Oleksandr Kozhukhar
AVELLUM, Kyiv
o.kozhukhar@avellum.com

Olha Rudevych
AVELLUM, Kyiv
o.rudevych@avellum.com

Background and alignment with the EU laws

On 2 March 2024, the Law of Ukraine ‘On Digital Content and Digital Services’ No 3321-IX (the 'Law') entered into force. It implements European Union Directive (EU) 2019/770 on certain aspects concerning contracts for the supply of digital content and digital services, in parallel with similar transposition efforts across the EU Member States.

The Law shares the key objectives set out in the EU Directive, namely to enhance consumer protection in the context of agreements with service providers regarding digital services or digital content (such as regarding mobile applications, electronic games and e-books). To achieve this, the Law establishes rules on the conformity of digital content and services with contractual terms, the remedies available in cases of non-conformity and the parameters for the modification of digital content and services.

Scope of application

The Law governs relationships between service providers (acting either directly or indirectly) and consumers in relation to the supply of digital content or digital services. It provides expansive definitions and includes a non-exhaustive list of covered digital content and services, which includes:

• video and audio files;
• computer programs;
• e-books;
• digital games; and
• digital services that allow the creation of, processing of, access to or storage of data in digital form, including file hosting, word processing or games offered in a cloud computing environment and social media.

The scope of the Law extends to arrangements where content is delivered via tangible media (such as flash drives or other physical carriers) when these physical components function exclusively as carriers for digital content. Additionally, the Law applies to scenarios involving tailored digital content or services developed specifically to meet individual consumer requirements. Further, the Law governs transactions where consumers provide personal data in lieu of monetary payment, for instance, where consumers consent to the processing of their personal data for marketing purposes.

Exclusions

Consistent with the EU Directive, the Law expressly excludes from its application the following services or goods:

• tangible goods with integrated digital elements (like pre-installed applications);
• services where digital components are not essential to the transaction;
• services governed by other laws, such as e-communications services, financial services, medical services and gambling; and
• digital content/services provided to public audiences (such as open-source software), subject to certain conditions.

Regulatory requirements

The service provider must supply the consumer with the digital content or service within a reasonable period of time, without undue delay, after the conclusion of the contract (unless agreed otherwise). The digital content or service must meet certain subjective and objective requirements. The service provider must also ensure that the content or service does not violate any rights of third parties, including intellectual property rights.

Subjective requirements for conformity

The digital content or service is considered to be in conformity with the contract if the following subjective criteria are met:

• the description of the digital content, its quantity, quality, functionality, interoperability, compatibility and other features conform with the terms of the contract;
• the digital content or service is fit for the purpose for which the consumer requires it, as agreed by the parties;
• the digital content or service is supplied with all attachments, accessories, applications and instructions, including on its installation, as required by the contract; and
• the digital content or service is supplied in the most recent version available and with subsequent updates, unless otherwise provided by the terms of the contract.

Objective requirements for conformity

Further to complying with the subjective requirements for conformity, the digital content or service must comply with the following objective criteria:

• it must be fit for the purposes for which digital content or services of the same type would normally be used, considering the technical requirements stipulated by the relevant laws;
• it must be of the quantity and in compliance with certain quality requirements, including in relation to functionality, compatibility, accessibility, continuity and security, which are usual for digital content or services of the same type and which the consumer may reasonably expect to receive under the terms of the contract or based on any public statement made by the service provider or other persons involved in the chain of provision of the digital content or service, rendered in any form accessible to the consumer, particularly in advertising or on labelling (subject to some exceptions).

The service provider must inform the consumer about the need to update the software, which supports the proper functioning of the digital content or service, including software updates aimed at protecting data and maintaining the compliance of the digital content with the terms of the contract.

If the contract provides for the continuous supply of digital content or digital service over a period of time, the digital content or digital service must be in conformity with the relevant requirements throughout the duration of that period.

Penalties

The Law establishes the consequences of non-compliance with the Law. Depending on the type of consumer rights violation, the service provider may be subject to the following fines:

• up to 1000 per cent of the value of the digital content or service for a violation related to the provision of the digital content or service; and
• up to 300 per cent of the value of the digital content or service for a violation related to the compliance of the digital content or service with certain criteria.

In certain cases, the consumer also has the right to demand that the digital content or service be brought into compliance with the terms and conditions of the contract with the service provider, demand a reduction in the price or reimbursement of money or terminate the contract.

Further steps

The Law stipulates that all service providers must undergo mandatory registration procedures with the E-Consumer Portal, which is a publicly available online platform designed to facilitate interactions between consumers, service providers and the national consumer protection authority. The E‑Consumer Portal has not yet been launched and is expected to begin operating no later than three years after the new Consumer Protection Law, otherwise known as the Law of Ukraine ‘On Protection of Consumers’ Rights’, enters into force.

Once the E‑Consumer Portal is launched and service providers are registered, such service providers will be required to ensure that the information remains up-to-date, while consumers will be able to file a complaint via the platform in circumstances where their rights arising from the receipt of digital content or digital services have been violated.