The new law “On Digital Content and Digital Services” comes into force on March 2 – what you need to know

If you provide digital services or work with data that is created and made available in digital form, including computer programs, applications, video files, audio files, music files, digital games, and e-books, the new legislation will affect your business.

The list of digital services and content provided in the law is not exhaustive and may also include

• SaaS (software as a service) services
• online games;
• streaming services (music, films, online television, online publications and publications);
• digital services and content on social networks and in the cloud;
• file hosting services;
• supply of media content in electronic format (broadcasts, films, books, music, images, publications).

This means that the law primarily applies to players in the IT market, telecommunications, marketing, and other related areas.

At the same time, the law does not apply to the following: medical, financial, or electronic communication services (such as Internet access, mobile communications, etc. within the meaning of the Law of Ukraine “On Electronic Communications”); online gambling; free distribution of open source software if the personal data provided by the consumer is used by the contractor solely for the purpose of improving such software; provision of public information by public authorities, etc.

The Law regulates the provision of digital content and/or digital services, defines the criteria for conformity of digital content and/or digital services, describes the rights and obligations of the contractor and the consumer, and introduces the institution of contractor liability.

Here are a few important features of the law that are worth noting:

• In the event of a dispute, the contractor has the burden of proving that the digital service or content was provided.
• The provider is obliged to inform the consumer about the need to update the software.
• The digital content or service is provided in the latest version unless otherwise provided by the terms of the agreement.
• If the digital content/service provided does not comply with the law’s requirements, the consumer has the right to demand the provision of digital content/services brought into compliance, a proportional reduction in price, or to withdraw from the agreement.
• Any non-compliance of the digital content or service resulting from improper integration into the consumer’s digital environment shall be deemed a non-compliance if the integration was carried out by the contractor or a person acting on their behalf; or was carried out by the consumer in accordance with instructions provided by the contractor containing deficiencies.
• If the agreement provides for the one-time or multiple provision of digital content and/or digital services, the contractor is liable for any non-compliance with the requirements of the new Law that existed at the time of the provision of digital content and/or digital services and was discovered within two years from the date of provision of the content or service.
• The consumer may terminate the agreement by sending a notice to the contractor in electronic (digital) format. The agreement shall be deemed terminated from the moment the contractor receives the consumer’s notice of cancellation.

According to the law, the State Service on Consumer Protection will ensure the protection of consumers’ rights in digital content and services and will be entitled to impose fines on violators. The amount of fines will be determined by the State Service of Ukraine on Food Safety and Consumer Protection, taking into account the circumstances of a particular case.

The law provides for a fine of ten times the value of the digital content or service if the violation is related to the provision of such content or service and three times the value of the digital content or service if the violation is related to inadequate quality, and if the digital content or service was provided by an individual entrepreneur who does not keep mandatory records of income and expenses or if the digital content and/or digital service was provided in exchange for the consumer’s personal data, the fine is set at fifty tax-free minimum incomes (or UAH 850).

In order to avoid fines, I recommend that you review the terms of your contracts and website offers for the provision of digital content and digital services in advance to avoid violating the requirements of the new law.