Are consumer regulations keeping up with how we use technology?

Are consumer regulations keeping up with how we use technology?

According to Ofcom's recent 2015 Communications Market Report, smartphones have overtaken laptops as the most popular online device in the UK.

Sacha Wilson, an associate at Bristows LLP, considers some of the legal implications of this trend.

Does this development augur an eventual shrinking of terms and conditions (T&Cs)?

The fact that consumers are now more likely to go online using a smartphone rather than a laptop is unlikely, in itself, to cause a 'shrinking' of T&Cs. The current length and complexity of online consumer facing T&Cs is often a symptom of the process by which these types of T&Cs are drafted.

Taking mobile apps as an example, in practice there can often be a disconnect between mobile app developers and legal counsel. This disconnect means that the T&Cs can be drafted in isolation of the app development process and merely added to the app as an afterthought.

This can result in overly long and complex T&Cs being drafted as lawyers are traditionally more inclined to err on the side of legal conservatism as opposed to aiming for a positive user experience. [To this end, check out our post on drafting terms and conditions and our post on multi-layering.]

It is still therefore a common occurrence for consumers using a smartphone to be required to scroll through several screens worth of T&Cs before being able to access a service.

This problem has been identified by the Competition and Markets Authority (CMA) which recommends in its Unfair Contract Terms Guidance that every detail of information about an agreement doesn't necessarily always have to be included in a single contract document.

The CMA also advises that relying solely on lengthy T&Cs to communicate with consumers may be positively unhelpful. However, a significant proportion of lawyers still seem to take the view that it is better to be safe than sorry and as a result produce lengthy and overly comprehensive T&Cs.

What does this mean for website accessibility and ensuring that people with limited eyesight can access websites?

While technological developments such as haptic feedback and text-to-speech software on smartphones can present opportunities to improve accessibility, it is also the case that limited screen sizes on smartphones compared to laptops present challenges from an accessibility perspective.

The massive increase in smartphone usage has highlighted the importance of making websites accessible from a general usability perspective on mobile devices. It is therefore becoming increasingly important for publishers and ecommerce platforms to ensure that their sites and services are mobile optimised so that they can function with a good level of usability on any device.

However, in relation to disabled users, from a regulatory perspective, while there is legislation in the UK such as the Equality Act 2010 which in certain situations can impose requirements on websites to ensure a reasonable level of accessibility to disabled users (such as those who are blind or partially sighted), accessibility seems unfortunately to remain a relatively low priority for most app developers. Projects such as the Web Accessibility Initiative being run by the World Wide Web Consortium (W3C) may however change this in the future.

Are there any patterns or trends emerging in the law in this area? What are your predictions for future developments?

It has long been the case that consumer facing terms must be drafted in plain and intelligible language--for example under the Unfair Terms in Consumer Contracts Regulations 1999, reg 7(1) (which will be replaced by an equivalent requirement under the Consumer Rights Act 2015, s 64(3) due to come into force in October 2015).

However, there has also been an increasing regulatory trend for more information to be included in consumer T&Cs in an increasingly prescriptive fashion. This was historically the case for heavily regulated sectors such as financial services. However, with the introduction of the Consumer Rights Directive 2011/83/EU, new information requirements were introduced in relation to all consumer contracts and in particular 'distance contracts'.

The Directive introduced a 'model cancellation form' which must be made available to consumers in a way which feels rather out-dated for most digital services (in particular those made available on mobile).

It is, however, worth noting that the Directive does specifically envisage the display challenges of devices such as smartphones and allows at art 8(4) that if there is limited space to display the legally required contractual information, the trader can provide a subset of the required information at the point of purchase with the rest of the information being provided to the consumer 'in an appropriate way' (eg on a separate website).

Another trend emerging in the law in this area is for consumer T&Cs and details of features/functionality of digital services to be presented to consumers using iconography or graphics. The European Commission's guidance on the Consumer Rights Directive suggests a schema of icons which could be used by digital services as a means of satisfying certain of the regulatory information requirements.

A similar concept is currently being discussed in Europe as part of the trilogue negotiations for the new General Data Protection Regulation regarding the use of standardised icons to notify individuals how their personal data is processed.

Regulators are becoming increasingly focused on consumer use of digital services--the European Commission's Digital Single Market Strategy is evidence of this. It seems possible that in the future there will be more regulatory emphasis on the use of iconography and graphics as a means of communicating contractual and other regulatory disclosures to consumers on digital services.

Are there still any unresolved issues lawyers will need to watch out for?

A notable aspect of recent consumer regulation in this area has been the introduction for the first time of a statutory definition of 'digital content'--for example both in the Consumer Rights Directive (implemented in the UK under the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013) and the UK Consumer Rights Act 2015. The introduction of 'digital content' in the legislation has been accompanied by a statutory distinction between contracts for the supply of goods, contracts for the supply of services and contracts for the supply of online digital content.

It is important for lawyers to understand the distinction because, under the Directive in particular, different rules apply regarding consumers' withdrawal rights when they enter into any of these contracts 'at a distance' (which would apply to virtually all e-commerce activity provided via a smartphone).

However, digital content is defined very broadly in the legislation and there is still a great deal of uncertainty regarding whether certain digital services would constitute a 'service' contract or a contract for the supply of 'digital content'. While there has been lengthy guidance from the European Commission, the guidance is not binding and there is still a lack of clarity in this area; it will ultimately be for the courts to decide how the legislation should be interpreted.

So what do you think? How do you think developments will pan out? We welcome your views below.

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

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