

A complaint about digital content or a digital service can be made within:

•  2 years from provision - where it is provided in a single act or through a series of separate acts;
•  the entire duration of the contract - where continuous provision is provided over a fixed period of time.

A claim for goods may be brought up to two years from the date of delivery. As regards goods containing digital elements:

•   2 years from delivery - where the supply of the digital content is a single supply;
•  2 years from supply, where the digital content or digital service is to be provided continuously over a specified period of time;
• the entire duration of the contract, where the continuous provision of digital content or digital service is envisaged for a period longer than two years.

Conclusion

The new law takes into account the development of digital services and the need for more detailed regulation in order to maximise consumer protection, and this has implications for the operation of the law. In this regard, please note that once the law enters into force on 1 January 2022, it will apply to all contracts that fall within its scope, regardless of whether they were concluded before or after that date.

The content presented does not constitute legal advice or consultation, but is only intended to inform traders and consumers of the main points of the new Law on the Provision of Digital Content and Digital Services for the Sale of Goods. 

Should you require the resolution of a specific legal issue, case, etc., please do not hesitate to contact us.