### in order to meet the expectations of consumers and ensure a clear - cut and simple legal framework for suppliers of digital content offered on a durable medium , in relation to conformity requirements and remedies available to consumers for non - conformity , this directive should apply to goods such as dvds and cds , incorporating digital content in such a way that the goods function only as a carrier of the digital content . the directive should apply to the digital content supplied on a durable medium , independently whether it is sold at a distance or in face - to - face situations , so as to avoid fragmentation between the different distribution channels . the directive 2011 / 83 should continue to apply to those goods , including to obligations related to the delivery of goods , remedies in case of the failure to deliver and the nature of the contract under which those goods are supplied . the directive is also without prejudice to the distribution right applicable to these goods under copyright law . ### in order to meet the expectations of consumers and ensure a clear - cut and simple legal framework for suppliers of digital content offered on a tangible medium , in relation to conformity requirements and remedies available to consumers for non - conformity , this directive should apply to digital content integrated in goods such as household appliances , toys and storage devices where that digital content is embedded in such a way that it operates as an integral part of the goods and cannot easily be un - installed by the consumer , unless the seller proves that the lack of conformity lies in the hardware of the good . to the same avail , this directive should also apply to goods such as dvds and cds , incorporating digital content in such a way that the goods function only as a carrier of the digital content , unless the seller proves that the lack of conformity lies in the hardware of the good . directive 2011 / 83 should continue to apply to those goods , including the obligations related to the delivery of goods , remedies in case of the failure to deliver and the nature of the contract under which those goods are supplied . this directive is also without prejudice to the distribution right applicable to those goods under copyright law .


### the growth potential of e - commerce has not yet been fully exploited . the digital single market strategy for europe29 tackles in a holistic manner the major obstacles to the development of cross - border e - commerce in the union in order to unleash this potential . ensuring better access for consumers to digital content and facilitating businesses to supply digital content is necessary to boost the union ' s digital economy and stimulate overall growth . _________________ 29 com 192 final . ### the growth potential of e - commerce has not yet been fully exploited . this directive tackles major obstacles to the development of cross - border e - commerce in the union in order to unleash&#160 ; its full&#160 ; potential . ensuring better access for consumers to digital content or digital services , providing remedies for consumers in case of lack of conformity or a failure to supply the digital content or digital services and facilitating businesses to supply digital content and digital services is necessary to boost the union ' s digital economy , stimulate overall growth and increase consumer trust in&#160 ; the digital single market .


### the commission shall , not later than on [ the date of five years after entry into force ] review the application of this directive and submit a report to the european parliament and the council . the report shall examine , inter alia , the case for harmonisation of rules applicable to contracts for the supply of digital content against counter - performance other than that covered by this directive , in particular supplied against advertisement or indirect collection of data . ### the commission shall , not later than on [ the date of five years after entry into force ] review the application of this directive and submit a report to the european parliament and the council and the european economic and social committee taking full account of the process of scrutiny and review on the application and implementation of this directive . the review process shall include meaningful and detailed consultation and involvement with member states and consumer , legal and business organisations at union level . the report shall examine , inter alia , the case for harmonisation of rules applicable to contracts for the supply of digital content against counter - performance other than that covered by this directive , in particular supplied against advertisement .


### any lack of conformity which exists at the time the digital content is supplied ; and ### any lack of conformity which exists at the time the digital content or digital service is supplied ;


### the significance of the lack of conformity with the contract for attaining the purpose for which the digital content of the same description would normally be used . ### the significance of the lack of conformity with the contract for attaining the purpose for which the digital content or digital service of the same description would normally be used .


### due to the specific nature of digital content with its high complexity as well as the supplier ' s better knowledge and access to know how , technical information and high - tech assistance , it is the supplier who is in a better position than the consumer to know the reasons for the digital content not being in conformity with the contract . the supplier is also in a better position to assess whether the lack of conformity with the contract is due to incompatibility of the consumer ' s digital environment with the technical requirements for the digital content . therefore in case of a dispute it should be for the supplier to prove that the digital content is in conformity with the contract , unless the supplier proves that the consumer ' s digital environment is not compatible with the digital content . only where the supplier proves that the consumer ' s digital environment is not compatible with the interoperability and other technical requirements , it should be for the consumer to prove that the digital content is not in conformity with the contract . ### due to the specific nature of digital content with its high complexity as well as the supplier ' s better knowledge and access to know how , technical information and high - tech assistance , it is the supplier who is in a better position than the consumer to know the reasons for the digital content or digital service not being in conformity with the contract . therefore , in case of a dispute , it should be for the supplier to prove that the digital content is in conformity with the contract , unless the supplier proves that the consumer ' s digital environment is not compatible with the digital content . only where the supplier proves that the consumer ' s digital environment is not compatible with the interoperability and other technical requirements , it should be for the consumer to prove that the digital content is not in conformity with the contract .


### the protection of individuals with regard to the processing of personal data is governed by directive 95 / 46 / ec of the european parliament and of the council1 and by directive 2002 / 58 / ec of the european parliament and of the council2 which are fully applicable in the context of contracts for the supply of digital content . those directives already establish a legal framework in the field of personal data in the union . the implementation and application of this directive should be made in full compliance with that legal framework . __________ oj l 281 , 23 / 11 / 1995 , p . 31 - 50 ) [ to be replaced by the general data protection regulation , once adopted ] . 2 . oj l 201 , 31 . 7 . 2002 , p . 37–47 . ### the pursuit of activities falling within the scope of this directive involves the processing of personal data . this directive is without prejudice to the rules of union law applicable to the processing of personal data within the union , in particular regulation 2016 / 679 and directive 2002 / 58 / ec of the european parliament and of the council2 , which govern the processing of personal data carried out in the member states under the supervision of the member states ' competent authorities , in particular the public independent authorities designated by the member states . those legal acts already establish a legal framework in the field of personal data in the union and are fully applicable in the context of contracts for the supply of digital content . the implementation and application of this directive should be made in full compliance with that legal framework . __________ 2 . oj l 201 , 31 . 7 . 2002 , p . 37–47 .


### a failure of the supplier to supply the digital content to the consumer in accordance with the contract is a serious breach of the main contractual obligation of the supplier , which should allow the consumer to immediately terminate the contract . where the supplier has initially not failed to supply the digital content , interruptions of the supply making the digital content not available or accessible to the consumer over a short period of time should be treated as non - conformity with the contract , and not a failure to supply . in particular , the requirement of proper continuity of the digital content should also cover more than negligible short term interruptions of the supply . ### where the supplier fails to supply the digital content or digital services to the consumer in accordance with the contract the consumer should call upon the supplier to make the supply within an additional and appropriate period of time . any failure to supply within this additional period of time should allow the consumer to terminate the contract . where the supplier has initially not failed to supply the digital content or digital services , interruptions of the supply making the digital content or digital services not available or accessible to the consumer over a short period of time should be treated as non - conformity with the contract , and not a failure to supply . in particular , the requirement of proper continuity of the digital content should also cover more than negligible short term interruptions of the supply which are significant , continuous and recurring .


### the supplier shall bring the digital content in conformity with the contract pursuant to paragraph 1 within a reasonable time from the time the supplier has been informed by the consumer about the lack of conformity with the contract and without any significant inconvenience to the consumer , taking account of the nature of digital content and the purpose for which the consumer required this digital content . ### the supplier shall bring the digital content or digital service in conformity with the contract pursuant to paragraph 1 without undue delay from the time the supplier has been informed by the consumer about the lack of conformity with the contract and without any significant inconvenience to the consumer , taking account of the nature of the digital content or digital service and the purpose for which the consumer required this digital content or digital service .


### any lack of conformity which exists at the time the digital content is supplied ; and ### any lack of conformity with the contract which exists at the time the digital content or digital service is supplied ; or where the contract provides that the digital content or digital service shall be supplied over a period of time , any lack of conformity which occurs during the duration of that period .


### the directive should address problems across different categories of digital content and its supply . in order to cater for fast technological developments and to maintain the future - proof nature of the notion of digital content , this notion as used in this directive should be broader than in directive 2011 / 83 / eu of the european parliament and of the council . 30 in particular it should cover services which allow the creation , processing or storage of data . while there are numerous ways for digital content to be supplied , such as transmission on a durable medium , downloading by consumers on their devices , web - streaming , allowing access to storage capabilities of digital content or access to the use of social media , this directive should apply to all digital content independently of the medium used for its transmission . differentiating between different categories in this technologically fast changing market is not desirable because it would hardly be possible to avoid discriminations between suppliers . a level - playing field between suppliers of different categories of digital content should be ensured . however this directive should not apply to digital content which is embedded in goods in such a way that it operates as an integral part of the goods and its functions are subordinate to the main functionalities of the goods . _________________ 30 oj l 304 , 22 . 11 . 2011 , p . 64 . ### the directive should address problems across different categories of digital content and digital services and their supply . while there are numerous ways for digital content or digital services to be supplied , such as transmission on a durable medium , downloading by consumers on their devices , web - streaming , allowing access to storage capabilities of digital content or access to the use of social media , this directive should apply to all digital content independently of the medium used for its transmission . differentiating between different categories in this technologically fast changing market is not desirable because it would hardly be possible to avoid discriminations between suppliers . a level - playing field between suppliers of different categories of digital content should be ensured .


### bringing the digital content into conformity with the contract shall be deemed to be disproportionate where the costs it imposes on the supplier are unreasonable . the following shall be taken into account when deciding whether the costs are unreasonable : ### bringing the digital content or digital service into conformity with the contract shall be deemed to be disproportionate where the costs it imposes on the supplier are unreasonable . the following shall be taken into account when deciding whether the costs are unreasonable :


### the consumer may terminate the contract only if the lack of conformity with the contract impairs functionality , interoperability and other main performance features of the digital content such as its accessibility , continuity and security where required by article 6 paragraphs and . the burden of proof that the lack of conformity with the contract does not impair functionality , interoperability and other main performance features of the digital content shall be on the supplier . ### without prejudice to other legal grounds for terminating the contract , the consumer may terminate the contract if the lack of conformity with the contract impairs functionality , interoperability and other main performance features of the digital content such as its accessibility , continuity and security where required by article 6 and . the burden of proof that the lack of conformity with the contract does not impair functionality , interoperability and other main performance features of the digital content shall be on the supplier .


### this directive should fully harmonise a set of key rules that are so far not regulated at union level . it should include therefore rules on conformity of the digital content , remedies available to consumers in cases of lack of conformity of digital content with the contract and certain modalities for the exercise of those remedies . this directive should also harmonise certain aspects concerning the right to terminate a long term contract , as well as certain aspects concerning the modification of the digital content . ### this directive should harmonise a set of key rules that are so far not regulated at union level . it should include therefore rules on conformity of the digital content , remedies available to consumers in cases of lack of conformity of digital content with the contract and certain modalities for the exercise of those remedies . this directive should also harmonise certain aspects concerning the right to terminate a long term contract , specific types of unfair contract terms relating to digital content and digital services as well as certain aspects concerning the modification of the digital content .


### in cases where the contract does not stipulate sufficiently clear and comprehensive benchmarks to ascertain the conformity of the digital content with the contract , it is necessary to set objective conformity criteria to ensure that consumers are not deprived of their rights . in such cases the conformity with the contract should be assessed considering the purpose for which digital content of the same description would normally be used . ### the contract should stipulate sufficiently clear and comprehensive benchmarks to ascertain the conformity of the digital content and digital services with the contract . it is also necessary to set objective conformity criteria to ensure that consumers are not deprived of their rights . in such cases the conformity with the contract should be assessed considering the purpose for which digital content or digital services of the same description would normally be used .


### in the case of a lack of conformity with the contract , the consumer shall be entitled to have the digital content brought into conformity with the contract free of charge , unless this is impossible , disproportionate or unlawful . ### in the case of a lack of conformity with the contract , the consumer shall be entitled to have the digital content or digital facility brought into conformity with the contract free of charge , unless this is factually or legally impossible , or would impose costs on the supplier that would be disproportionate .


### in order to meet the expectations of consumers and ensure a clear - cut and simple legal framework for suppliers of digital content offered on a durable medium , in relation to conformity requirements and remedies available to consumers for non - conformity , this directive should apply to goods such as dvds and cds , incorporating digital content in such a way that the goods function only as a carrier of the digital content . the directive should apply to the digital content supplied on a durable medium , independently whether it is sold at a distance or in face - to - face situations , so as to avoid fragmentation between the different distribution channels . the directive 2011 / 83 should continue to apply to those goods , including to obligations related to the delivery of goods , remedies in case of the failure to deliver and the nature of the contract under which those goods are supplied . the directive is also without prejudice to the distribution right applicable to these goods under copyright law . ### in order to meet the expectations of consumers and ensure a clear and unambiguous legal framework for suppliers of digital content or service offered on a physical medium , in relation to conformity requirements and remedies available to consumers for non - conformity , this directive should also apply to material goods incorporating digital content in such a way that it constitutes an integral part of the material good and cannot easily be uninstalled unless the supplier proves that the defect lies in the hardware of the good in question . this scope is justified by the increasing complexity of goods incorporating digital content . this directive should also apply to the digital content supplied on a physical medium , independently of whether it is sold at a distance or in face - to - face situations , so as to avoid fragmentation between the different distribution channels . the directive 2011 / 83 should continue to apply to those goods , including to obligations related to the delivery of goods , remedies in case of the failure to deliver and the nature of the contract under which those goods are supplied . the directive is also without prejudice to the distribution right applicable to these goods under copyright law .


### the directive should address problems across different categories of digital content and its supply . in order to cater for fast technological developments and to maintain the future - proof nature of the notion of digital content , this notion as used in this directive should be broader than in directive 2011 / 83 / eu of the european parliament and of the council . 30 in particular it should cover services which allow the creation , processing or storage of data . while there are numerous ways for digital content to be supplied , such as transmission on a durable medium , downloading by consumers on their devices , web - streaming , allowing access to storage capabilities of digital content or access to the use of social media , this directive should apply to all digital content independently of the medium used for its transmission . differentiating between different categories in this technologically fast changing market is not desirable because it would hardly be possible to avoid discriminations between suppliers . a level - playing field between suppliers of different categories of digital content should be ensured . however this directive should not apply to digital content which is embedded in goods in such a way that it operates as an integral part of the goods and its functions are subordinate to the main functionalities of the goods . _________________ 30 oj l 304 , 22 . 11 . 2011 , p . 64 . ### the directive should address problems across different categories of digital content or digital services and their supply . in order to ensure consistency with the acquis and cater for fast technological developments and to maintain the future - proof nature of the notion of digital content , the notion as used in this directive should correspond to the one used in directive 2011 / 83 / eu of the european parliament and of the council30 . this notion should cover , for example , video and audio content , applications , digital games and any other software . in order to cater for rapid technological developments and to ensure this directive remains abreast of the times , it should also cover services which allow the creation , processing or storage of data , such as cloud storage services or file hosting services . the notion of digital services should also cover social media platforms , instant messaging services , and video or audio - sharing websites or platforms which fall outside the scope of electronic communication services . while there are numerous ways for digital content or digital services to be supplied , such as transmission on a durable medium , downloading by consumers on their devices , web - streaming , allowing access to storage capabilities of digital content or access to the use of social media , this directive should apply to all digital content and digital services independently of the medium used for their transmission . differentiating between different categories in this technologically fast changing market is not desirable because it would hardly be possible to avoid discriminations between suppliers . a level playing - field between suppliers of different categories of digital content and digital services should be ensured . however this directive should not apply to digital content which is embedded in goods in such a way that it operates as an integral part of the goods and its functions are subordinate to the main functionalities of the goods . _________________ 30 oj l 304 , 22 . 11 . 2011 , p . 64 .


### the member states shall lay down detailed rules for the exercise of the right to damages . ### the member states shall lay down detailed rules for the exercise of the right to damages . when laying down those rules , member states may provide for a reduced or increased degree of liability for damages based on objecitve criteria for assessing the efforts made by the supplier to avoid non - conformity of the digital content and the occurrence of the damage , such as best practices in relation to security or state - of - the - art technology .


### the supplier shall bring the digital content in conformity with the contract pursuant to paragraph 1 within a reasonable time from the time the supplier has been informed by the consumer about the lack of conformity with the contract and without any significant inconvenience to the consumer , taking account of the nature of digital content and the purpose for which the consumer required this digital content . ### the supplier shall bring the digital content or digital service in conformity with the contract pursuant to paragraph 1 within a reasonable time from the time the supplier has been informed by the consumer about the lack of conformity with the contract and without any significant inconvenience to the consumer , taking account of the nature of digital content or digital service and the purpose for which the consumer required this digital content or digital service .


### in the case of a lack of conformity with the contract , the consumer shall be entitled to have the digital content brought into conformity with the contract free of charge , unless this is impossible , disproportionate or unlawful . ### in case of a lack of conformity with the contract , the consumer shall be entitled to have the digital content or digital service brought into conformity with the contract free of charge , unless this is factually or legally impossible , disproportionate or unlawful .


### in order to meet the expectations of consumers and ensure a clear - cut and simple legal framework for suppliers of digital content offered on a durable medium , in relation to conformity requirements and remedies available to consumers for non - conformity , this directive should apply to goods such as dvds and cds , incorporating digital content in such a way that the goods function only as a carrier of the digital content . the directive should apply to the digital content supplied on a durable medium , independently whether it is sold at a distance or in face - to - face situations , so as to avoid fragmentation between the different distribution channels . the directive 2011 / 83 should continue to apply to those goods , including to obligations related to the delivery of goods , remedies in case of the failure to deliver and the nature of the contract under which those goods are supplied . the directive is also without prejudice to the distribution right applicable to these goods under copyright law . ### in order to meet the expectations of consumers and ensure a clear - cut and simple legal framework for suppliers of digital content offered on a tangible medium , in relation to conformity requirements and remedies available to consumers for non - conformity , this directive should apply to digital content integrated in goods such as household appliances , toys and storage devices where that digital content is embedded in such a way that it operates as an integral part of the goods and cannot easily be un - installed by the consumer , unless the seller proves that the lack of conformity lies in the hardware of the good . to the same avail , this directive should also apply to goods such as dvds and cds , incorporating digital content in such a way that the goods function only as a carrier of the digital content , unless the seller proves that the lack of conformity lies in the hardware of the good . directive 2011 / 83 should continue to apply to those goods , including the obligations related to the delivery of goods , remedies in case of the failure to deliver and the nature of the contract under which those goods are supplied . this directive is also without prejudice to the distribution right applicable to those goods under copyright law .


### the directive should address problems across different categories of digital content and its supply . in order to cater for fast technological developments and to maintain the future - proof nature of the notion of digital content , this notion as used in this directive should be broader than in directive 2011 / 83 / eu of the european parliament and of the council . 30 in particular it should cover services which allow the creation , processing or storage of data . while there are numerous ways for digital content to be supplied , such as transmission on a durable medium , downloading by consumers on their devices , web - streaming , allowing access to storage capabilities of digital content or access to the use of social media , this directive should apply to all digital content independently of the medium used for its transmission . differentiating between different categories in this technologically fast changing market is not desirable because it would hardly be possible to avoid discriminations between suppliers . a level - playing field between suppliers of different categories of digital content should be ensured . however this directive should not apply to digital content which is embedded in goods in such a way that it operates as an integral part of the goods and its functions are subordinate to the main functionalities of the goods . _________________ 30 oj l 304 , 22 . 11 . 2011 , p . 64 . ### the directive should address problems across different categories of digital content or digital services and their supply . in order to ensure consistency with the acquis the notion of digital content should correspond with the one used in directive 2011 / 83 / eu of the european parliament and of the council and should cover for example video , audio , applications , digital games and any other software . 30 in order to cater for fast technological developments and to ensure this directive is future - proof , this directive should also cover digital services which allow the creation , processing or storage of data , for example cloud storage or file hosting services . it should also cover digital services allowing sharing and other interaction , for example social media , video or audio sharing websites or platforms . while there are numerous ways for digital content or digital services to be supplied , such as transmission on a tangible medium , downloading by consumers on their devices , web - streaming , allowing access to storage capabilities of digital services or access to the use of social media , this directive should apply to all digital content or digital services independently of the medium used for its transmission . differentiating between different categories in this technologically fast changing market is not desirable because it would hardly be possible to avoid discriminations between suppliers . a level - playing field between suppliers of different categories of digital content or digital services should be ensured . this directive should also apply to digital content which is embedded in goods , including dvds and cds , unless the supplier proves that the defect lies in the hardware of the good . _________________ 30 oj l 304 , 22 . 11 . 2011 , p . 64 .


### where the digital content has been supplied in exchange for a payment of a price and over the period of time stipulated in the contract , the consumer may terminate the contract only in relation to that part of the period of time where the digital content has not been in conformity with the contract . ### where the digital content has been supplied in exchange for a payment of a price and over the period of time stipulated in the contract , the consumer shall be entitled to terminate the contract only from the date on which the digital content or digital service ceased to be in conformity with the contract , unless the lack of conformity with the contract is such as to justify termination of the contract as a whole .


### where the digital content is supplied in exchange for a payment of a price , the consumer remains liable to pay the part of the price for the digital content supplied corresponding to the period of time before the termination becomes effective . ### where the digital content is supplied in exchange for a payment of a price , the consumer remains liable to pay the part of the price for the digital content or digital service supplied corresponding to the period of time before the termination becomes effective .


### where the digital content is supplied in exchange for a payment of a price , the consumer remains liable to pay the part of the price for the digital content supplied corresponding to the period of time before the termination becomes effective . ### where the digital content or digital service is supplied in exchange for a payment of a price , the consumer remains liable to pay the part of the price for the digital content or digital service supplied corresponding to the period of time before the contract ended effectively .


### where the contract provides for the supply of the digital content for an indeterminate period or where the initial contract duration or any combination of renewal periods exceed 12 months , the consumer shall be entitled to terminate the contract any time after the expiration of the first 12 months period . ### where the contract provides for the supply of the digital content or a digital service for a fixed period longer than 6 months or where any combination of subsequent contracts or renewal periods exceed 6 months from the moment of conclusion of the initial contract , the consumer shall be entitled to end the contract any time after the expiration of the first 6 months period .


### where the contract provides for the supply of the digital content for an indeterminate period or where the initial contract duration or any combination of renewal periods exceed 12 months , the consumer shall be entitled to terminate the contract any time after the expiration of the first 12 months period . ### where the contract provides for the supply of the digital content or digital service for a fixed duration longer than 12 months or where any combination of subsequent contracts or renewal periods exceeds 12 months from the conclusion of the initial contract , the consumer shall be entitled to terminate the contract any time after the expiration of the first 12 months period .


### the commission shall , not later than on [ the date of five years after entry into force ] review the application of this directive and submit a report to the european parliament and the council . the report shall examine , inter alia , the case for harmonisation of rules applicable to contracts for the supply of digital content against counter - performance other than that covered by this directive , in particular supplied against advertisement or indirect collection of data . ### the commission shall , not later than on [ the date of three years after entry into force ] review the application of this directive and submit a report to the european parliament and the council . the report shall examine , inter alia , the interaction and compliance with regulation 2016 / 679 , and the case for harmonisation of rules applicable to contracts for the supply of digital content against counter - performance other than that covered by this directive , in particular supplied against advertisement or indirect collection of data .


### the consumer shall cooperate with the supplier to the extent possible and necessary to determine the consumer ' s digital environment . the obligation to cooperate shall be limited to the technically available means which are the least intrusive for the consumer . where the consumer fails to cooperate , the burden of proof with respect to the non - conformity with the contract shall be on the consumer . ### the consumer shall cooperate with the supplier to the extent possible and necessary to ascertain the consumer ' s digital environment in order to be able to establish whether the lack of conformity existed at the time of supply . the obligation to cooperate shall be limited to the technically available means which are the least intrusive for the consumer . only in exceptional and duly justified circumstances where there are no other means available the consumer shall grant the supplier upon request virtual access to the consumer ' s digital environment . where the consumer fails to cooperate , the burden of proof with respect to the non - conformity with the contract shall be on the consumer .


### differences in national mandatory consumer contract law rules and a lack of clear contract law rules are among the key obstacles which hinder the development of the supply of digital content , as very few tailor - made rules exist at union level . businesses face additional costs stemming from differences in national mandatory consumer contract law rules and legal uncertainty when selling digital content across borders . businesses also face costs when adapting their contracts to specific mandatory rules for the supply of digital content are already emerging in several member states , creating differences in scope and content between specific national rules governing these contracts . in those member states where there are not yet specific rules for the supply of digital content , traders willing to sell cross - border face uncertainty , as they will often not know which rules apply to digital content in the member state they want to export to , nor the content of those rules and whether they are mandatory . ### differences in national mandatory consumer contract law rules are an essential pre - condition for a learning process within the european union , whereas a maximum harmonisation approach would bear the risk of making contractual law non - responsive to swift technological or behavioural developments and changes . this is because maximum harmonisation would prevent member states from adopting more stringent rules in their national laws and thus prevent them from quickly and adequately responding to new business practices detrimental to consumers . suppliers willing to supply digital content and digital services cross - border would benefit highly from the european union ' s harmonisation efforts , despite a minimum harmonisation approach , as only very few member states possess specific rules on the supply of digital content and digital services . this gives the union the opportunity to harmonise this area of law and set common standards , while acknowledging that member states may want to maintain certain national provisions . business - to - business transactions are regulated differently in each member state and should remain outside the scope of this directive ;


### remedies for the lack of conformity with the contract ### having the digital content or digital service brought into conformity with the contract


### the growth potential of e - commerce has not yet been fully exploited . the digital single market strategy for europe29 tackles in a holistic manner the major obstacles to the development of cross - border e - commerce in the union in order to unleash this potential . ensuring better access for consumers to digital content and facilitating businesses to supply digital content is necessary to boost the union ' s digital economy and stimulate overall growth . _________________ 29 com 192 final . ### the growth potential of e - commerce has not yet been fully exploited . this directive tackles major obstacles to the development of cross - border e - commerce in the union in order to unleash&#160 ; its full&#160 ; potential . ensuring better access for consumers to digital content or digital services , providing remedies for consumers in case of lack of conformity or a failure to supply the digital content or digital services and facilitating businesses to supply digital content and digital services is necessary to boost the union ' s digital economy , stimulate overall growth and increase consumer trust in&#160 ; the digital single market .


### the commission shall , not later than on [ the date of five years after entry into force ] review the application of this directive and submit a report to the european parliament and the council . the report shall examine , inter alia , the case for harmonisation of rules applicable to contracts for the supply of digital content against counter - performance other than that covered by this directive , in particular supplied against advertisement or indirect collection of data . ### the commission shall , not later than on [ the date of five years after entry into force ] review the application of this directive and submit a report to the european parliament and the council .


### where the contract provides that the digital content shall be supplied over the period of time stipulated in the contract , the supplier may alter functionality , interoperability and other main performance features of the digital content such as its accessibility , continuity and security , to the extent those alternations adversely affect access to or use of the digital content by the consumer , only if : ### where the contract provides that the digital content or digital service shall be supplied over the period of time stipulated in the contract , the supplier may alter the functionality , interoperability and other main performance features of the digital content or digital service , to the extent those alternations adversely affect access to or use of the digital content or digital service by the consumer , only if : the contract allows for and gives a valid reason for such an alteration ; such an alteration can reasonably be expected by the consumer ; the consumer is notified reasonably in advance of the modification and the corresponding right to terminate in a clear and comprehensive manner notice on a durable medium ; and the consumer is allowed to terminate the contract free of any charges within no less than 30 days from day of the receipt of the notice or from the time the digital content is altered by the supplier , whichever is later ;


### the directive should address problems across different categories of digital content and its supply . in order to cater for fast technological developments and to maintain the future - proof nature of the notion of digital content , this notion as used in this directive should be broader than in directive 2011 / 83 / eu of the european parliament and of the council . 30 in particular it should cover services which allow the creation , processing or storage of data . while there are numerous ways for digital content to be supplied , such as transmission on a durable medium , downloading by consumers on their devices , web - streaming , allowing access to storage capabilities of digital content or access to the use of social media , this directive should apply to all digital content independently of the medium used for its transmission . differentiating between different categories in this technologically fast changing market is not desirable because it would hardly be possible to avoid discriminations between suppliers . a level - playing field between suppliers of different categories of digital content should be ensured . however this directive should not apply to digital content which is embedded in goods in such a way that it operates as an integral part of the goods and its functions are subordinate to the main functionalities of the goods . _________________ 30 oj l 304 , 22 . 11 . 2011 , p . 64 . ### the directive should address problems across different categories of digital content or service and their supply . in order to ensure legal consistency , the notion of digital content should correspond with that used in directive 2011 / 83 / eu of the european parliament and of the council and should cover , for example , video , audio , applications , digital games and any other software . in order to cater for current and future technological developments , this directive should also cover digital services which allow the creation , processing or storage of data , for example cloud storage or file hosting services . it should likewise cover digital services allowing sharing and other interaction , for example social media , instant messaging services , video or audio - sharing websites or platforms , provided they fall outside the scope of electronic communication services within the meaning of directive 2002 / 21 / ec . while there are numerous ways for digital content or digital services to be supplied , such as downloading by consumers on their devices , web - streaming , allowing access to storage capabilities of digital services or access to the use of social media , this directive should apply to all digital content or digital services independently of the medium used for their transmission . differentiating between different categories in this technologically fast changing market is not desirable because it would hardly be possible to avoid discriminations between suppliers . a level - playing field between suppliers of different categories of digital content or service should be ensured .


### in cases where the contract does not stipulate sufficiently clear and comprehensive benchmarks to ascertain the conformity of the digital content with the contract , it is necessary to set objective conformity criteria to ensure that consumers are not deprived of their rights . in such cases the conformity with the contract should be assessed considering the purpose for which digital content of the same description would normally be used . ### the contract should stipulate sufficiently clear and comprehensive benchmarks to ascertain the conformity of the digital content and digital services with the contract . it is also necessary to set objective conformity criteria to ensure that consumers are not deprived of their rights . in such cases the conformity with the contract should be assessed considering the purpose for which digital content or digital services of the same description would normally be used .


### a failure of the supplier to supply the digital content to the consumer in accordance with the contract is a serious breach of the main contractual obligation of the supplier , which should allow the consumer to immediately terminate the contract . where the supplier has initially not failed to supply the digital content , interruptions of the supply making the digital content not available or accessible to the consumer over a short period of time should be treated as non - conformity with the contract , and not a failure to supply . in particular , the requirement of proper continuity of the digital content should also cover more than negligible short term interruptions of the supply . ### where the supplier fails to supply the digital content or digital services to the consumer in accordance with the contract the consumer should call upon the supplier to make the supply within an additional and appropriate period of time . any failure to supply within this additional period of time should allow the consumer to terminate the contract . where the supplier has initially not failed to supply the digital content or digital services , interruptions of the supply making the digital content or digital services not available or accessible to the consumer over a short period of time should be treated as non - conformity with the contract , and not a failure to supply . in particular , the requirement of proper continuity of the digital content should also cover more than negligible short term interruptions of the supply which are significant , continuous and recurring .


### in order to meet the expectations of consumers and ensure a clear - cut and simple legal framework for suppliers of digital content offered on a durable medium , in relation to conformity requirements and remedies available to consumers for non - conformity , this directive should apply to goods such as dvds and cds , incorporating digital content in such a way that the goods function only as a carrier of the digital content . the directive should apply to the digital content supplied on a durable medium , independently whether it is sold at a distance or in face - to - face situations , so as to avoid fragmentation between the different distribution channels . the directive 2011 / 83 should continue to apply to those goods , including to obligations related to the delivery of goods , remedies in case of the failure to deliver and the nature of the contract under which those goods are supplied . the directive is also without prejudice to the distribution right applicable to these goods under copyright law . ### the directive should apply to the digital content supplied on a tangible medium , independently whether it is supplied at a distance or in face - to - face situations , so as to avoid fragmentation between the different distribution channels . the directive 2011 / 83 should continue to apply to those goods , including the obligations related to the delivery of goods , remedies in case of the failure to deliver and the nature of the contract under which those goods are supplied . the directive is also without prejudice to the distribution right applicable to these goods under copyright law .


### where the supplier is liable to the consumer because of any failure to supply the digital content or a lack of conformity with the contract resulting from an act or omission by a person in earlier links of the chain of transactions , the supplier shall be entitled to pursue remedies against the person or persons liable in the chain of transactions . the person against whom the supplier may pursue remedies and the relevant actions and conditions of exercise , shall be determined by national law . ### where the supplier is liable to the consumer because of any failure to supply the digital content or digital service or a lack of conformity with the contract resulting from an act or omission by a person in earlier links of the chain of transactions , the supplier shall be entitled to pursue remedies against the person or persons liable in the chain of transactions or a third party who has granted an end - use license to the consumer . the person against whom the supplier may pursue remedies and the relevant actions and conditions of exercise , shall be determined by national law .


### the supplier shall bring the digital content in conformity with the contract pursuant to paragraph 1 within a reasonable time from the time the supplier has been informed by the consumer about the lack of conformity with the contract and without any significant inconvenience to the consumer , taking account of the nature of digital content and the purpose for which the consumer required this digital content . ### the supplier shall bring the digital content into conformity with the contract pursuant to paragraph 1 without undue delay from the time the supplier has been informed by the consumer about the lack of conformity with the contract and without any significant inconvenience to the consumer , taking account of the nature of digital content and the purpose for which the consumer required that digital content .


### a failure of the supplier to supply the digital content to the consumer in accordance with the contract is a serious breach of the main contractual obligation of the supplier , which should allow the consumer to immediately terminate the contract . where the supplier has initially not failed to supply the digital content , interruptions of the supply making the digital content not available or accessible to the consumer over a short period of time should be treated as non - conformity with the contract , and not a failure to supply . in particular , the requirement of proper continuity of the digital content should also cover more than negligible short term interruptions of the supply . ### where the supplier fails to supply the digital content or a digital service to the consumer in accordance with the contract the consumer should call to make the supply within an additional and appropriate period of time . any failure to supply within this additional period of time should allow the consumer to immediately terminate the contract . where the supplier has initially not failed to supply the digital content or digital services , interruptions of the supply making the digital content or digital services not available or accessible to the consumer over a short period of time should be treated as non - conformity with the contract , and not a failure to supply . in particular , the requirement of proper continuity of the digital content should also cover more than negligible short term interruptions of the supply .


### financial services , prevention of money laundering and terrorist financing ; ### financial services , prevention of money laundering , tax evasion , tax avoidance and terrorist financing ;


### each time a new union act for which whistleblower protection is relevant and can contribute to more effective enforcement is adopted , consideration should be given to whether to amend the annex to the present directive in order to place it under its scope . ### each time a new union act for which whistleblower protection is relevant and can contribute to more effective enforcement is adopted , the annex to the present directive should be amended in order to place it under its scope .


### certain union acts , in particular in the area of financial services , such as regulation no 596 / 2014 on market abuse49 , and commission implementing directive 2015 / 2392 , adopted on the basis of that regulation50 , already contain detailed rules on whistleblower protection . such existing union legislation , including the list of part ii of the annex , should be complemented by the present directive , so that these instruments are fully aligned with its minimum standards whilst maintaining any specificities they provide for , tailored to the relevant sectors . this is of particular importance to ascertain which legal entities in the area of financial services , the prevention of money laundering and terrorist financing are currently obliged to establish internal reporting channels . _________________ 49 oj l 173 , p . 1 . 50 commission implementing directive 2015 / 2392 of 17 december 2015 on regulation no 596 / 2014 of the european parliament and of the council as regards reporting to competent authorities of actual or potential infringements of that regulation . ### certain union acts , in particular in the area of financial services , such as regulation no 596 / 2014 on market abuse49 , and commission implementing directive 2015 / 2392 , adopted on the basis of that regulation50 , already contain detailed rules on whistleblower protection . such existing union legislation , including the list of part ii of the annex , should be complemented by the present directive , so that these instruments are fully aligned with its minimum standards whilst maintaining any specificities they provide for , tailored to the relevant sectors . this is of particular importance to ascertain which legal entities in the area of financial services , the prevention of money laundering and terrorist financing are currently obliged to establish internal reporting channels . as these cases often involve highly complex international corporate and financial constructions , which are likely to be within the remit of differing jurisdictions , provisions for a unified point of contact for whistleblowers should be adopted . _________________ 49 oj l 173 , p . 1 . 50 commission implementing directive 2015 / 2392 of 17 december 2015 on regulation no 596 / 2014 of the european parliament and of the council as regards reporting to competent authorities of actual or potential infringements of that regulation .


### a reasonable timeframe , not exceeding three months or six months in duly justified cases , for giving feed - back to the reporting person about the follow - up of the report and the type and content of this feed - back ; ### a reasonable timeframe , not exceeding three months or six months in duly justified cases , for giving substantive feed - back to the reporting person about the follow - up of the report and the type and content of this feed - back , 4 weeks to provide initial feedback and 1 week to provide a confidential note of receipt .


### each member state shall ensure that a legal person held liable for offences pursuant to article 6 shall be punishable by effective , proportionate and dissuasive sanctions , which shall include criminal or non - criminal fines and may include other sanctions , such as : ### each member state shall ensure that a legal person held liable for offences pursuant to article 7 shall be punishable by effective , proportionate and dissuasive sanctions , which shall include criminal or non - criminal fines and may include other sanctions , such as :


### whether the criminal activity that generated the property was carried out in the territory of another member state or in that of a third country , when the relevant conduct is a criminal offence under the national law of the member state or the third country where the conduct was committed and would be a criminal offence under the national law of the member state implementing or applying this article had it been committed there ; ### it is not necessary to establish whether the criminal activity that generated the property was carried out in the territory of another member state or in that of a third country , when the relevant conduct is a criminal offence under the national law of the member state or the third country where the conduct was committed and would be a criminal offence under the national law of the member state implementing or applying this article had it been committed there ;


### the identity of the perpetrator of the criminal activity that generated the property or other circumstances relating to that criminal activity ; ### it is not necessary to establish the identity of the perpetrator of the criminal activity that generated the property or other circumstances relating to that criminal activity ;


### in order for an offence referred to in paragraph 1 to be punishable , it shall not be necessary to establish : ### for the purpose of implementing paragraph 1 , each member state shall ensure that :


### modernising public administrations and services through digital means is crucial to reducing administrative burden on industry and on citizens in general by making their interactions with public authorities faster , more convenient and less costly , as well as by increasing the efficiency and the quality of the services provided to citizens and businesses . since a number of services of public interest already have a union dimension , the support to their implementation and deployment at union level should ensure that citizens and businesses will benefit from the access to high quality digital services across europe . ### modernising public administrations and services through digital means is crucial to reducing administrative burden on industry , business and research as well as on citizens in general by making their interactions with public authorities including judiciaries faster , more convenient and less costly , as well as by increasing the efficiency and the quality of the services provided to citizens and businesses . since a number of services of public interest already have a union dimension , the support to their implementation and deployment at union level should ensure that citizens and businesses will benefit from the access to high quality digital services across europe .


### in its resolution of 1 june 2017 on digitising european industry64 the european parliament highlighted the importance of a common european cybersecurity approach , recognising the need to raise awareness and considered cyber - resilience as a crucial responsibility for business leaders and national and european industrial security policymakers . __________________ 64 document ref . a8 - 0183 / 2017 , available at : http : / / www . europarl . europa . eu / sides / getdoc . do ? type=ta&language=en&reference=p8 - ta - 2017 - 0240 ### in its resolution of 1 june 2017 on digitising european industry64 the european parliament highlighted , in the context of potential vulnerabilities as regards cyberattacks , sabotage , manipulation of data or industrial espionage , the importance of a common european cybersecurity approach , recognising the need to raise awareness on enhancing cybersecurity and considered cyber - resilience as a crucial responsibility for business leaders and national and european industrial security policymakers and the need to make cybersecurity requirements mandatory for public procurement with regard to it equipment and iot products . __________________ 64 document ref . a8 - 0183 / 2017 , available at : http : / / www . europarl . europa . eu / sides / getdoc . do ? type=ta&language=en&reference=p8 - ta - 2017 - 0240


### for the high performance computing specific objective a joint undertaking is deemed the most suited implementation mechanism , in particular to coordinate national and union strategies and investments in high performance computing infrastructure and research and development , pool resources from public and private funds , and safeguard the economic and strategic interests of the union63 . moreover , high performance computing competence centres in member states will provide high performance computing services to industry , academia and public administrations . __________________ 63 impact assessment accompanying the document ' proposal for a council regulation on establishing the eurohpc joint undertaking ' ### for the high performance computing specific objective the hpc joint undertaking is deemed the most suited implementation mechanism , in particular to coordinate national and union strategies and investments in high performance computing infrastructure and research and development , pool resources from public and private funds , and safeguard the economic and strategic interests of the union63 . the eurohpc ju will enable member states to coordinate together with the union their supercomputing strategies and investments . moreover , high performance computing competence centres in member states will provide high performance computing services to industry , academia and public administrations . the programme should therefore finance the eurohpc ju for the sole purpose of investing in high performance computing under the programme . __________________ 63 impact assessment accompanying the document ' proposal for a council regulation on establishing the eurohpc joint undertaking '


### the interim evaluation of the programme shall be performed once there is sufficient information available about the implementation of the programme , but no later than four years after the start of the implementation of the programme . ### the interim evaluation of the programme shall be performed once there is sufficient information available about the implementation of the programme , but no later than three years after the start of the implementation of the programme . the interim evaluation shall present the findings necessary to make a decision about a follow - up to the programme beyond 2027 and its objectives .


### in accordance with the financial regulation , regulation no 883 / 2013 of the european parliament and of the council48 , council regulation no 2988 / 9549 , council regulation no 2185 / 9650 and regulation 2017 / 193951 , the financial interests of the union are to be protected through proportionate measures , including the prevention , detection , correction and investigation of irregularities including fraud , the recovery of funds lost , wrongly paid or incorrectly used and , where appropriate , the imposition of administrative sanctions . in particular , in accordance with the provisions and procedures laid down in regulation no 883 / 2013 of the european parliament and of the council and regulation no 2185 / 96 , the european anti - fraud office may carry out administrative investigations , including on - the - spot checks and inspections , with a view to establishing whether there has been fraud , corruption or any other illegal activity affecting the financial interests of the union . in accordance with regulation 2017 / 1939 , the european public prosecutor ' s office may investigate and prosecute fraud and other criminal offences affecting the financial interests of the union , as provided for in directive 2017 / 1371 of the european parliament and of the council52 . in accordance with the financial regulation , any person or entity receiving union funds is to fully cooperate in the protection of the union’s financial interests , to grant the necessary rights and access to the commission , olaf , the eppo and the european court of auditors and to ensure that any third parties involved in the implementation of the union funds grant equivalent rights . __________________ 48 oj l 248 , 18 . 9 . 2013 , p . 1–22 . the regulation is available at : http : / / eur - lex . europa . eu / legal - content / en / txt / html / ? uri=celex : 32013r0883&rid=1 49 oj l 312 , 23 . 12 . 1995 , p . 1–4 . the regulation is available at http : / / eur - lex . europa . eu / legal - content / en / txt / html / ? uri=celex : 31995r2988&rid=1 50 oj l 292 , 15 . 11 . 1996 , p . 2–5 . the regulation is available at http : / / eur - lex . europa . eu / legal - content / en / txt / html / ? uri=celex : 31996r2185&rid=1 51 oj l 283 , 31 . 10 . 2017 , p . 1–71 . the regulation is available at http : / / eur - lex . europa . eu / legal - content / en / txt / html / ? uri=celex : 32017r1939&rid=1 52 directive 2017 / 1371 of the european parliament and of the council of 5 july 2017 on the fight against fraud to the union ' s financial interests by means of criminal law . ### in accordance with the financial regulation , regulation no 883 / 2013 of the european parliament and of the council48 , council regulation no 2988 / 9549 , council regulation no 2185 / 9650 and regulation 2017 / 193951 , the financial interests of the union are to be protected through proportionate measures , including the prevention , detection , correction and investigation of irregularities including fraud , the recovery of funds lost , wrongly paid or incorrectly used and , where appropriate , the imposition of administrative sanctions . in particular , in accordance with the provisions and procedures laid down in regulation no 883 / 2013 of the european parliament and of the council and regulation no 2185 / 96 , the european anti - fraud office may carry out administrative investigations , including on - the - spot checks and inspections , with a view to establishing whether there has been fraud , corruption or any other illegal activity affecting the financial interests of the union . in accordance with regulation 2017 / 1939 , the european public prosecutor ' s office is to investigate and prosecute fraud and other criminal offences affecting the financial interests of the union , as provided for in directive 2017 / 1371 of the european parliament and of the council52 . in accordance with the financial regulation , any person or entity receiving , managing or distributing union funds is to fully cooperate in the protection of the union’s financial interests , to grant the necessary rights and access to the commission , olaf , the eppo and the european court of auditors and to ensure that any third parties involved in the implementation of the union funds grant equivalent rights . __________________ 48 oj l 248 , 18 . 9 . 2013 , p . 1–22 . the regulation is available at : http : / / eur - lex . europa . eu / legal - content / en / txt / html / ? uri=celex : 32013r0883&rid=1 49 oj l 312 , 23 . 12 . 1995 , p . 1–4 . the regulation is available at http : / / eur - lex . europa . eu / legal - content / en / txt / html / ? uri=celex : 31995r2988&rid=1 50 oj l 292 , 15 . 11 . 1996 , p . 2–5 . the regulation is available at http : / / eur - lex . europa . eu / legal - content / en / txt / html / ? uri=celex : 31996r2185&rid=1 51 oj l 283 , 31 . 10 . 2017 , p . 1–71 . the regulation is available at http : / / eur - lex . europa . eu / legal - content / en / txt / html / ? uri=celex : 32017r1939&rid=1 52 directive 2017 / 1371 of the european parliament and of the council of 5 july 2017 on the fight against fraud to the union ' s financial interests by means of criminal law .


### in duly justified circumstances irrespective of a declaration of emergency , the competent authority may require gas undertakings to provide the information referred to in paragraph 1 or additional information necessary to assess the overall situation of the gas supply in the member state or other member states , including contractual information . the commission may request from the competent authorities the information provided by natural gas undertakings . ### irrespective of a declaration of emergency , the competent authority may require natural gas undertakings to provide the information referred to in paragraph 1 or additional information necessary to assess the overall situation of the gas supply in the member state or other member states , including contractual information . the commission may request from the competent authorities the information provided by natural gas undertakings .


### mandatory comprehensive templates including all the risks to be covered by the risk assessment and all the components of the preventive action plans and emergency plans are needed to facilitate the risk assessment and preparation of the plans , their peer review and their assessment by the commission . ### mandatory comprehensive templates including all the risks to be covered by the risk assessment and all the components of the preventive action plans and the emergency plans are needed to facilitate the risk assessment and preparation of the plans , their peer review and their assessment by the commission .


### the measures to ensure the security of supply contained in the preventive action plans and in the emergency plans shall be clearly defined , transparent , proportionate , non - discriminatory and verifiable , shall not unduly distort competition and the effective functioning of the internal market in gas and shall not endanger the security of gas supply of other member states or of the union as a whole . ### the measures to ensure the security of gas supply contained in the preventive action plans and in the emergency plans shall be clearly defined , transparent , proportionate , non - discriminatory and verifiable , shall not unduly distort competition and the effective functioning of the internal market in gas and shall not endanger the security of gas supply of other member states , regions or the union .


### to ensure maximum preparedness , so as to avoid a supply disruption and mitigate its effects should it nevertheless occur , the competent authorities of a given region must draw up preventive action plans and emergency , after consulting stakeholders . regional plans should take account of the specific characteristics of each member state . they should also clearly define the roles and responsibilities of the natural gas undertakings and the competent authorities . national measures to be designed should take fully account of the regional measures set out in the preventive action plan and emergency plan . they should be so designed as to address national risks in a way that takes full advantage of the opportunities provided by regional cooperation . the plans should be technical and operational in nature , their function being to help prevent the occurrence or escalation of an emergency and to mitigate its effects . the plans should take the security of electricity systems into account and be consistent with the energy union ' s strategic planning and reporting tools . ### to ensure maximum preparedness , so as to avoid a supply disruption and mitigate the effects of such a disruption should it nevertheless occur , the competent authorities of a given region should draw up preventive action plans and emergency plans , after consulting the stakeholders . regional plans should take account of the specific characteristics of each member state . they should also clearly define the roles and responsibilities of the natural gas undertakings and the competent authorities . national measures to be designed should take fully account of the regional measures set out in the preventive action plan and emergency plan . they should be designed so as to address national risks in a way that takes full advantage of the opportunities provided by regional cooperation . the plans should be technical and operational in nature , their function being to help prevent the occurrence or escalation of an emergency and to mitigate its effects . the plans should take the security of electricity systems into account and be consistent with the energy union ' s strategic planning and reporting tools .


### as demonstrated by the october 2014 stress test , solidarity is needed to ensure security of supply across the union and to keep overall costs to a minimum . if an emergency is declared in any member state , a two - step approach should be applied to strengthen solidarity . firstly , all member states which have introduced a higher supply standard should reduce it to default values to make the gas market more liquid . secondly , if the first step fails to provide the necessary supply , further measures by neighbouring member states , even if not in an emergency situation , should be triggered to ensure the supply to households , essential social services and district heating installations in the member state experiencing the emergency . member states should identify and describe the details of these solidarity measures in their emergency plans , ensuring fair and equitable compensation of the natural gas undertakings . ### as demonstrated by the october 2014 stress test , solidarity is needed to ensure security of supply across the union and to keep overall costs to a minimum . if an emergency is declared in any member state , a two - step approach should be applied to strengthen solidarity . all member states which have introduced a higher supply standard should reduce it to default values to make the gas market more liquid . if the first step fails to provide the necessary supply , further measures by neighbouring member states , even if not in an emergency situation , should be taken to ensure the supply to households , essential social services and district heating installations in the member state experiencing the emergency . member states should identify and describe the details of these solidarity measures in their emergency plans , ensuring fair and equitable compensation for the natural gas undertakings .


### by 1 november 2017 entso for gas shall carry out a union wide simulation of supply and infrastructure disruption scenarios . the scenarios shall be defined by entso for gas in consultation with the gas coordination group . the competent authorities shall provide entso for gas with the necessary data for the simulations such as peak demand values , production capacity and demand side measures . the competent authorities shall take into account the results of the simulations for the preparation of the risk assessments , preventive action plans and emergency plans . the union - wide simulation of supply and infrastructure disruption scenarios shall be updated every four years unless circumstances warrant more frequent updates . ### the competent authorities shall take into account the results of the union wide simulations carried out by entso for gas for the preparation of the risk assessments , preventive action plans and emergency plans .


### demand - side measures , such as fuel switching or reducing the gas supply to large industrial consumers in an economically efficient order , may have a valuable role to play in ensuring energy security , if they can be applied quickly and significantly reduce demand in response to a supply disruption . more should be done to promote efficient energy use , particularly where demand - side measures are needed . the environmental impact of any demand and supply - side measures proposed must be taken into account , with preference being given , as far as possible , to measures that have least impact on the environment . at the same time , security of supply and competitiveness aspects must be taken into account . ### demand - side measures , such as fuel switching or reducing the gas supply to large industrial consumers in an economically efficient manner , as well as a market - based system for industrial consumers , such as voluntary reduction of demand offered by industrial consumers against fair and timely financial compensation , may have a valuable role to play in ensuring energy security , if they can be applied quickly and significantly reduce demand in response to a supply disruption . more should be done to promote efficient energy use , particularly where demand - side measures are needed . the environmental impact of any demand and supply - side measures proposed must be taken into account , with preference being given , as far as possible , to measures that have least impact on the environment . at the same time , security of gas supply should remain a priority for measures undertaken in the case of disruption to supply , while competitiveness aspects should also be properly taken into account .


### the regions are to be defined , as far as possible , on the basis of existing regional cooperation structures set up by the member states and the commission , in particular the regional groups set up under regulation 347 / 2013 on guidelines for trans - european energy infrastructure17 . however , since this regulation and the ten - e regulation have different aims , the respective regional groups may differ in size and design . __________________ 17 regulation no 347 / 2013 of the european parliament and of the council of 17 april 2013 on guidelines for trans - european energy infrastructure and repealing decision no 1364 / 2006 / ec and amending regulation no 713 / 2009 , 714 / 2009 and no 715 / 2009 . ### the regions are to be defined , as far as possible , on the basis of existing regional cooperation structures set up by the member states and the commission , in particular the regional groups set up under regulation 347 / 2013 on guidelines for trans - european energy infrastructure17 . however , since this regulation and the ten - e regulation have different aims , the respective regional groups may differ in size and design , also depending on the entity and the nature of the supply disruption . __________________ 17 regulation no 347 / 2013 of the european parliament and of the council of 17 april 2013 on guidelines for trans - european energy infrastructure and repealing decision no 1364 / 2006 / ec and amending regulation no 713 / 2009 , 714 / 2009 and no 715 / 2009 .


### the commission communication ' framework strategy for a resilient energy union with a forward - looking climate change policy ' 14 from february 2015 , highlights the fact that the energy union rests on solidarity and trust , which are necessary features of energy security . this regulation should aim to boost solidarity and trust between the member states and should put in place the measures needed to achieve these aims , thus paving the way for implementing the energy union . __________________ 14 communication from the commission to the european parliament and the council , the european economic and social committee , the committee of the regions and the european investment bank , com 80 final . ### energy security constitutes one of the objectives of the energy union strategy , as set out in the commission communication of 25 february 2015 , entitled ' framework strategy for a resilient energy union with a forward - looking climate change policy ' . the communication highlighted the fact that the energy union rests on solidarity , a principle enshrined in article 194 teu , and trust , which are necessary features of energy security . this regulation is intended to boost solidarity and trust between the member states and put in place the measures needed to achieve these aims , thus paving the way for achieving a vital objective of the energy union .


### to the competent authority and to the commission immediately after their conclusion or modification the gas supply contracts with a duration of more than 1 year concluded or modified after [ op : please insert the date of entry in force of this regulation ] that individually or cumulatively with other contracts with the same supplier or its affiliates provide more than 40% of yearly natural gas consumption in the member state concerned . the notification obligation shall not apply to the modifications related only to the gas price . the notification obligation shall also apply to all commercial agreements relevant for the execution of the gas supply contract . ### to the competent authority and to the commission immediately after their conclusion or modification the gas supply contracts with the same supplier from a third country or from its affiliates , with a duration of more than 1 year concluded or modified after [ op : please insert the date of entry in force of this regulation ] that individually or cumulatively with contracts with the same supplier or its affiliates provide more than 40% of yearly natural gas consumption in the member state concerned . the notification obligation shall not apply to the gas price or other clauses not relevant for a comprehensive risk assessment of the security of supply . the notification obligation shall also apply to all commercial agreements relevant for the execution of the gas supply contract . to that end , the national regulatory authorities shall monitor the market supply structure and inform the relevant natural gas undertakings once the 40% threshold is exceeded


### an internal gas market that operates smoothly is the best guarantee of security of energy supply across the union and to reduce the exposure of individual member states to the harmful effects of supply disruptions . where a member state ' s security of supply is threatened , there is a risk that measures developed unilaterally by that member state may jeopardise the proper functioning of the internal gas market and damage the gas supply to customers in other member states . to allow the internal gas market to function even in the face of a shortage of supply , provision must be made for solidarity and coordination in the response to supply crises , as regards both preventive action and the reaction to actual disruptions of supply . ### a well - interconnected and well - functioning internal gas market , free of ' energy islands ' , is the best means by which to ensure security of gas supply across the union while reducing the exposure of individual member states to harmful effects of supply disruptions . where a member state ' s security of gas supply is threatened , there is a risk that measures developed unilaterally by that member state may damage gas supply to customers in other member states , negatively affecting the proper functioning of the internal gas market . to allow the internal gas market to function even in the face of a shortage of supply , provision must be made for solidarity and coordination at regional and union level as regards both preventive action and reaction to actual disruptions of supply .


### in march 2015 , the european council concluded that gas supply contracts with suppliers from third countries should be made more transparent and compatible with the union energy security provisions . in this context an efficient and targeted mechanism for member states ' access to key gas supply contracts should ensure a comprehensive assessment of relevant risks that can lead to a supply disruption or interfere with the necessary mitigating measures should a crisis nevertheless occur . under that mechanism certain key gas supply contracts should be automatically notified , immediately after their conclusion , to the member states . however , any obligation to notify a contract automatically needs to be proportionate . applying this obligation to contracts between a supplier and a buyer covering 40% of the national market strikes the right balance in terms of administrative efficiency and lays down clear obligations for market participants . this does not mean that other gas supply contracts are not relevant to security of supply . accordingly , member states should have the right to request other contracts which might negatively affect security of supply of a member state or region or of the union as a whole . the commission should have the same access to the gas supply contracts as member states , given its role in assessing the consistency and effectiveness of the preventive action plans and emergency plans to address risks to security of supply at national , regional and eu level . the commission may call on the member states to amend the plans so as to take account of the information obtained from the contracts . the confidentiality of commercially sensitive information should be ensured . improved commission access to information on commercial contracts should not affect the commission ' s ongoing efforts to monitor the gas market , and the commission should intervene if violations of the union law are identified . the provisions of this regulation should be without prejudice to the right of the commission to launch infringement proceedings in accordance with article 258 of the treaty on the functioning of the european union and to enforce competition rules , including state aid . ### completing the internal energy market will create a level playing field , ensuring that all energy supply contracts throughout the union are based on market prices and competition rules . in march 2015 , the european council concluded that gas supply contracts with suppliers from third countries should be made more transparent and compatible with the union energy security provisions . in this context an efficient and targeted mechanism for member states ' access to key gas supply contracts should ensure a comprehensive assessment of relevant risks that can lead to a supply disruption or interfere with the necessary mitigating measures should a crisis nevertheless occur . under that mechanism certain key gas supply contracts should be automatically notified , immediately after their conclusion , to the member states . however , any obligation to notify a contract automatically needs to be proportionate . applying this obligation to contracts between a supplier or its affiliates and a buyer or its affiliates that jointly cover at least 40 % of imports from third countries to the member state strikes the right balance in terms of administrative efficiency and lays down clear obligations for market participants . this does not automatically imply that other gas supply contracts are not relevant to security of supply . accordingly , member states should have the right to request other contracts which might negatively affect security of supply of a member state or a region or the union . the commission should have the same access to the gas supply contracts as member states , given its role in assessing the consistency and effectiveness of the preventive action plans and the emergency plans to address risks to security of supply at national , regional and union level . the commission should be able to request member states to amend the plans so as to take account of the information obtained from the contracts . the confidentiality of commercially sensitive information should be ensured . increased commission access to information on commercial contracts should not affect the commission ' s ongoing efforts to monitor the gas market , and the commission should intervene if violations of the union law are identified . the provisions of this regulation should be without prejudice to the right of the commission to launch infringement proceedings in accordance with article 258 of the treaty on the functioning of the european union and to enforce competition rules , including with regard to state aid .


### the measures , volumes and capacities needed to fulfil the infrastructure and supply standards in each member state of the region , as laid down in articles 4 and 5 , including where applicable , the extent to which demand - side measures can sufficiently compensate , in a timely manner , for a supply disruption as referred to in article 4 , the identification of the single largest gas infrastructure of common interest in the case of application of article 4 , the necessary gas volumes per category of protected customers and per scenario as referred to in article 5 and any increased supply standard under article 5 , including a justification of the compliance with the conditions set in article 5 and a description of a mechanism to temporarily reduce any increased supply standard or additional obligation in accordance with article 12 ; ### the measures , volumes and capacities needed to fulfil the infrastructure and supply standards in each member state of the region , as laid down in articles 4 and 5 , including where applicable , the extent to which demand - side measures can sufficiently compensate , in a timely manner , for a supply disruption as referred to in article 4 , the identification of the single largest gas infrastructure of common interest in the case of application of article 4 , the identification of the single largest gas supplier , the necessary gas volumes per category of protected customers and per scenario as referred to in article 5 and any increased supply standard under article 5 , including reasons for the compliance with the conditions set in article 5 and a description of a mechanism to temporarily reduce any increased supply standard or additional obligation in accordance with article 12 ;


### when conducting a comprehensive risk assessment to be prepared at regional level , competent authorities should assess natural , technological , commercial , financial , social , political and market - related risks , and any other relevant ones , including , where appropriate , the disruption of the supplies from the single largest supplier . all risks should be addressed by effective , proportionate and non - discriminatory measures to be developed in the preventive action plan and the emergency plan . the results of the risk assessments should also contribute to the all hazard risk assessments foreseen under article 6 of decision no 1313 / 2013 / eu18 . __________________ 18 decision no 1313 / 2013 / eu of the european parliament and of the council of 17 december 2013 on a union civil protection mechanism . ### when conducting a comprehensive risk assessment to be prepared at regional level , competent authorities should assess natural , technological , infrastructural , commercial , financial , social , political , market - related , and any other relevant risks , including , where appropriate , disruption of supplies from dominant suppliers . all risks should be addressed by effective , proportionate and non - discriminatory measures to be developed in preventive action plan and emergency plan . the results of the risk assessments should also contribute to the all risk assessments provided for in article 6 of decision no 1313 / 2013 / eu of the european parliament and of the council18 . __________________ 18 decision no 1313 / 2013 / eu of the european parliament and of the council of 17 december 2013 on a union civil protection mechanism .


### the roles and responsibilities of all natural gas undertakings and competent authorities should therefore be defined precisely in order to keep the internal gas market functioning properly , particularly in the event of supply disruptions and crises . such roles and responsibilities should be established in such a way as to ensure that a three - level approach is respected which would involve first the relevant natural gas undertakings and industry , then member states at national or regional level , and then the union . this regulation should enable natural gas undertakings and customers to rely on market mechanisms for as long as possible when coping with disruptions . however , it should also provide for mechanisms that can be deployed when markets alone are no longer able to deal adequately with a gas supply disruption . ### the roles and responsibilities of all natural gas undertakings and competent authorities should therefore be defined precisely in order to keep the internal gas market functioning properly , particularly in the event of supply disruptions and crises . such roles and responsibilities should be established in such a way as to ensure that a three - level approach is respected which would involve first the relevant natural gas undertakings and industry , then member states at national or regional level , and then the union . to that end , effective information - sharing across all levels should provide early warning with regard to disruption and the means of mitigation . this regulation is intended to enable natural gas undertakings and customers to rely on market mechanisms for as long as possible when coping with disruptions . however , it is also intended to provide for mechanisms that can be deployed when markets alone are no longer able to deal adequately with a gas supply disruption .


### taking into account all relevant national and regional circumstances , in particular market size , network configuration , actual flows , including outflows from the member states concerned , the possibility of physical gas flows in both directions including the potential need for consequent reinforcement of the transmission system , the presence of production and storage and the role of gas in the energy mixes , in particular with respect to district heating and electricity generation and for the operation of industries , and safety and gas quality considerations ; ### taking into account all relevant national and regional circumstances , in particular market size , the potential for gas demand reduction through energy efficiency measures and the deployment of renewable energy sources , network configuration , gas consumption trends , the utilisation rate of existing infrastructure , actual flows , including outflows from the member states concerned , the possibility of physical gas flows in both directions including the potential need for consequent reinforcement of the transmission system , the presence of production and storage and the role of gas in the energy mixes , in particular with respect to district heating and electricity generation and for the operation of industries , and safety and gas quality considerations ;


### so far , the potential for more efficient and less costly measures through regional cooperation has not been fully exploited . this has to do not only with better coordination of national mitigation actions in emergency situations , but also of national preventive measures , such as national storage or policies related to liquefied natural gas , which can be strategically important in certain regions . ### so far , the potential of regional cooperation to introduce more efficient and less costly measures has not been fully exploited . this applies to better coordination of national mitigation actions in emergency situations as well as to national preventive measures , such as national storage or policies related to liquefied natural gas , which can be strategically important in certain regions .


### in a spirit of solidarity , regional cooperation , involving both public authorities and natural gas undertakings , should be the guiding principle of this regulation , to identify the relevant risks in each region and optimise the benefits of coordinated measures to mitigate them and to implement the most cost - effective measures for union consumers . ### in a spirit of solidarity , regional cooperation which involves both public authorities and natural gas undertakings is the guiding principle of this regulation , with the aim of identifying the relevant risks in each region , optimising the benefits of coordinated measures to mitigate them , while ensuring that the measures are cost - effective for customers . regional cooperation should gradually be complemented with a stronger union perspective , allowing recourse to all available supplies and tools in the entire internal gas market . this could be facilitated by providing in - depth analysis at union level on the relevant emergency supply corridors , based on gas supply sources common for a group of member states .


### when implementing the measures provided for in this regulation , the competent authority shall establish the roles and responsibilities of the different actors involved in such a way as to ensure that a three - level approach is respected which involves first the relevant natural gas undertakings and industry , then member states at national or regional level , and then the union . ### when implementing the measures provided for in this regulation , the competent authority shall establish the roles and responsibilities of the different actors involved in such a way as to ensure a three - level approach which involves first the relevant natural gas undertakings and industry , then member states at national or regional level , and then the union .


### natural gas remains an essential component of the energy supply of the union . a large proportion of such gas is imported into the union from third countries . ### natural gas is an essential component of the energy supply of the union . this makes security of gas supply a key element of the union ' s overall energy security , with relevance to the union ' s competitiveness and growth . even though more than 50&#8239 ; % of gas consumption in the union and the rest of the european economic area is currently covered by domestic production , a growing proportion of gas is imported from third countries . enhancing the union ' s energy security and making its gas market more resilient thus requires creating a stable , market - based regulatory framework for developing gas production from domestic sources . furthermore , increasing energy efficiency as well as the use of renewable energy sources reduces the union ' s reliance on gas imports , thereby also addressing dependence on dominant external suppliers .