Updated update requirements in Germany
A new regulation in Germany forces providers of goods with a digital element to send regular software updates. Find out how this will affect your brand.
Gone are the days of forgotten or not available updates, at least for consumers in Germany. According to a new law passed by the Bundestag (the Lower House of the German Parliament), suppliers of digital products have to provide software updates to their customers.
A happy day for consumers. But are brands, manufacturers and sellers ready?
From 1 January 2022 onwards, suppliers of products with a digital component are obligated to provide software updates.
This includes all “smart” products, like watches, tablets, phones, fridges, fitbits, and anything else that operates with a software, as well as purely digital products like apps, e-books, and streaming content.
The rules aim to protect consumers from the vulnerabilities of digital products and also ensure their continued good quality and useability.
However, the text of the legislation is unclear about the duration of the update services; it only says that the updates are obligatory for the length of product life the consumer can reasonably expect.
Several stakeholders welcomed the new legislation. “This law is a digital revolution. The new digital contract law brings modern rules about digital products into our Civil Code,” said Kristina Schreiber, IT- and digital expert (translated from German by globaleyez).
Another advantage is that the legislation creates order and clear responsibilities in a field that was previously only self-regulated by providers of digital products. The arising legal certainty is beneficial for providers and consumers alike.
Interesting is the way consumer data is handled as a currency by the regulation. Consumers can opt to pay for the updates with money or their personal data. This option finally recognizes the importance and value of personal data.
In addition to software updates, the new law also addresses the issue of warranty.
Up to now, if not specified otherwise, warranty in general had lasted up to six months after purchase, working with the assumption that the defect already existed at the time of buying the product. But from 2022 onwards, this period is doubled, and people can get repairs for 12 months after purchase.
The new law brings many new tasks for brands and distributors. Terms and conditions have to be modified, with special regard to updating contractual provisions about software updates and extended warranties.
Also, the unspecified duration for which the update obligations exist can cause headaches for providers. In order to avoid confusion, providers better specify this in the purchase contract so consumers have a clear understanding of what to expect - and no grounds to sue later on, claiming they expected their newly acquired smartphone to last for twenty years.
On an interesting side-note, we’re looking forward to discovering how sellers of counterfeits will handle the update obligation. Assuming they’ll continue to act as they have been up to now, it’s safe to say they most likely won’t bother to regularly update their fake products to fix the vulnerabilities of their fake or possibly cracked software.
So, while this will be another way to distinguish fakes from original products, the lack of updates will pose new problems for consumers and brands alike. Users of fake products will be even more vulnerable to the defects of said products, while brands - although innocent - can take the majority of the blame for the unsatisfactory goods.
Brands with digital products in circulation in Germany need to get ready to adjust to the new regulation. (And since we’re talking about a country with a very open, international economy and an annual 221.1 billion euros worth of foreign trade, we can safely say that this regulation will affect a lot of brands everywhere on the globe.)
First of all, if you haven’t already done so, ensure that your software products get regular, automatic updates. If you work with authorized sellers and distributors, provide them with the updates on time and make sure they understand their part and are able to send them on to your clients.
Don’t forget to adjust your general terms and conditions and end user contracts. These should contain reference to your new update obligations, especially with regard to the duration you’re prepared to send these on. (Remember, this has to be a reasonable amount of time for the specific product.)
Then, and here comes the tricky part, you have to get your distributors and authorized sellers to comply with the obligations as well.
In an ideal world, we wouldn’t even have to mention this. After all, what would be more ordinary than an authorized seller sticking to their seller agreement? Unfortunately, this is not always the case.
Distributors and sellers have a mind (and business) of their own and sometimes they stray from your agreement. For example, a seller may choose to sell on a sales channel you told them not to. Or, they may decide not to bother with a software update.
Unfortunately, this can fall back on your brand. Disgruntled customers rarely blame random sellers, but tend to pour their anger on the brand whose product they’re having an issue with. And, since we’re talking about an actual law here, you could face legal fines and every kind of unpleasant attention that comes when you’re found on the wrong side of the law.
Don’t worry, though. You won’t have to go around, checking if all your distributors comply with the new regulation and the rest of your partnership agreement. We can do that for you.
Two of globaleyez’s services are especially well-fitted to the task of discovering whether your distributors comply with the digital update regulation.
Our test purchases and mystery shopping programmes have repeatedly proven to be essential in discovering how a business partner behaves. We can purchase in over 50 countries, posing as regular customers and documenting everything to obtain tangible (and if it comes to that, even legally admissible) proof of your business partner’s conduct.
We can do this with physical as well as purely digital products like software. In case of the latter, our test purchases can be accomplished from start to finish within a few business days, meaning that you’ll have definite knowledge about your business partner’s conduct in such a short time that you’ll be able to take action accordingly before any legal repercussions would loom over your brand.
Building on the result of our test purchase and mystery shopping, we start to create a comprehensive report about the behaviour of your business partners with various tools and methods. For example, we supplement the test purchase with software-based monitoring to see their actions on chosen marketplaces (both on- and offline, if necessary) and social media.
Once complete, we present our findings and advise you on potential next steps.
Our test purchase and partner compliance services ensure you stay in the loop and learn how your business partners are representing your brand to customers.
The new software update obligations in Germany, while really helpful for consumers, can pose difficulties for brands and sellers. Non-compliance with the regulation may bring unpleasant legal repercussions for brands, even if they’re not at fault due to a potential misconduct by a business partner.