The interinstitutional negotiations on the supply of digital contracts are still in deadlock over embedded content.
The trialogue meeting of 18 June was unable to settle the issue and therefore the European Parliament is planning to increase the pressure on the Council of the EU to get it to make enough progress on the parallel draft legislation on the sale of goods.
The ‘sales contracts’ package unveiled at the end of 2015 is based on two legislative proposals: - one on the supply of digital content that is currently being negotiated in trialogue and – one on the sale of goods online (and since the end of 2017, offline too), on which the Council has not yet taken a position.
The two issues are intrinsically linked due to the digital content incorporated in tangible goods ('smart goods') that Parliament wants to regulate as digital content, but the Council wants it regulated as tangible goods.
This approach was withdrawn by the Justice and Home Affairs Council on 4 June (see EUROPE 12033).
Technical issues
The trialogue of Monday 18 June was the sixth interinstitutional negotiating meeting.
Ten points were on the agenda – five could be dealt with and three still need minor adjustments, but agreement should be reached. There remain two points that lead to a kind of impasse – the question of embedded content and the question of harmonisation, said Axel Voss (EPP, Germany) on 20 June at Parliament’s legal affairs committee.
We understand that the negotiations on Monday allowed the co-legislators to agree on a ‘limited’ right to compensation in the event of a long-term contract being interrupted. The seller could be compensated in line with the code of electronic communications, in other words when a device is offered with digital content.
The co-legislators are also reported to have decided that the rules on digital content should prevail over those on the electronic communications code for circumvention services (OTTs) (see EUROPE 12035). The future rules would apply to current contracts for conformity problems arising after the directive comes into force.
An ultimatum
But the true political issues lie elsewhere.
The main stumbling block, we are told, is embedded content. Parliament fears sending this issue to the discussions on the sale of goods online and offline, as requested by the Council, and that the latter proposal, which was not initially favoured by the Council (and is still not favoured by Germany) would be dropped.
At Parliament’s legal affairs committee, the co-drafters of the report, Evelyne Gebhardt (S&D, Germany) and Axel Voss (EPP, Germany), have both called on the Council to reach a political agreement in principle (a 'general approach') on the sale of goods in October in order to not having to depend on the European elections.
Gebhardt made it known that she may ask the chairs of Parliament’s committee to directly call on the Austrian Presidency of the Council of the EU for the second half of 2018.
We understand that the Bulgarian Presidency of the Council published an initial compromise text on the sale of goods on 12 June, after the JHA Council’s policy debate. This text includes consensual elements (the duration of the legal guarantee of at least two years) and presents various options for controversial issues (like overturning the burden of proof).
The Austrian Presidency is said to have expressed a desire to work on both these issues. National experts will discuss these questions on 17 and 18 July and 12 and 26 September. (Original version in French by Sophie Petitjean)