Terms of Use for Online Services and Digital Platforms: Compliance When Entering the EU Market

When a digital product becomes available to users from the European Union, even if the company is incorporated in Ukraine or another country, European consumer protection rules automatically begin to apply to it. Terms of Use should not be merely a text copied from competitors. They should be a document that defines exactly how you provide the service, which rights the user has, under which conditions access may be terminated, and how disputes are resolved.

European legislation sets out very clearly what such terms must contain and what they must not contain. Failure to comply with these requirements exposes the company to the risk of consumer complaints and enforcement measures by national consumer protection authorities. In addition, terms that are unfair to consumers may be unenforceable in court.

This is particularly important for online services and digital platforms with complex, multi-layered mechanisms of interaction with end users.

The European approach is based on several key principles. First, consumers must receive complete and understandable information before they click the “Pay” or “Register” button. Second, contractual terms must not be written in complicated language or conceal important restrictions in small print. Third, users must have a genuine opportunity to withdraw from the service or stop using it without excessive difficulty.

These principles are established in several key legal acts, which should be considered together rather than separately.

Information That Consumers Must Receive Before Entering into a Contract

Directive 2011/83/EU on consumer rights establishes the basic rules for distance contracts, including contracts concluded online.

Under Article 6 of the Directive, before a contract is concluded, the consumer must receive clear information about the main characteristics of the service, the total price, the payment and delivery conditions, where applicable, and the right of withdrawal.

For digital services, this means that, already at the subscription or registration stage, users must be able to see exactly what they will receive, how much it will cost, and whether automatic renewal applies.

Article 8 requires the button confirming an order to clearly indicate that clicking it creates an obligation to pay. If no such wording is provided, the consumer will not be bound by the contract.

Quality Requirements for Digital Services

Directive 2019/770/EU is particularly important for products that constitute digital content or digital services.

The Directive distinguishes between two sets of conformity requirements.

Under Article 7, which establishes subjective requirements, the service must conform to the description, quantity, quality, and functionality agreed in the contract. It must also be suitable for any particular purpose that the consumer made known to you when concluding the contract and that you accepted.

Under Article 8, which establishes objective requirements, the product must be fit for the ordinary purposes for which products of the same type are normally used, possess the quality and characteristics normally expected of products of that type, and correspond to statements made in advertising or demonstrations.

If you promise regular updates or a particular level of quality, those promises become part of the contract.

Article 11 provides that liability for a lack of conformity continues throughout the entire contractual period where the service is supplied continuously. This is important for SaaS platforms and subscription-based services: if the service stops functioning properly six months after the user begins using it, the user may require the service to be brought into conformity or, for example, request a proportionate reduction in price.

Right of Withdrawal for Digital Products

The right of withdrawal is one of the most sensitive issues for digital products.

Article 9 of Directive 2011/83/EU gives consumers 14 days to withdraw from a contract without giving any reason. For services, the period begins on the date the contract is concluded; for goods, it begins on the date they are received.

If you fail to provide the user with information about this right, the withdrawal period is extended by up to 12 months under Article 10.

However, important exceptions apply to digital content and digital services under Article 16 of the same Directive, and these exceptions operate differently.

For digital services, the right of withdrawal is lost once the service has been fully performed, but only where performance began with the consumer’s prior express consent and the consumer acknowledged that they would lose the right of withdrawal once the service had been fully performed.

For digital content supplied without a tangible medium, the right of withdrawal is lost as soon as performance begins, again provided that the consumer has given express consent and acknowledged the loss of the right of withdrawal.

It is therefore important for the Terms of Use to clearly specify when performance begins and to obtain the user’s express consent confirming that they understand that, once the service begins to be provided, withdrawal may become unavailable.

Article 16 of Directive 2019/770/EU further specifies what happens when such a contract is terminated: the supplier must refund payments relating to the unused period or to any period during which the service did not conform to the contract and must allow the user to retrieve their content free of charge.

Unfair Terms and the Plain-Language Requirement

A separate set of requirements concerns the fairness of the contractual terms themselves.

Article 5 of Directive 93/13/EEC on unfair terms in consumer contracts requires all terms to be drafted in plain and intelligible language. Where the wording is ambiguous, it must be interpreted in the manner most favourable to the consumer.

Article 6 provides that an unfair term is not binding on the consumer, while the remainder of the contract continues to apply where it is capable of doing so without the unfair term.

The Annex to the Directive contains an indicative and non-exhaustive list of terms that may be regarded as unfair. These include, in particular, provisions allowing the supplier to unilaterally amend the terms without a valid reason and without giving the consumer an opportunity to terminate the contract, as well as provisions limiting the supplier’s liability for harm caused by the supplier’s own fault.

If your Terms of Use contain a provision stating that “we are not liable for any losses,” it is highly likely that this provision will not be enforceable.

Rules for Concluding Contracts Electronically

Directive 2000/31/EC must also be taken into account in the context of electronic commerce.

Article 5 requires the service provider to ensure easy and permanent access to information about itself, including its name, geographic address, email address, registration details, and, where applicable, VAT identification number.

Articles 10 and 11 regulate the process of concluding contracts electronically. Before placing an order, users must clearly understand the technical steps involved, have an opportunity to correct input errors, and be able to store the contractual terms.

After an order is placed, the supplier must acknowledge receipt without undue delay.

Notice of Changes to the Terms of Use

If your service operates as an online platform through which business users may offer goods or services or publish their own content, the requirements of Regulation 2019/1150 on platform-to-business relations, or the P2B Regulation, also apply.

This Regulation protects business users of a platform rather than consumers.

Article 3 requires terms and conditions to be drafted in plain and intelligible language, remain easily available, and clearly describe the grounds on which content may be suspended or removed.

Business users must be notified of any changes to the terms at least 15 days in advance and have the right to terminate the contract during that period.

Article 4 provides that where a platform restricts, suspends, or removes a particular product or service, it must provide a written statement of reasons. If the platform terminates the provision of all services to a business user, at least 30 days’ prior notice is generally required.

Choice of Governing Law and Jurisdiction

Another practical matter is the choice of governing law and jurisdiction.

The Rome I Regulation, Regulation 593/2008, and EU consumer protection legislation contain provisions preventing consumers from being deprived of the protection granted by the mandatory rules of the country in which they reside where the supplier directs its activities to that country.

In many cases, it is therefore more effective either to ensure compliance with the law of the country where the largest number of users is located or to expressly state that mandatory consumer protection provisions remain applicable regardless of the governing law selected in the Terms of Use.

Additional Requirements for Online Platforms Under the Digital Services Act

If your service allows users to publish their own content, leave comments, create listings, or enter into transactions with other users, the requirements of Regulation (EU) 2022/2065 on digital services, known as the Digital Services Act or DSA, are likely to apply.

The DSA applies to so-called intermediary services and covers all intermediaries providing services to users in the EU, regardless of where the service provider is incorporated.

This means that it applies not only to major social networks and marketplaces, but also to many SaaS platforms, forums, user-generated content services, online marketplaces, and even EdTech platforms where users are able to publish materials.

The Regulation establishes a framework under which the scope of obligations depends on the type and size of the intermediary.

A separate set of additional obligations, contained in Section 4 of the Regulation, Articles 29–32, applies to platforms that allow consumers to conclude distance contracts with traders.

An important exemption is provided in this context.

Under Article 29, providers of such platforms that qualify as micro or small enterprises under the EU criteria set out in Recommendation 2003/361/EC are exempt from all obligations in this section, meaning Articles 30, 31, and 32, unless the platform has been designated as a very large online platform, or VLOP, under Article 33.

Where an enterprise loses its micro or small enterprise status, the exemption continues to apply for a further 12 months.

For most Ukrainian companies that are only beginning to enter the European market, this means that several DSA requirements may not apply at the outset.

The key point is that the exemption is linked to the size of the platform operator itself, not to the traders operating through the platform.

The traceability-of-traders requirement established by Article 30 therefore applies not “despite the exemption,” but once your platform exceeds the micro or small enterprise threshold or is designated as a VLOP.

Because this obligation begins to apply automatically once the threshold is crossed, the relevant mechanisms should be incorporated into the Terms of Use in advance.

If your platform allows consumers to conclude distance contracts with sellers or service providers—for example, if you sell third-party courses, services, or goods or include marketplace functionality—Article 30 will require you to:

• collect specified information about traders before allowing them to offer goods or services to consumers in the EU;
• obtain the trader’s name, address, telephone number, and email address, a copy of an identification document, payment account details, any commercial register number, and a self-certification confirming that the goods and services offered comply with EU law;
• make reasonable efforts to verify the reliability of the information provided through official databases or online interfaces;
• retain this information securely for six months after the relationship with the trader ends and then delete it;
• suspend the trader’s access if they provide inaccurate or incomplete information and fail to correct it following a request from the platform.

In practice, this means that your Terms of Use should clearly specify:

• which information users must provide for verification;
• that the platform has the right to verify this information;
• that providing inaccurate information is grounds for suspending an account or removing content;
• how long the platform will retain this information after the cooperation ends.

In addition to trader verification requirements, the DSA generally raises the standards of transparency and accountability applicable to platforms.

Even where your company benefits from the small-business exemption, it is advisable to incorporate clear content moderation rules, complaint procedures, and mechanisms for removing illegal content into the Terms of Use from the outset.

This not only reduces legal risks but also increases the confidence of European users.

If your service is growing rapidly and the number of EU users is increasing, you should periodically check whether you have exceeded the threshold at which the additional DSA obligations begin to apply in full.

How to Properly Structure and Update the Terms of Use

Terms of Use should not be treated as a static document.

The law does not establish a specific review frequency, but in practice, the Terms of Use should be reviewed at least once a year and whenever the service’s functionality or monetisation model changes or new features relating to user-generated content or similar matters are introduced.

The Terms of Use must, of course, also be updated whenever applicable legislation changes.

It is important that the document be understandable not only to lawyers but also to ordinary users.

Long sentences containing multiple subordinate clauses, unexplained technical terminology, and hidden references to other documents reduce the likelihood that the terms will be regarded as fair.

Many European companies present key provisions concerning the right of withdrawal, automatic subscription renewal, and personal data processing in separate sections with prominent headings. This significantly reduces the risk of the terms being challenged.

The relationship between the Terms of Use and other documents should also be kept in mind.

The Privacy Policy, Cookie Policy, and any community rules must not contradict the Terms of Use. If one document says one thing and another says something different, this creates a risk that the terms will be regarded as insufficiently transparent.

Best practice is to make the structure of the Terms of Use as logical as possible: begin with general provisions concerning the service, then provide specific rules for different types of users, followed by a separate section governing user-generated content, a clear section concerning access termination and refunds, and provisions addressing limitations of liability and other relevant matters.

The specialists at Legal IT Group assist technology companies on a daily basis with developing and adapting Terms of Use for complex digital platforms with multi-layered functionality—from flexible subscriptions and user-generated content to marketplace features and integrations.

We conduct an in-depth analysis of how your service actually operates and prepare documents that genuinely protect the business within the European legal environment.