On 30 August 2023 the President of Ukraine has signed the Law of Ukraine “On Digital Content and Digital Services” as adopted by the Parliament of Ukraine has adopted on 10 August 2023 (“Law”). The Law introduces regulation of relations between a contractor and a consumer with regard to provision of digital content and digital services, as well as establishes effective legal tools for protecting the rights of such digital content (services) consumers.
This is another legislative step within alignment of Ukrainian law with the EU regulation, in particular with the Directive 2019/770 of the European Parliament and of the Council of 20 May 2019 on certain aspects concerning contracts for the supply of digital content and digital services.
With the Law’s main objective being consumer rights protection, it introduces new digital sphere related terminology, including definitions of “digital content”, “digital service”, “product with digital elements”, “digital environment” and others.
According to the Law digital content is data that is created and made available in digital form (digital content includes, but is not limited to, computer programs, applications, video files, audio files, music files, digital games and e-books). Further digital service is defined as a service that allows a consumer to create, process, store and distribute data in digital form or to access such data, as well as to perform any other actions with data in digital form that was created or uploaded by the consumer or other users of such service (digital services include, in particular, those that allow creating, processing, accessing or storing data in digital form, including file hosting, word processing or games offered in the cloud computing environment and social networks). While digital environment is considered to be hardware, software and any network connection used to gain access to digital content and/or digital services and enabling their use by a consumer.
The Law significantly strengthens the rights of consumers by requiring the contractor, among others, to inform the consumer about the need to update the software, bring the digital content and/or digital service in compliance free of charge in the event of its non-conformity, etc. The Law also introduces criteria (objective and subjective) to the quality of services and cases where the provided content/service does not meet the set quality requirements. The Law does not apply to some categories of services, which are subject to separate regulation, including electronic communications, financial, gambling, medical and some others.
The Law also regulates the services’ performer’s liabilities and legal consequences of non-conformity of digital content and/or digital service as well as of cases of failing to perform the above content and/or service, outlining particularities related to burden of proof applied to the above relations. The legal consequences of providing low-quality content/services are similar to those established by consumer rights protection legislation, for instance the consumer of service/content will have the right to request that the provision of digital content and/or digital service is brought into compliance, or to claim proportionate reduction in price, or to withdraw from the contract unilaterally.
For violation of the requirements of the Law, business entities shall be subject to sanctions in the form of a fine: in the event of violation of the consumer rights provided for by the Law (i) related to the provision of digital content and/or digital services - in the amount of ten times the cost of digital content and/or digital services; (ii) related to the conformity of digital content and/or digital services - in the amount of 300 percent of the cost of the digital content and/or digital services provided in violation.
The Law will come into force on 02 March 2024.
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