What does the Consumer Rights Act 2015 mean for providers of digital sports content?

Published 31 March 2016 By: Poonam Majithia

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This article provides a summary of the key provisions of the Consumer Rights Act 2015 (the “CRA”) that sports content providers should consider when supplying digital content to consumers. The CRA came into force in the UK on 1 October 2015.

 

Why is digital content being regulated under the CRA?

The digital content market has grown exponentially in recent years. However, unlike other goods and services, digital content is intangible and, because of advances in technology, requires regular updates. Further, digital content cannot be “returned” if it is faulty and, as it can be easily copied, content providers are reluctant to give refunds.

Because of these particularities, standard consumer rights do not provide adequate protections and remedies to consumers in respect of digital content. The CRA therefore introduced provisions that specifically govern the supply of digital content to consumers.

 

What type of sports content does the CRA apply to?

Digital content” is defined as “data which are produced and supplied in digital form”.1 The definition is purposely very wide and will encompass any digital content that is downloaded, streamed or otherwise accessed from the internet.2

Only paid content is covered

The CRA only applies to digital content that is paid for or digital content that is free but comes with paid-for goods or services or paid-for digital content.3

For example, where a consumer pays for an online streaming service and is supplied with a free download of the online streaming service platform the digital content provisions in the CRA would also apply to the platform download. Payment can take the form of a one-off sum or an ongoing subscription.

Standalone free digital content is therefore not subject to the CRA unless the free content causes damage to a consumer’s device or to other digital content (e.g. an app downloaded by a consumer puts a virus onto their smartphone or tablet) and the damage would have been avoided if the digital content provider used reasonable care and skill.4

This provides consumers with redress without having to show that the digital content provider of the free content intended to cause damage or that they were negligent. Demonstrating that the provider did not use reasonable care and skill is an easier standard to meet. In such cases, consumers are entitled to require the digital content provider to repair the damage caused (often a more practical remedy than paying damages) or provide adequate compensation.

Examples of the types of digital sports content covered

  • Smartphone and tablet applications that provide sports-related statistics, data, news and media. This would include apps provided by clubs, teams or competition organisers as well as apps provided by sports news providers, sports channels and betting companies.

A number of English Premier League football clubs have recently announced digital engagement partnerships with technology providers (such as Manchester United with HCL and Chelsea with WIPRO) to create “digital experiences” for fans.5 Much of this digital content is also likely to fall within the CRA’s definition if it is paid-for.

  • Digital platforms that consumers are required to download in order to stream or download paid-for sports content. This would include on-demand players and online streaming platforms such as SkyGo, paid for channels on YouTube or the NOW TV app. Freely available content on streaming platforms such as YouTube would not be covered unless the consumer has to pay to access the streaming platform.
  • Digital media, either downloaded or streamed. This would include on-demand sports programming (such as highlight shows, game replays and news coverage) as well as the supply of live content.

However, programming that is provided for free, for example via BBC iPlayer or on BBC Sport would not be covered.

  • Sports publications provided in a digital format, for example books or magazines provided in the form of a download or online journals and subscribed-for editorial content accessed online.
  • Sports-related games provided online, over social media or through an app.

Territorial application

The CRA applies to digital content providers making content available to consumers resident in the UK, regardless of whether they are established in or outside the UK. Where a digital content provider is based abroad but pursues or directs its supply to the UK, the rights provided by the CRA apply even if the contract for the supply of digital content is governed by another country’s law.6

Applies to content made available to consumers

The CRA applies to digital content made available to consumers but does not apply to business to business contracts. For example, where a Premier League football club engages a technology provider to create a digital experience for fans and the digital content is faulty, the Premier League club could not rely on the CRA. However, the fans, who are the ultimate consumers of the product, would be able to enforce their rights under the CRA.

What are the obligations on providers of digital sports content subject to the CRA?

As with tangible goods, digital content subject to the CRA should be:

  1. of satisfactory quality,
  2. fit for purpose; and,
  3. match any description given.

In addition, there is an implied term that the digital content provider has the right to supply the digital content namely, that it has the right to use any intellectual property rights in the digital content.7 In the sports context, this can include having the right to broadcast live content or sports programming.

Satisfactory quality

Whether digital content is of satisfactory quality will depend on:

  • its condition (e.g. visual quality for media content);
  • freedom from minor defects;
  • safety;
  • compatibility; and,
  • durability (i.e. whether it can cope with operating system updates).

Guidance issued on the CRA states that consumers expect there to be minor defects in some forms of digital content and in these cases the digital content provider will not necessarily breach the satisfactory quality requirement. However, consumers would also expect such minor defects to be fixed by an update and if a consumer has paid a high price for the content or the defect affects even the basic functionality of the digital content, then the consumer is more likely than not to be able to rely on the satisfactory quality requirement.8

So if a consumer downloads a platform through which he or she views live sport but the commentary is slightly unclear at some points in the broadcast, the problem does not affect the consumer’s overall ability to view the content. Further, the digital content provider may subsequently provide an update to the platform which fixes the issue. However, if the technical fault was so severe such that the content froze every few minutes, the consumer would be able to allege that the platform is not of satisfactory quality.

Matching description

Under the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013 (the “CCRs”), a trader must provide the consumer with certain information about the goods or services being sold so that the consumer can make an informed decision about their purchase. This includes details of the trader’s identity and address, total price of goods or services or ongoing subscription costs, cancellation information and delivery and performance arrangements.9

In relation to digital content, consumers should also be provided with details of the product’s main characteristics, functionality, technical protection measures, compatibility requirements and, in the case of downloads or streamed services, any bandwidth or memory requirements.

Further, under the CRA, any information provided about the digital content or the digital content provider and its services under the CCRs will be treated as included as terms of the contract.10 As such digital content providers should therefore ensure that digital content matches any pre-sales information provided under the CCRs as well as any descriptions in advertising and labelling.11

For instance, advertising for a virtual basketball gaming app states that players can share their scores on social media. However, this functionality only works on the US version of the app and not the UK version. By advertising this functionality in the UK, the gaming app provider has breached the consumer’s rights under the CRA.

Updating or modifying digital content

Under the CRA, digital content providers are able to update or make modifications to the digital content provided that it enhances existing features or adds new features (i.e. is an improvement). Consent must also be obtained from the consumer beforehand for example by including a right to make updates and modifications in the terms and conditions of sale.

Following the implementation of an update or modification, digital content:

  1. must continue to match the description provided to the consumer upon purchase; and
  2. should not be reduced in quality (for example in terms of operating system compatibility or visual quality).12

As such, removing a feature that has been included in a description given of the digital content, even if the particular feature is hardly used, would breach the description requirement under the CRA, unless explicit consent to change the pre-sale information has been obtained from the consumer.13

For instance, if a paid-for fan engagement app for a particular sports team contained a feature that would allow fans to share their attendance at a particular game, and this feature was removed with a subsequent app update, a consumer should be presented with a consent box to check prior to downloading the update to confirm that they accept the removal of this feature.    

 

Who is liable to the consumer for any breaches under the CRA?

The consumer can seek to enforce their rights against the party with which they entered into a contract for the supply of the digital content.14 This is likely to be the digital content provider itself or a retailer.

For example, if a consumer has an ongoing subscription with a digital content provider to watch or download sports content and such sports content is faulty, the digital content provider will be liable to provide the consumer with a remedy as the consumer is likely to have contracted with the provider on its terms and conditions.

Equally, where, for instance, a sports news app or an e-publication is bought via an online store (like the Google Play Store), the consumer is likely to have contracted on the retailer’s terms and conditions and therefore the retailer will be liable to provide the consumer with a remedy. The party liable is required to repair or replace the faulty digital content. If this is not possible, then the consumer may also be entitled to compensation. Further detail on the remedies available is provided below.

Mixed supplies

Where a consumer is unable to use digital content because of a problem with their network connection (and not because the content itself is faulty), the digital content provider or retailer will not be held liable. Instead, the consumer can rely on its rights under the supply of services provisions of the CRA15 against the internet service provider or mobile network operator which is providing the network connection.

This scenario is likely to arise in the context of streaming, for example, where a consumer has a subscription to stream sports content but is unable to watch the content because of the bad quality or speed of the network connection.

In some cases a consumer will be contracting with an entity for the supply of services and the supply of digital content (a “mixed supply”). This could arise where companies offer package deals that include access to digital content as well as the network connection itself,16 for example where a telecoms provider (such as Sky or Virgin) provides a consumer with a phone and broadband connection, satellite TV and a subscription to sports channels. In this situation, both the supply of services and supply of digital content provisions in the CRA will apply.  

The digital content supplier will also not be liable if there is an issue with the consumer’s device for example where there is a technical fault or insufficient memory means that an app cannot be downloaded.

Risk transfer

The risk in the digital content transfers from the supplier to the consumer when:

  1. the digital content reaches the consumer’s device; or
  2. the digital content reaches another trader (usually an ISP or a mobile network operator) who the consumer has contracted with for a service to deliver the digital content to their device.17

The digital content supplier will therefore not be liable for any faults that occur following the risk transfer. However, they will still be liable for faults that existed when the digital content was supplied or updated, but which were not discovered until after purchase and, under the CRA, faults which are discovered within the first six months after purchase are deemed to have existed at the time of purchase.18

Cancellation rights

Under the CCRs, a consumer has a general right to cancel their contract for the supply of goods or services within 14 days following the purchase. This right to return or receive a refund is not conditional upon there being an issue with the goods or services.

However, as digital content can be easily copied and in some cases (for example, streamed live sports coverage) is not capable of cancellation once viewed, the consumer loses their right to cancel the purchase of digital content once it has been downloaded onto their device or the streaming of digital content has started.

Digital content suppliers should therefore ensure that consumers are aware that they are waiving their right to the 14-day cancellation right beforehand.19 This can be done by requiring consumers to check a box with an acknowledgement notice prior to downloading or streaming the digital content.

If the consumer does not waive this right, they will have to wait until the cancellation period has ended before they can download or stream the digital content, even when they have already paid for it. If digital content is supplied as part of an ongoing subscription, the 14-day cancellation right still applies.20 For example, a consumer subscribes to receive a weekly sports e-publication. He or she receives the first edition 7 days after subscribing but can decide to cancel the subscription before the second edition. It is worthwhile noting that the 14-day cancellation right is not renewed each time he or she receives an edition.

 

What remedies are available to consumers under the CRA for being supplied with faulty digital content?

As digital content can be easily copied, the principal remedy to consumers who are supplied with faulty digital content is repair or replacement rather than a refund.21 Consumers are able to obtain a price reduction of up to 100% on the purchase of the digital content where repair or replacement is impossible.22 This situation might arise where the digital content was supplied by a retailer who is not able to offer repair or replacement services, or if it is completely impossible to download the content and no alternative is available.  

Digital content suppliers should repair or replace faulty digital content within a reasonable time following notification from the consumer and without causing significant inconvenience to the consumer.23 For example, a consumer downloads a platform for viewing paid-for sports content onto their mobile phone device but the download is faulty and the content does not play smoothly on the platform. The trader offers to repair the download but the consumer would have to send their mobile phone to the trader for the repair, which would be inconvenient. It would be more convenient for the trader to provide a replacement download of the platform.

 

What should sports content providers be doing to ensure that they are complying with the CRA?

Sports content providers whose supply of digital content is subject to the CRA should:

  • review their terms and conditions of sale and online purchase processes to ensure that they are compliant with the CRA, for example, that they contain:
    • an explicit right to update or modify the digital content;
    • all the relevant pre-sales information; and
    • a mechanism to notify consumers that they are waiving their cancellation rights when downloading digital content;
  • have adequate quality control processes in place;
  • think carefully about how to describe the digital content so that any such descriptions continue to be accurate following any updates or modifications.  

Liability under the CRA in relation to the supply of digital content cannot be restricted or excluded in the terms and conditions.24 However, a digital content provider can restrict its liability for damage to a consumer’s device or to other digital content as long as the restriction is fair.25

 

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Author

Poonam Majithia

Poonam Majithia

Poonam is a lawyer in the intellectual property team at CMS Cameron McKenna. Her areas of interest include the exploitation of media rights, brand protection, advertising law and ambush marketing.

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