24 Jan What is new in the Italian Consumer Code

The Consumer Code (Legislative Decree no. 206/2005) has recently been subject to important legislative amendments aimed at transposing European rules envisaging stricter consumer protection, with particular attention being made to those concerning the supply of digital content and those in Directive (EU) 2019/771 (Sale of goods Directive) and Directive (EU) 2019/770 (Digital content and digital services Directive)[1].

An overview of the amendments made to the sale of goods Directive (Articles 128 to 135-septies of the Consumer Code) and to the supply of digital content and digital services Directive (Articles 135-octies to 135-vicies of the Consumer Code) is provided below.

Sales of goods

Legislative Decree no. 170 of 4 November 2021, implementing Directive (EU) 2019/771, amends the so-called Consumer Code[2] as of 1 January 2022 with respect to sales contracts[3] between consumers and sellers (B2C relationships) concluded online or via traditional channels.

The Italian Legislator seems to have adopted a more protectionist approach to the consumers’ benefit, stemming from the information asymmetry that gives rise to a series of information duties upon the seller. These information duties – arising prior to the conclusion of the contract (e.g., with public statement) – if not fulfilled, can trigger pre-contractual liability for the seller. Thus, the new amendments to the Consumer Code seem to display a trend of contractualizing informational duties that would previously not have been included in a contract.

The content of some of the main provisions, as amended or introduced in the Consumer Code (Arts. 128 to 135-septies) is described below:

• • • the conformity of the goods must be assessed in the light of both subjective and objective requirements. With respect to the subjective requirements, the goods must be in line to what is stated in the contract of sale, be feasible for any specific use agreed upon by the parties and be equipped with the updates provided for by the contracts. With respect to the objective requirements, the goods must, inter alia, be of sufficient quality in terms of their durability, workability, security and compatibility which are generally common to same type and which the consumer may reasonably expect. Particular consideration must be given to the issuing of public statements made by or on behalf of the seller, or other persons in previous links of the chain of transactions, including the producer, particularly in advertising or on the labelling;
    • the seller is liable for any lack of conformity which exist at the time when the goods were delivered, and which becomes apparent within two years of that time. If the contract is about a continuous supply service for a longer period, the seller shall be liable for any lack of conformity of digital content or of a digital service that occurs or becomes apparent during the time of supply under the sale contract[4];
    • the reporting of flaws may be notified within 26 months from the delivery of the goods, whereas for second-hand goods it may be limited to one year. If the defect becomes apparent within one year after the delivery – and thus no longer within six months – it is presumed to have already existed at that time. For goods with digital elements within continuous delivery services, the seller is burdened – for the duration of two years – with proving that the digital content or service was in conformity;
    • in case there is a defect in the goods supplied, several remedies exist to rectify the defect. One way is through replacement wherein no cost shall be claimed (by the seller) for the normal use of the replaced goods before its replacement. Alongside this remedy, the repair, a proportionate price reduction and the termination of the contract are also viable options. It is worth noting that the consumer is not entitled to terminate the contract if the lack of conformity is of minor importance, the proof of which lies upon the seller[5];
    • in regard to the allocation of liabilities to actors involved in the supply chain, the amendment to Art. 134 of the Consumer Code should be mentioned. The amendment provides that where the seller is liable to the consumer because of a lack of conformity resulting from an act or omission by a person in previous links of the chain of transactions, the seller shall be entitled to pursue remedies against the person or persons liable in that chain within one year of the performance of the service. An agreement to the contrary or waiver of the seller’s right of redress is therefore no longer permitted.

The supply of digital content or digital services

The above-mentioned provisions do not apply to contracts for the supply of digital content or a digital service, unless they are incorporated into or interconnected with goods which are the object of a contract of sale relating to such goods[6]. The regulation of the supply of digital content and services has been reformed by Legislative Decree no. 173/2021 implementing Directive (EU) 2019/770 in Italy, whose provisions (set out in the new Chapter I-bis of Title II of Part IV of the Consumer Code) apply to the supply of digital content or digital services which occurs from 1 January 2022, with the exception of the right of redress and the rules on the modification of the digital content or service, which only apply to contracts concluded as from that date.

The rules of the new Chapter I-bis of the Consumer Code apply to contracts in which the consumer pays a price as well as to those contracts in which the consumer provides or undertakes to provide personal data as consideration for the digital content or service. However, such data must not be processed with the sole purpose of providing the service.

As to the quality of the digital content/service, the provisions set out subjective and objective requirements. According to subjective requirements, the content/service must:

• • • correspond to the description, quantity and quality provided for in the contract and to present the functionalities, compatibility, interoperability and any other characteristics as required by the contract;
    • be fit for any particular use agreed between the parties;
    • be supplied with all accessories and instructions concerning any required installation and customer assistance, as required by the contract; and
    • be updated as stipulated by the contract.

On the other hand, according to the objective requirements, the content/service must:

• • • be adequate for the purposes for which the digital content/service of the same type would normally be used for;
    • be of the quantity and have the qualities and performance characteristics, also with regard to functionality, compatibility, accessibility, continuity and security, that are usually found in digital content or digital services of the same type and that the consumer can reasonably expect, taking into account any public statements made by or on behalf of the trader or other subjects in previous links of the chain of transactions (e.g., advertising messages and labelling, public statement);
    • where relevant, be supplied with any accessories and instructions;
    • comply with any trial or preview version made available.

In terms of updates, the new amendments highlight that if the contract concerns a continuous supply service or in accordance with the expectations that the consumer may have built-up (in line with the customs of the sector and the goods received), updates must be provided throughout the entire duration of the contract. In addition, the incorrect integration of the digital content or service into the consumer’s digital environment may be deemed as a lack of conformity where the integration has been carried out by the trader or where it has been carried out by the consumer and results from a shortcoming in the integration instructions provided by the trader. In any event, if the consumer does not install, within a reasonable time period, the updates provided for, the trader shall not be held liable for any lack of conformity resulting solely from the absence of that relevant update, provided that he has informed the consumer of the availability of the update and the consequences of not complying with it.

As far as conformity is concerned, it must be ensured for the entire duration of the supply of digital content or service if it is continuous. The guarantee of conformity shall be offered for flaws which become apparent within two years after supply, while the consumer protection lawsuit shall be time-barred to a maximum period of 26 months with the burden of proof (for showing conformity of the goods) lying with the trader.

The following remedies are available to the consumer: restoration of conformity, price reduction and termination of the contract pursuant to Art. 135-octiesdecies.

With respect to the management of personal data, the new amendments provide that, upon termination of the contract, the trader is prohibited from using any content other than personal data which has been provided or created by the consumer in the context of the use of the digital content or digital service provided by the trader unless such content:

1. 1. 1. is irrelevant outside the context of the digital content or digital service provided by the trader;
      2. relates only to the consumer’s activity in using the digital content or digital service provided by the trader;
      3. has been aggregated by the trader with other data and cannot be disaggregated or otherwise without disproportionate effort; or
      4. has been jointly generated by the consumer and other persons, and other consumers may continue to use the content.

Except in the situations referred to in points a), b) or c), in the scenario that, at the consumer’s request, the trader makes available to the consumer content other than personal data, which has been provided or created by the consumer when using the digital content or service, the consumer shall have the right to retrieve such digital content free of charge and without hindrance from the trader, within a reasonable time period and in a commonly used and machine-readable format.

In any event, the obligations arising from the so-called GDPR (Regulation (EU) 2016/679) remain unaffected.

Lastly, there is the provision relating to the management of changes to the digital content/service according to which these are permitted in the case of long-term supply so long as where it is not necessary to ensure compliance, the following prerequisites are in place:

1. 1. 1. the contract allows for such a change and provides a valid reason for it;
      2. such modification is carried out without additional cost to the consumer;
      3. the consumer is informed of the modification in a clear and comprehensible manner; and
      4. in cases where the change adversely affects the consumer and the consequences are not negligible, the consumer is informed, with reasonable notice on a durable medium, about how and when the change is made and about the consumer’s right to withdraw from the contract (within 30 days) or about the possibility of maintaining the digital content or the digital service without making such a change. However, it must be noted that the right of withdrawal is excluded if the consumer keeps the digital content without modification and if the conformity of the digital content/service is preserved.

Conclusions

In light of the above, there is a pressing need to revise the terms and conditions of contracts of sale, both online and offline, as well as those concerning the supply of digital contents/services, in order to adapt them to the recent amendments made to the Consumer Code.

[1] See Directive (EU) 2019/771 of the European Parliament and of the Council of 20 May 2019 on certain aspects concerning contracts for the sale of goods, amending Regulation (EU) 2017/2394 and Directive 2009/22/EC, and repealing Directive 1999/44/EC: https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32019L0771&from=IT and Directive (EU) 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: https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32019L0770&from=IT

[2]Legislative Decree no. 2005/206 (commonly known as the Consumer Code): https://www.normattiva.it/uri-res/N2Ls?urn:nir:stato:decreto.legislativo:2005-09-06;206!vig=

[3] As provided for by Art. 128(1) of the Consumer Code, contracts of sale shall be treated in the same way as contracts of exchange and supply, as well as contracts for the supply of goods to be manufactured or produced.

[4] See Art. 133(1) and (2) on seller’s liability of the Consumer Code.

[5] See Art. 135-bis (5) on the topic of “remedies” of the Consumer Code.

[6] Further exceptions as to the applicability of the rules of Chapter I-bis of the Consumer Code are set out in Art. 135-nonies.