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New laws on digital content and digital services

On 10 August 2023, the Verkhovna Rada adopted the Draft Law on Digital Content and Digital Services (the “Digital Content Law”) and the Draft Law on Amendments to the Civil Code of Ukraine aimed at expanding the range of civil rights objects (the “Civil Code Law”).

Both laws have been sent to the President for his signature and have not yet been published, so they have not yet entered into force.

As for the main innovations of the Civil Code Law, it introduces a new object of civil rights, namely “digital things” – a good that is created and exists exclusively in the digital environment and has property value. Digital things include virtual assets, digital content and other goods to which this term is applied.

As for the Law on Digital Content, its content is the legal regulation of civil law relations between a contractor and a consumer regarding the performance of a digital content or digital service contract, as well as the protection of the rights of consumers who are provided with digital content or services.

According to the new Law, a digital service is a service that enables a consumer to create, process, store and distribute data in digital form or to access such data, as well as to perform any other actions with data in digital form created or downloaded by the consumer or other users of such service.

Digital services include, but are not limited to, those that enable the creation, processing, access or storage of data in digital form, including file hosting, word processing or games offered in cloud computing and social media.

Digital content means data that is created and made available in digital form. Digital content includes, in particular, computer programs, applications, video files, audio files, music files, digital games and e-books.

The Digital Content Law stipulates that the burden of proof for the provision of digital content and/or digital services lies with the performer.

For violations of consumer rights under this Law, business entities are subject to sanctions in the form of a fine in the event of:

– violations related to the provision of digital content and/or digital services – in the amount of ten times the value of the digital content, but not less than five tax-free minimum incomes (UAH 85);

– violations related to the conformity of digital content and/or digital services – in the amount of 300 per cent of the value of the digital content and/or digital service provided in violation of the requirements of this Law, but not less than twenty-five tax-free minimum incomes (UAH 425), etc.