2022 is the year when it comes to digital consumer protection. This is because the implementation of the Sale of Goods Directive ((EU) 2019/771) and the Digital Content Directive ((EU) 2019/770) in particular will comprehensively amend and harmonize national consumer law on the basis of European requirements.

What is it about?

The European trade in goods and services has become more digital at a rapid pace in recent years. Streaming services, apps, smartphones, smart homes and digitally connected cars: the national regulations that applied until the current amendment were no longer suitable for these and other digital offerings. In particular, the requirements in B2C business for information obligations, warranty and the concept of defects, as well as term, termination and revocation, were only suitable for these new business models to a limited extent. The new regulations, some of which will already apply from January 2022, are intended to close precisely this gap. In this article, we summarize some of the most important changes and show where the needs for improvements are.

New in the sale of consumer goods: goods with digital elements

With the implementation of the Directive on the Sale of Goods, the legislator has adapted and specified the law on the sale of goods with digital elements in the German Civil Code (GCC) as of January 1, 2022. In doing so, the legislator not only completely redefined the concept of material defects in section 434 GCC but also created the new sections 475 b, c and d GCC, thereby strengthening the rights of consumers (see section 474 (2) GCC).

These provisions supplement the regular sales contract provisions with special provisions on the “material defect of a good with digital elements” (section 475 b GCC) and “material defect of a good with digital elements in case of permanent provision of the digital elements” (section 475 c GCC). Section 475 d GCC also contains “Special Provisions for Withdrawal and Compensation for Damages.

Material defect of goods with digital elements

In these newly created paragraphs, the legislator specifies the concept of material defects for “goods with digital elements” (section 475 b (2) GCC). Accordingly, goods with digital elements are free of material defects if at the time of transfer of risk and with regard to an update obligation they meet the

  • subjective requirements,
  • the objective requirements,
  • the assembly requirements and the
  • installation requirements.

Although section 475 b (5) GCCGCC generally contains an exclusion of liability on the part of the entrepreneur, for example if the consumer does not install an update that has been provided, this exclusion of liability is itself subject to various conditions that the entrepreneur must fulfill in order to be able to invoke the exclusion of liability. Thus, the entrepreneur is only not liable for a material defect that is solely due to the lack of an update if

  • he has informed the consumer about the availability of the update and the consequences of failure to install it;
  • and the fact that the consumer failed to install the update or installed it improperly was not due to defective installation instructions provided to the consumer.

Thus, in order for the entrepreneur to be able to invoke this exclusion at all, he must at least ensure in his processes that he always informs consumers about available updates and, as part of this information, also points out the consequences of failure to install them.

Material defect of goods with digital elements in case of permanent provision of the digital elements

Section 475 c GCC regulates the material defect of a good with digital elements in the case of permanent provision of the digital elements.

Section 475 c GCC shall apply to contracts in which permanent provision for the digital elements has been agreed. If the parties have not agreed on a provision period, section 475 b (4) no. 2 shall apply accordingly (section 475 c (1) sentence 2 GCC). This means that the provision period is based on the period that the consumer can expect based on the nature and purpose of the goods and their digital elements and taking into account the circumstances and nature of the contract.

Pursuant to section 475 c (2) GCC, the entrepreneur shall be liable for ensuring that the digital elements comply with the requirements of Section 475 b (2) (see above) during the provision period, but at least for a period of two years from the delivery of the goods.

Faciliation of withdrawal, damages and reversal of burden of proof

Section 475 d (1) GCC also makes it easier for consumers to withdraw from the contract and claim damages.

The period for shifting the burden of proof in section 477 (1) GCCGCC in favor of consumers was extended from six months to one year.

Sections 312 ff. GCC – The New Regulatory Regime of Digital Products

The implementation of the Digital Content Directive also resulted in changes to sections 312 et seq. GCC. One innovative aspect is the introduction of section 312 (1a) GCC, according to which the consumer can also provide the entrepreneur with personal data instead of paying a price (section 312 (1) GCC) or commit to doing so. The provision of personal data is thus equated with payment.

Also noteworthy is the newly introduced section 327 q GCC, which addresses the consequences under contract law of data privacy declarations made by consumers after the conclusion of a contract. According to this section, the exercise of data protection rights and the issuance of data protection declarations shall not affect the validity of the concluded contract. In addition, section 327 q (2) GCC grants the entrepreneur (!) an extraordinary right of termination without notice if the consumer revokes a data protection consent he has given (Article 7 (3) of the GDPR) or objects to further processing of his personal data (Article 21 of the GDPR). The extent to which this provision is compatible with the prohibition of tying under data protection law and with consumer protection in other respects remains to be seen.

New: “Terminate now” button

From 1 July 2022, consumers should be able to terminate contracts concluded online (continuing obligations with the exception of financial services) more easily again (section 312 k GCC, new version, see BT Drs. 19/30840, page 6). To this end, a “Terminate now” button must be introduced on the website. Specifically, this is to be done as follows:

  • The consumer must be able to make a declaration of ordinary or extraordinary termination on the website on which he has concluded the contract. For this purpose, a cancellation button must be set up on the website in a clearly legible manner and labeled with nothing other than the words “Terminate contracts here” (“Verträge hier kündigen“).
  • The cancellation button must lead the consumer directly to a confirmation page on which the consumer can provide information (i) on the type of cancellation and, in the case of extraordinary cancellation, on the reason for cancellation, (ii) on its clear identifiability, (iii) on the clear designation of the contract, (iv) on the time at which the cancellation is to end the contractual relationship and (v) on the rapid electronic transmission of the cancellation confirmation to him. In addition, there must be a (vi) confirmation area with the inscription “terminate now” („jetzt kündigen“), with the activation of which the consumer can submit the termination declaration.
  • The buttons and confirmation pages must be permanently available and immediately and easily accessible.

It is important to note that this amendment also applies to contracts concluded before July 1, 2022.

The bitkom practical guide on implementing the digital termination button on websites is also recommended.

Also new in this context is the amendment to section 309 no. 9 GCC. According to this amendment, clauses in general terms and conditions that provide for a longer term than two years for continuing obligations that involve the regular delivery of goods or the regular provision of services or work by the user are not permitted. Automatic extensions of these contracts are also generally inadmissible. The only exception is if the extension is for an indefinite period of time and the consumer is granted the right to terminate the contract at any time with a notice period of no more than one month.

Important: This amendment to section 309 no. 9 GCC only applies to contracts concluded after 1. March 2022. Old contracts are not affected by this particular amendment.