Is it time to upgrade digital content laws?

This article was first published on Lexis®PSL Commercial on 6 June 2016. Click for a free trial of Lexis®PSL.

Commercial analysis: Microsoft was recently criticised for its design of a pop-up encouraging users to upgrade to Windows 10. We explore the wider implications of this type of commercial practice in light of consumer protections.

What are the key issues with Microsoft’s pop-up window strategy?

A pop-up will appear on your screen with an option to upgrade now or later as it has done for previous upgrades. With previous upgrades, the only way to decline the upgrade has been to click on the cross (X) button in the top right hand corner to close the window. The difference with the most recent version of the pop-up is that clicking the X to exit the pop-up has been treated as consenting to the Windows 10 upgrade. So after users learning over and over again that they could click the X to decline the upgrade, Microsoft changes tack and this action now starts the upgrade.

This has been described as a ‘nasty trick’ and as ‘heavy handed tactics’ in order to get you to upgrade. In addition, if the pop-up appears while you are away from your computer, your system will automatically begin the update at the scheduled time, upgrading to Windows 10 without you explicitly approving the upgrade.

Users who have tried to roll their computers back to previous versions claim they have ended up having to completely reinstall their computers from scratch.

Does consumer legislation apply to such upgrades?

The Consumer Rights Act 2015 (CRA 2015) for the first time introduces remedies specific to the purchase of digital content including paid for content and content that comes free with goods, services and other digital content that the consumer has paid for. Under CRA 2015, ‘digital content’ is defined as ‘data which are produced and supplied in digital form’.
Likewise, the Consumer Protection from Unfair Trading Regulations 2008, SI 2008/1277 (CPR 2008) has been amended to apply to digital content. Therefore, upgrades such as the

Microsoft Windows 10 upgrade would be caught by these pieces of legislation. The UK is leading the way in enacting domestic legislation in this area and other European countries are starting to follow.

What sorts of rights of redress do users have?

CPR 2008 has three main sections:

  • the general ban on unfair commercial practices
  • misleading (actions and omissions) and aggressive practices which are assessed in light of the effect they have, or are likely to have, on the average consumer, and
  • the black list which contains the list of those practices which are unfair and thus banned.

It is considered a misleading omission if a trader does not display information clearly. In addition, traders who fail to take no for an answer will be committing an offence. A practice is considered aggressive if the average consumer’s freedom of choice or conduct is significantly impaired. It could be argued that Microsoft has employed these tactics in getting users to upgrade to Windows 10.

If you incur a financial loss that you wouldn’t have done if it weren’t for the trader’s actions, you will be able to make a claim for damages.

Under CRA 2015, digital content must be of:

  • satisfactory quality
  • fit for purpose, and
  • match the description given by the trader

These requirements are also stated under CRA 2015 to apply to modifications or upgrades made by the trader or third parties. The trader can improve features and add new features to digital content as long as the content continues to at least match the description given by the trader (unless they have expressly agreed a change with the consumer).

Unlike with goods, there is no right of rejection with digital content. There will however be a right to:

  • repair or replacement, or
  • partial refund (except where there is a copyright issue and the consumer can then claim an immediate full refund)

However, in the trader’s favour, CRA 2015 explanatory note does comment that:

‘In the majority of cases, updates benefit consumers.

Requiring consent for every update would create problems for businesses, both due to the logistics of contacting every consumer and getting their consent, and the problems that would arise when some consumers do not accept updates, thus resulting in many different versions of software in circulation and unnecessary disputes with consumers when digital content stops working due to lack of updates.’

The explanatory note comments that the requirement to comply with the standards applicable to digital content does not prevent a trader updating digital content, as long as:

‘The contract stated that such updates would be supplied (although a term permitting such updates could be assessable for fairness under the unfair terms provisions in the CRA). The digital content still meets the quality rights following any updates.’

Under the requirements in CRA 2015, terms that allow a trader to vary unilaterally the characteristics of digital content may be unenforceable unless they have a valid reason to make the change. For example, enhancing a product or protecting against a security threat may be judged as a valid reason for changing the characteristics whereas introducing a feature that collects the details of the consumer’s contacts without their consent would probably not be.

What should be borne in mind when advising on user-interface design?

So that a trader does not risk falling foul of consumer regulation, user-interface design should:

  • not mislead the consumer
  • provide clear options to accept, reject or reschedule the update
  • be transparent
  • provide all information that a consumer will need to make an informed decision regarding the update, and
  • ensure that by clicking on the X this will not start the update

What are the trends in this area? What are your predictions for the future?

Back in 2011, the EU banned pre-ticked boxes on shopping websites meaning customers would actively have to opt-in to extras. The general trend in this area is that everything is getting more consumer-friendly and fairness to the consumer is paramount. The law in this area is likely to become ever more in favour of the consumer, particularly in relation to digital content.

Interviewed by Alex Heshmaty. The views expressed by LexisPSL Legal Analysis Interviewees are not necessarily those of the proprietor.


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