22.07.2026
Gernot Fritz, Fabian Duschnig, Laurin Lutz
Millions of consumers sign up for streaming subscriptions online. As part of the sign-up process, they are often required to agree that the provider may begin performing the contract immediately and that they will consequently lose their right of withdrawal. Until now, this has been a common way for providers to prevent customers from using content and then withdrawing from the contract within 14 days.
Whether such an arrangement is permissible, however, depends crucially on whether the contract concerns the supply of digital content or the supply of a digital service. In Case C-234/25 (Sky Österreich Fernsehen), the Court of Justice of the European Union (CJEU) has now considered this distinction for the first time in the context of two Sky streaming subscriptions.
Its answer is inconvenient for many providers: a streaming offering that is continuously updated, monitors user behaviour and recommends content on that basis will generally not amount merely to the supply of digital content. Instead, it constitutes a digital service. The right of withdrawal therefore cannot be lost simply because the consumer has agreed that performance should begin immediately.
The judgment is relevant far beyond video streaming. It establishes a new benchmark for classifying a wide range of digital subscription models, from music and media platforms to e-learning services and digital databases.
Digital Content or Digital Service – Why the Distinction Matters
Consumers generally have a 14-day right of withdrawal in relation to contracts concluded at a distance or off-premises.
Where digital content is supplied without a tangible medium, the right of withdrawal may be lost as soon as the trader begins performing the contract. This requires, in particular, that the consumer has given prior express consent to performance beginning before the end of the withdrawal period and has acknowledged that this will result in the loss of the right of withdrawal.
Different rules apply to digital services. For service contracts, the right of withdrawal is generally lost only once the service has been fully performed. In the case of an ongoing streaming subscription, full performance will normally occur only at the end of the agreed subscription period.
The practical difference is considerable. For digital content, the right of withdrawal may, subject to the applicable conditions, be lost immediately when supply begins. For a digital service, the right generally remains available throughout the 14-day withdrawal period, even where the consumer has already started using the service.
Sky’s Streaming Offering
Sky Österreich offers two streaming subscriptions, “Sport & Live TV” and “Fiction & Live TV”. Customers may watch the programmes included in their subscription either live or on demand. The available content is updated continuously. Users also receive personalised recommendations based on their previous viewing behaviour.
Depending on the relevant licence, certain content may also be downloaded to the user’s device. Downloaded content may be viewed once and must be watched within a limited period after playback has begun.
When taking out a subscription, consumers were required to accept the following statement:
“When ordering a subscription: I acknowledge the Sky X information on the right of withdrawal. I agree that Sky X may begin performing the contract before the expiry of the 14-day withdrawal period and that, by ordering a subscription, I therefore lose my right of withdrawal.”
The Austrian Consumer Information Association (Verein für Konsumenteninformation – VKI) considered this term unlawful. In its view, Sky supplies a digital service, meaning that the right of withdrawal cannot be lost as soon as the consumer begins using the service.
Sky, by contrast, argued that the individual films, series and sports broadcasts constituted digital content. As that content was available immediately, Sky maintained that consumers could lose their right of withdrawal when performance began, provided that they had given the necessary consent.
The Austrian Supreme Court (Oberster Gerichtshof – OGH) referred the question of how such a streaming offering should be classified to the CJEU.
CJEU: The Dynamic Nature of the Offering Is the Decisive Criterion
The CJEU rejected a purely technical distinction. Whether content is accessed through a website, an application or a hyperlink is not decisive for its legal classification. Nor is the duration of supply conclusive in itself. Similarly, it does not matter whether the data is streamed or downloaded.
What matters is the extent to which the provider remains involved in supplying the service throughout the contractual period.
In the case of digital content, the focus is on making specified data available. Typical examples include purchasing an e-book, downloading a music album or obtaining one-off access to a particular film. The trader supplies identifiable content which, as a rule, does not subsequently change as a result of the consumer’s use.
A digital service, by contrast, is dynamic in nature. The provider does more than merely supply specific content. It continuously shapes and modifies the user experience, provides technical functionalities, analyses the user’s interactions and adapts the offering to the user’s behaviour or expectations.
The CJEU therefore shifts the focus away from the individual file and towards the service as a whole. In the context of a streaming subscription, it is not sufficient to point out that films or sports broadcasts are accessed in the form of digital data. The decisive question is whether the provider also supplies an actively managed, technically structured and user-specific environment on an ongoing basis.
Personalisation as a Key Indicator
According to the CJEU, an offering will be dynamic in particular where the provider monitors which content a consumer accesses, which playlists the consumer creates or which content is saved as a favourite.
Where that information is used to adapt the offering to the consumer’s individual behaviour or expectations, this points towards a digital service. The same applies where recommendations or other platform functionalities influence how the consumer uses the service.
The assessment must be based on the offering as a whole. Relevant factors include the structure of the service, the provider’s ongoing activities, the functionalities made available and whether those functionalities shape or influence the individual user experience.
A Download Function Does Not Automatically Change the Classification
The CJEU also expressly considered content that may be viewed offline after being downloaded.
The fact that a file is temporarily stored on the user’s device does not automatically mean that the offering as a whole constitutes a contract for the supply of digital content. The relevant question remains how the download function fits into the overall service.
Where downloading is merely one feature of a personalised and continuously managed streaming service, the subscription as a whole may still constitute a digital service. Providers therefore cannot determine the legal classification simply by offering limited offline use in addition to streaming.
Why the Right of Withdrawal Remains Available
The CJEU also based its classification on the purpose of the right of withdrawal. Consumers entering into distance contracts must be given sufficient time to examine the service and determine whether it meets their expectations.
In the case of a personalised streaming subscription, the user experience can only be assessed to a limited extent before the contract is concluded. Consumers may be familiar with individual titles or categories of content. They will not, however, necessarily be able to assess in advance how well the user interface works, how extensive the available offering actually is, how the recommendations are designed or whether the platform as a whole meets their expectations.
The CJEU therefore concluded that a streaming service constitutes a digital service where the offering is dynamic in nature and goes beyond the mere stable and, where applicable, continuous provision of specified content. It is now for the Austrian Supreme Court to decide the underlying proceedings on the basis of that interpretation.
Can Consumers Now Stream for Free for 14 Days?
Sky argued that classifying streaming subscriptions as digital services could facilitate abuse. Consumers could deliberately take out a subscription shortly before an important football match, the launch of a new series or the release of a highly anticipated film, watch the content and then withdraw from the contract.
The CJEU nevertheless considered providers’ interests to be adequately protected. Where a trader begins performing the contract during the withdrawal period at the consumer’s express request, a consumer who subsequently withdraws must, in principle, pay an amount proportionate to the service supplied up to that point.
Withdrawal therefore does not automatically mean that all services used during the withdrawal period must be provided free of charge.
According to the CJEU’s existing case law, the proportionate amount will generally be calculated on the basis of the total agreed price and the period for which the service was used. If, for example, a monthly subscription is withdrawn from after seven days, an appropriate pro-rata amount may generally be payable.
The CJEU clarified, however, that a calculation based exclusively on the period of use is not necessarily required in every case. Where a consumer takes out a subscription solely to access particularly valuable content during the withdrawal period, the provider may also take account of the economic value of the content actually viewed.
The relevant market value may provide useful guidance. Where a season of a series, a film or a sports broadcast is also offered separately on an on-demand basis, the customary price for that content may serve as a point of reference.
The judgment therefore allows providers, in principle, to consider not only the duration of use but also the consumer’s actual use of the service. Any amount charged must, however, remain proportionate. It must not be imposed as a lump sum or designed as a penalty for exercising the right of withdrawal.
Calculating the Proportionate Amount Becomes an Operational Challenge
The possibility of taking the economic value of consumed content into account does not resolve all practical difficulties. Instead, it shifts some of them into providers’ billing systems.
Companies must first determine when a purely time-based calculation will apply and in which circumstances the specific value of individual content should be taken into account. This raises questions such as how to determine the value of an individual football match, a high-budget film or a popular series within a comprehensive subscription package.
A standalone on-demand price may provide a suitable benchmark. The assessment becomes more difficult where the content is available exclusively as part of the subscription or where the consumer has accessed several items during the withdrawal period.
Technical implementation may also be challenging. If actual use is to affect the amount payable, the provider must be able to determine which content the consumer has in fact viewed. The relevant usage data must be recorded accurately and linked to the correct contract. At the same time, providers must comply with data protection requirements, transparency obligations and applicable retention and deletion policies.
Providers can also rely on a claim for proportionate payment only where the applicable information and consent requirements have been properly implemented in the ordering process. In particular, the consumer must expressly request that performance begin during the withdrawal period. Ambiguous or generic wording increases the risk that the provider will be unable to claim payment despite the consumer having used the service.
What Providers Should Review Now
The most immediate consequence of the judgment concerns the checkout process. A statement providing that the consumer loses the right of withdrawal because performance begins immediately will generally not be appropriate for a digital service. Such wording suggests that the right of withdrawal is lost as soon as access is activated. For an ongoing digital service, that is generally not the case.
Providers should therefore distinguish clearly between two separate questions:
- Should the service begin during the withdrawal period?
- What amount must the consumer pay if the consumer subsequently exercises the right of withdrawal?
This distinction should be reflected throughout the ordering process, the information on the right of withdrawal, the contractual terms and the confirmation provided to the consumer after the contract has been concluded.
The review should not be limited to legal documentation. Classification depends to a significant extent on how the product actually works. Companies should therefore assess their offerings jointly with their product, technology and marketing teams.
Subsequent changes to the product may also affect its legal classification. An offering that was originally static may become a digital service following the introduction of personalised recommendations or adaptive functionalities. Its classification under consumer law should therefore be reviewed not only at launch, but also whenever material changes are made.
Particular attention should be paid to bundled offerings. Where a subscription includes both individual downloadable content and ongoing cloud, personalisation or streaming functionalities, a differentiated assessment may be necessary. Describing all components in the same way in the terms and conditions is not sufficient to bring them within the same withdrawal regime.
Which Other Business Models May Be Affected?
The implications of the judgment extend beyond traditional video streaming. The CJEU’s criteria may be relevant to any digital offering where the provider remains actively involved in shaping the user experience throughout the contractual period.
For music and podcast platforms, personalised playlists, recommendations and automatically generated radio stations point towards classification as a digital service. The same may apply to digital news services where content is selected, prioritised or assembled into an individual feed based on the user’s reading behaviour.
E-learning platforms may also be affected where learning materials are adapted to the user’s progress, exercises are selected automatically or individual learning paths are generated. In the case of fitness and coaching services, dynamically adjusted training plans or recommendations may point towards the same classification.
Legal, research and specialist databases should also review their offerings. A database that merely provides access to a clearly defined body of material must be assessed differently from a platform that continuously generates personalised search results, alerts, topic suggestions or automated analyses.
This does not mean that every digital subscription automatically constitutes a digital service. The purchase of a specific file, one-off access to an individual film or the download of a predefined content package may still qualify as the supply of digital content. The boundaries become less clear, however, as the offering becomes more personalised, more frequently updated and more actively shaped by the provider.
Product Design Becomes a Consumer Law Criterion
The Sky judgment demonstrates the importance of correctly classifying digital offerings under consumer law. Recommendation functions, user profiles, personalised feeds and adaptive services are not merely issues of data protection, platform regulation or the AI Act. They may directly determine how long consumers can withdraw from a contract and which declarations providers may use during the ordering process.
The more dynamic and personalised a digital offering is, the less providers can assume that the right of withdrawal will be lost as soon as access is activated.
Companies operating digital subscription models should therefore classify their services on a product-specific basis, review existing checkout wording and information on the right of withdrawal, and develop a robust methodology for calculating any proportionate amount payable following withdrawal. Contractual documentation, technical usage data and billing systems must work together.
Our team advises on the classification of digital offerings and the practical implementation of the resulting requirements across checkout flows, consumer communications, contracts and billing systems.
