Wednesday

24th May 2017

Opinion

Digital content directive makes data count for consumers

  • The digital content directive would introduce rights for consumers in case a game or music subscription they access online malfunctions. (Photo: Sebastiaan ter Burg)

In a recent op-ed, Digital Europe’s John Higgins claimed that the proposed digital content directive threatened the apps development sector because of obligations to return consumer data at their request.

He also said that the European Commission’s proposal contradicts the general data protection regulation.

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  • In today’s digital economy, data has become a comparable asset, even though consumers are not aware of a deal taking place. (Photo: European Commission)

Consumer organisations argue the exact opposite: the digital content directive is vital to promote competition, innovation and to modernise consumer rights.

The Roman law principle "Do ut des" (I give so that you will give) expresses the idea that underpins all human economic interactions. Over past centuries, this required physical transactions, in the form of the exchange of money or goods.

In today’s digital economy, data has become a comparable asset, even though consumers are not aware of a deal taking place.

When consumers use mobile apps, social networks, review websites or any other digital service they have to accept terms and conditions which give the supplier the possibility to collect and use the consumer’s data.

Consumers deserve rights in return

Consequently, the consumer gets a digital service, while the provider uses his data for personalised advertising or other ways to make money.

This economic reality, according to industry figures, amounts to over 30% of the revenues generated online. It is an economic fact that can no longer be ignored by the EU legislator.

It is wrong to say, as Higgins does, that consumer law – such as the present digital content directive – would contradict data protection laws. On the contrary, they complement each other.

While data protection looks at the legal grounds for the collection and processing of personal data and the fundamental right to privacy, consumer law is about providing benchmarks for fairness in business-to-consumer transactions.

The digital content directive would introduce rights for consumers in case an online game or music subscription they access malfunctions. Such rights are currently absent in both consumer and data protection law at EU level.

It’s time to fill this gap, protect consumer adequately across the EU and establish a level playing field for companies.

One of the features of the proposed law is to give consumers the possibility to retrieve their data after the contract has been terminated. This right already exists under current data protection laws, but only for personal data.

The digital content directive provides the next step by covering other consumer data such as user-generated content, reviews or playlists – and not just metadata.

Consumers have a real interest to recover these data after for example switching services. But current consumer legislation does not address those situations.

The lack of regulation around data-based transactions goes beyond consumer law. Companies like Facebook or Google collect and process huge amounts of consumer data that often escape antitrust scrutiny.

As a matter of urgency, competition watchdogs must look at the role of data in today’s digital markets – such as the European Commission did in its recent Microsoft / LinkedIn merger decision.

Enforcers need rules to enforce

But more needs to be done to fully incorporate data as a parameter in competition law enforcement. Recognising data as an economic asset in consumer law – such as the digital content proposal – can be a path forward to achieve that goal.

Regulating data-based consumer transactions will bring legal certainty that market players expect from legislators. Companies cannot innovate if they don't know which consumer rights to apply if there's a problem with their digital product or service.

Enforcers cannot fulfil their public mandate if they do not have clear rules to enforce. Consumers will not trust digital services if they do not have control over their own data if things go wrong.

The draft directive is not perfect and there is always room for improvements.

However, contrary to Higgins’ claims, this is precisely the type of law that both, Europe’s digital economy and European consumers’ need.

Ursula Pachl is deputy director general of The European Consumer Organisation (BEUC) and leads the organisation’s work on the Digital Single Market and on consumer rights and enforcement.

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