Digital daze

Wilf_4x3.jpgWilf Stevenson on the continuing lack of consumer protection for those downloading games or music

What sort of planet do policymakers in the BIS department inhabit? This week in the Consumer Rights Bill Committee, the government’s Intellectual Property Minister tried to persuade us that digital sales are “different” from sales of physical goods or services; and that as a result consumers should have less protection in the market place. 

Digital Content is vital to the creative sector as well as consumers, and the digital music, video and games market now accounts for 43% of the total UK entertainment sector. The console and PC gaming industry is now worth £1.17bn and 99.6% of the 189 million music singles sold in the UK in 2012 were downloads. Recent research puts the UK as the leading European country for total digital content spend per capita. Digital sales are clearly the future of retail, so this Bill ought to be used to at least get the principles right.                                   

Many of us in the Committee have been surprised to learn that the law in this area is not clear. Digital downloads have been around for nearly 40 years, and the first legal case dates from 1988. But the law has been lagging behind consumer behaviour, so simplification and clarification is urgently needed. Not just to make it easier for businesses to understand and comply with their responsibilities, but also to explain to consumers their rights and help them assert these when things go wrong.

Effective competition delivers better service, lower prices and innovation. But to benefit from this, consumers must have confidence that they can exercise informed choice. A lack of confidence may mean they don’t switch to alternative providers, thereby losing out on the benefits of competition while also allowing unscrupulous businesses to prosper.

The proliferation of portable internet-connected devices, including tablets and smartphones, has provided people with more opportunities to purchase and consume digital content. The pace of development, with a broadening array of new products and services, makes efforts to clarify digital content rights and remedies timely and welcome.

Labour is pressing Ministers to align these rights as far as possible with those for tangible goods and services. In practice, this boils down to the question of whether, when content does not meet quality standards, the consumer should be restricted to a right to a repair or offered a replacement. We believe very strongly that they should have both short- and long-term rights to reject the content, something that both the BIS Select Committee and Which? support.

The government argues that because digital content is not provided on a tangible medium, it "cannot be returned in any meaningful sense". However, consumers acquiring the same material on a DVD or CD will have the rights to reject it. As the Select Committee says: “the different remedies available for tangible and intangible digital content in the Bill would… embed inconsistency into consumer law.” Consumer groups argue that people experience intangible digital content in the same way as tangible content, and therefore expect to be able to reject it and receive a refund if their statutory rights are not met.

Ministers are being very short sighted in dealing with this issue. Having a common redress system for all goods would be logical. But it would also strengthen consumers’ willingness to try new and innovative digital products.

Lord Wilf Stevenson of Balmacara is Shadow Business Minister in House of Lords. He tweets @Missenden50

Published 22nd October 2014

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