European Competition and Consumer Day

On 24-25 November in Poznan (Poland) there will be an event organized to celebrate the European Competition and Consumer Day. Every year the European Competition Day is organized by the country that holds the Presidency. This year Poland decided to devote this day to the interaction between competition and consumer protection (partially, due to both these areas being covered by the Polish Office of Competition and Consumer Protection). The title is: "Competition - what's in it for consumers?". If you are interested in taking part in it, you may find more information about participation and programme on the event's website.

AG Mengozzi: Scope of Product Liability Directive does not extend to service providers using defective products

The Opinion by Advocate General Mengozzi in Centre hospitalier universitaire de Besançon (case C-495/10) concerns the scope of the Product Liability Directive and the possibility for Member States to set rules on the liability of service providers for defective products used. It concerns a French case dealing with the damages of a thirteen year-old boy, who suffered burns during surgery in a French hospital as a result of a defective heated mattress.

According to the highest administrative court of France, the Conseil d’État, public health providers are strictly liable for damages caused to patients as a consequence of defective devices and products. According to the Conseil d’État, this liability rule follows from French administrative law rather than the legislation implementing the Product Liability Directive. In this case before the ECJ, this strict liability rule for public health providers is questioned, as it is argued that it is in breach of the Product Liability Directive.

Advocate General Mengozzi points out that in order for the rule to be in breach of the Directive, it must fall under its scope. He points out that this can only be the case if :

(a) the public health provider could be seen as supplier in the sense of Article 3(3) of the Directive, or

(b) if the liability rules for producers and other parties covered by the Directive preclude liability of others.

According to the Advocate General, neither is the case.

As to (a), the Mengozzi argues that a public health provider can not be seen as a supplier under the Directive. As a main rule, the Directive holds liable the producer of the product, i.e. the actual manufacturer. If the producer can not be identified, other parties may be liable instead. One of these parties is what the Directive refers to as the “supplier” of the product. But this term does not include the service provider, i.e. a party who uses a (defective) product while providing a service to a consumer. Rather, it refers to the other parties in the chain of distribution of the product, with the last seller being the last party in the chain. This is not surprising, as the Directive deals with manufacturer’s liability rather than user’s liability, even though the manufacturer’s liability is extended to other parties in the distribution chain if the actual manufacturer can not be identified.

The answer to (b) is somewhat more complex. As the Directive determines the liability of some parties but not of others, it could be argued that the Directive precludes liability of those other parties. So the reasoning would be that because the manufacturer and, under circumstances, later suppliers can be held liable, Member States can not make other parties liable. Mengozzi argues differently. The most important argument given on this point is that issues that are not explicitly dealt with under the Directive, do not fall under its scope. As a consequence, Member States have the freedom to design and apply their own rules, including e.g. the French rule holding public health care providers liable for damages as a result of the use of defective equipment. This makes sense: the Product Liability Directive does not govern all aspects of liability of defective products, leaving the topics left untouched open for regulation by Member States.

The Advocate General adds that if the Court decides differently on the question of scope, i.e. if it would decide that a service provider’s liability would fall under the scope of the Directive, this would breach Article 13 of the Directive. However, it seems likely that the Court follows the Advocate General on the question of scope, thus leaving the French liability rule untouched.

Click here for the opinion.

A moment for our readers

Originally, I created this blog in order to keep in touch with developments in European consumer law. It gave me a motivation to look up the news every day (and read it immediately, without sending it to my email for later reference). This blog was also planned to be an archive for all the news, easy to fall back on months later. It's not an anniversary of this blog today, but it has been some time since I checked Google Analytics (a brilliant statistics tool, btw!) to see how we were doing. And wow, was I surprised. I mean I hear from time to time that someone, aside my colleagues, is reading the blog. My students, other academics I run into mention this blog occasionally. But when I compared today the number of visits that this blog had in the past month to the visits within the same period of time but last year, I was astonished. The number increased over 200%. I guess we are doing something right. I'll try to keep it up this way. :)

Should medical tourism be reimbursed by national social security system? - CJEU case in Commission v. Portugal C-255/09

27 October 2010: CJEU case C-255/09 Commission v. Portugal

Unfortunately, the fall while often beautiful in its various colours also leaves us susceptible to various infections. Our bodies have to adjust to lower temperatures, lack of sun, etc. and often cannot fight against a flu, throat infection, UTI... It seems appropriate that the CJEU ruled today in a case concerning consumers health issues and protection of their right to have the medical costs reimbursed by social security and insurance.

Article 22 of the Regulation 1408/71 on the application of social security schemes to employed persons and their families moving within the Community provides that within Europe consumers who travel to another country for non-hospital medical care are supposed to be reimbursed for the cost thereof in their own country. In a recent case of 5 October 2010 Commission v. France (C-512/08) the CJEU decided that a Member State could make reimbursement for non-hospital care planned in another Member State subject to prior authorisation if that care required the use of major and costly equipment.

In the current case, against Portugal, the CJEU considered whether Member States were allowed to introduce such a limitation of the need to obtain prior authorisation for medical treatment abroad in order to obtain reimbursement, when no costly or major equipment would be used. Portugal, namely, allows consumers to claim such reimbursement only after they fulfilled a threefold prior authorisation requirement. Additionally, consumers may claim such reimbursement only for 'highly specialised' foreign medical care, which cannot be provided in Portugal due to technical difficulties or a lack of qualified personnel.

The CJEU stated, first, that medical services are covered by the provisions on the freedom to provide services. (Par. 46) This means that Article 49 EC (of the Treaty) applies to cross-border healthcare. (Par. 52) On the basis of Article 49 EC Member States may not adopt national rules which make provision of services between Member States more difficult than provision of same services within a single Member State. In previous case law (e.g. Kohll; Smits and Peerbooms, Commission v. France) the CJEU confirmed that:

"the mere requirement, for treatment planned in another Member State, of prior authorisation to which responsibility for payment by the competent institution is made subject, in accordance with the rules governing cover in force in the Member State to which that institution belongs, constitutes, both for patients and service providers, an obstacle to the freedom to provide services, since such a system deters, or even prevents, those patients from approaching providers of medical services established in a Member State to obtain the treatment in question" (Par. 60)

In the current case it is foreseeable that Portuguese consumers would be deterred from seeking medical care abroad due to a prospect of financial loss in the event of refusal by the national health system to meet the medical costs. An additional deterrent factor is the complexity of the three-stage administrative authorisation procedure. (Par. 62) Moreover, the fact that reimbursement might be granted only when such a medical procedure is not available in Portugal further limits the possibility of consumers seeking medical care abroad. (Par. 63) This all indicates that prior authorisation is a restriction on the freedom to provide services. (Par. 71)

This restriction may not, in this case, be justified by an aim of maintaining the financial balance of the social security system (this argument for limitation was, e.g., accepted in Commission v. France). No evidence has been provided that in case the medical care is not 'major', the Portuguese social security system would be overburdened, taking into account that it's usually only consumers in border areas or where specific conditions are to be treated who travel for medical reasons. (Par. 77-79) As far as the claim was made by Portugal that such restrictions are necessary in order to protect the social security system, the CJEU observed that Member States are still free to set various conditions on which benefits (also, reimbursement) are granted:

"in so far as they are neither discriminatory nor an obstacle to freedom of movement of persons (...) That is particularly so in the case of the requirement that a general practitioner should be consulted prior to consulting a specialist" (Par. 86)

Additionally, Member States may fix the amounts of reimbursement which patients who have received care in another Member State can claim (objectively, without discrimination and using transparent criteria). (Par. 87)

Finally, the CJEU decided that the fact that Portugal does not provide for any possibility of reimbursement of non-hospital medical expenses incurred in another Member State in respect of a consultation with, e.g., a general practitioner or a dentist (not a highly specialised care) is contrary to the freedom of provision of services, as well. (Par. 95)

I agree with the CJEU that cross-border medical care is not likely to become a threat to social security systems, since consumers would most likely prefer to be treated close to their home, family and friends, as well as by doctors who speak their language. Therefore, it seems that when a consumer is looking for medical care abroad he has to have solid reasons to do so and should be enabled financial compensation just as he would have been compensated for undergoing the same treatment in his own Member State.

Where to sue for harmful online content? CJEU case in eDate Advertising and Martinez/Martinez (C-509/09, C-161/10)

25 October 2011: CJEU joined cases C-509/09 and C-161/10 eDate Advertising and Martinez/Martinez

Today CJEU gave judgment in eDate Advertising case setting rules as to which court should have jurisdiction in cases concerning infringement (alleged one) of personality rights that happened by means of content placed online on an internet website. It gave interpretation to Article 5(3) of Regulation 44/2001 on jurisdiction and recognition and enforcement of judgments in civil and commercial matters as well as Article 3 of Directive 2000/31/EC on electronic commerce, of which the first one is of particular interest for consumers and will be discussed here.

The problem that had been addressed was as follows. Imagine that on some website personal information of a consumer is published. If that consumer thinks that this information is either incorrect or improper and should be taken down from the internet, he might know what his first step should be, i.e. contacting the website, but what he should do after the website doesn't react to his notification is a bit more tricky to figure out. The consumer may go to his own national court to demand removal of such information, but if the website is set on a server of another Member State, operated and owned by parties from another Member State, then the chances are that it will be difficult to establish which court should have jurisdiction over such procedures.

This is what happened in the two cases presented to the CJEU. In eDate Advertising X, domiciled in Germany, demanded removal of an archived internet news report on a Rainbow website in which his full name was given as a person who murdered a well-known actor and was appealing from his conviction. After being released on parole X wanted the website to stop reporting that matter and refrain from future publication. eDate Advertising operated this website and was established in Austria. In Martinez/Martinez the French actor Olivier Martinez and his father, Robert, complained of interference with their private lives, etc. by an English website of Sunday Mirror which published a text entitled "Kylie Minogue is back with Olivier Martinez" detailing their meeting in 2008.

In both these cases national courts of the place of domicile of persons claiming alleged infringement of their personality rights were not sure as to whether they had jurisdiction. Article 5(3) of the above-mentioned Regulation determines that in matters relating to tort, delict or quasi-delict a person domiciled in a Member State may be sued in courts of another Member State, where the harmful event occurred or may occur. This 'place where the harmful event occurred or may occur' is difficult to establish when infringement may happen by means of content placed online. In an earlier case Shevill and Others the CJEU had held that:

"in the case of defamation by means of a newspaper article distributed in several Contracting States, the victim may bring an action for damages against the publisher either before the courts of the Contracting State of the place where the publisher of the defamatory publication is established, which have jurisdiction to award damages for all of the harm caused by the defamation, or before the courts of each Contracting State in which the publication was distributed and where the victim claims to have suffered injury to his reputation, which have jurisdiction to rule solely in respect of the harm caused in the State of the court seised"  (Par. 42)

The same considerations may be applied to other media and means of communication, e.g. online content. (Par. 44) However, the CJEU takes into account that distribution online happens instantly after publication of the content and is, in principle, unlimited. Moreover, it might be difficult to quantify that distribution with certainty and accuracy in a particular Member State due to technological difficulties. This leads to difficulties in determining damage that had been caused within a particular Member State. (Par. 45-46) At the same time, one cannot help but notice the serious nature of the harm which may be suffered by a person whose rights have been infringed on a world-wide basis. (Par. 47) Taking this into account, the CJEU decided that in cases of online infringement of personality rights the above-mentioned rule should be adjusted in favour of the victim:

"a person who has suffered an infringement of a personality right by means of the internet may bring an action in one forum in respect of all of the damage caused, depending on the place in which the damage caused in the European Union by that infringement occurred. Given that the impact which material placed online is liable to have on an individual’s personality rights might best be assessed by the court of the place where the alleged victim has his centre of interests, the attribution of jurisdiction to that court corresponds to the objective of the sound administration of justice" (Par. 48)

The centre of interest means usually habitual residence, but can be determined otherwise if e.g. professional activity is pursued in another Member State. (Par. 49)

This all means that if information is posted about consumer's private life online that he would like to object to, he might do so in his own national court, regardless where the website that posted that information is established. Moreover, he may claim damages in one court for infringement of his personal rights all over Europe and claim all of his damages in one procedure.

When the going gets tough... get tough on insider dealing and market manipulation

A few days ago the European Commission released a new proposal for a Regulation on insider dealing and market manipulation (together these practices constitute market abuse) (Getting tough on insider dealing and market manipulation). It has been mentioned a few times on this blog that the European Commission tries to contribute to the process of sanation of financial markets by recognizing and dealing with some of its issues (e.g. Shortcoming of a financial market to be healed by shortselling regulation, Cross-border debt recovery to be made easier for consumers and SMEs). One of them is an increase in the possibilities of market manipulation due to globalization of financial markets, their complexity and new technologies. Insider dealing means that a person is trading in financial instruments after having obtained possession of price-sensitive inside information in relation to those instruments. Market manipulation is understood as artificial manipulation of prices of financial instruments through practices such as spreading of false information or rumours and conducting trades in related instruments. These practices concern consumers only indirectly by influencing the stability and transparency of the financial market. However, this indirect influence can have quite a strong effect on consumers, which means this new development in European law is worth mentioning here (see also previous post on Inside Job).

The new proposal intends to strengthen investor protection already offered by the Market Abuse Directive (2003/6/EC). It extends the scope of protection to financial instruments that are only traded on new platforms (e.g. multilateral trading facilities) and over the counter as well as adapts the existing rules to new technologies (e.g. high frequency trading within which certain practices, like "quote stuffing" - i.e. submitting orders without an intention to trade but to disrupt a trading system - will be recognized as prohibited market manipulation).

"The proposal clarifies that market abuse occurring across both commodity and related derivative markets is prohibited, and reinforces cooperation between financial and commodity regulators. The proposal includes a number of measures to ensure regulators have access to the information they need to detect and sanction market abuse. Since the sanctions currently available to regulators often lack a deterrent effect, the proposal introduces tougher and greater harmonisation of sanctions, including possible criminal sanctions which are the subject of a separate but complementary proposal."

This means that regulators will also gain the power to access phone and data traffic records from telecoms operators or to access private documents and premises (upon prior judicial warrant) where a reasonable suspicion exists of insider dealing or market manipulation. Whistleblowers will be granted protection and incentives for reporting market abuse. Also suspicious unexecuted orders and suspicious OTC transactions are to be reported. Additionally, an offence of 'attempted market manipulation' is introduced to protect the parties in the financial market from attempts to manipulated the market, where that manipulator does not succeed in actual trading practices. As far as sanctions are concerned: fines are not to be less than the profit made from market abuse, and not more than two times any such profit.

A proposal for a Directive on criminal sanctions was introduced as well, according to which, criminal sanctions will be applied for intentional offence of insider dealing and market manipulation (European Commission seeks criminal sanctions for insider dealing and market manipulation to improve deterrence and market integrity). Currently, the Member States differ in regulation of such offences which means that investors might avoid sanctions by 'forum shopping'.

For more information see FAQ about these two proposals. See also the website of The EU Single Market on Market Abuse.

Shortcomings of a financial market to be healed by a short selling regulation

In May this year we reported that a draft Regulation on short selling and credit default swaps (Short selling regulation?) is being prepared by the European institutions. Last week an agreement has been reached between the Council and the Parliament on this matter and only a formal endorsement lacks before this Regulation enters into force. The new rules are supposed to increase transparency, responsibility and stability in short selling transactions that are so often difficult to understand by consumers. After the regulation is enacted the short positions will need to be disclosed to regulators and they will have the power to limit short selling on a temporary basis in exceptional situations. This regulation is one of the measures that is seen as necessary to restore a healthy financial market and prevent future financial crisis (since short selling was seen as an aggravating factor in price declines in distressed markets).

"In a welcome improvement to our original proposal, so-called "naked" sovereign CDS positions will be prohibited where sovereign CDS are not acquired to hedge an exposure which is correlated to the value of the sovereign debt. The restriction will not apply to primary dealers and market makers. A competent authority will be able to temporarily suspend these restrictions where it believes, based on objective elements, that its sovereign debt market is not functioning properly and that such restrictions might have a negative impact on the sovereign credit default swap market. These balanced measures will ensure that sovereign CDS are used for the purpose for which they were designed, hedging against the risk of sovereign default, without putting at risk the proper functioning of sovereign debt markets." (Commissioner Michel Barnier welcomes trilogue agreement by Council and Parliament on new rules for short selling and Credit Default Swaps).

See FAQ for more details on this new regulation.

Any thoughts on the internal market?

If you are interested in sharing them, finding out what others think and getting some answers from the European Commission as to any doubts that you might have about the internal market... tune in to Facebook!

On Wednesday, the 26th of October, 15.00-16.00, on the European Commission's Facebook page a chat is organized on this subject. Main findings from a market research about opinions on the internal market may be found in the video below.

What's the score? - Consumer Markets Scoreboard Autumn 2011

The 6th Consumer Markets Scoreboard is now available on the website of the European Commission, DG Health and Consumers. The Scoreboard is meant to help the Commission 'identify potentially underperforming sectors in the single market from the consumers' perspective' and ranks '51 consumer markets, covering more than 60% of household budgets, in terms of consumer trust, satisfaction, the ease of switching and comparing offers, problems and complaints, choice and prices' (see the Q&A press release for more details on the Scoreboard's functions and this year's main results).

Market sectors that, according to the new Scoreboard, remain problematic from the consumers' point of view are (not surprisingly..) those concerning financial services: 'Consumers are most satisfied with "books, magazines and newspapers", "personal care services" and "glasses and lenses". The lowest satisfaction scores are assigned to "investments, pensions, securities", "mortgages" and "real estate services". "Train services" obtain the highest percentage of consumers giving a very poor score (16 %)' (p. 15 of the report).

Further action that will be taken on the basis of these results includes the launch of two in-depth market studies, one on consumer credit, the other on fuels. For those interested in the facts and figures presented on the Scoreboard, detailed breakdowns on different aspects of the data can be found on the related Consumer Market Monitoring Dashboard.

World Food Day

Today is a World Food Day which was proclaimed in 1979 by the Conference of the Food and Agriculture Organization (FAO). It basically reminds us the founding date of the FAO in 1945 (and is not associated with any particular world food crisis etc.). The idea behind establishing this Day was to remind consumers of the world food problem and to strengthen solidarity in struggle against hunger, malnutrition and poverty. The UN endorsed observance of the Day by resolution 35/70 of 5 December 1980 stating that: 

"food is a requisite for human survival and well-being and a fundamental human necessity".

World Food Day of 2011 has a following theme: "Food prices - from crisis to stability", and intends to highlight a major threat to food security in developing countries due to price swings. According to the World Bank in 2010-2011 rising food costs pushed nearly 70 million people into extreme poverty.

I would also like to point out that a month ago we celebrated the EU Food Safety Day during which lots of attention was given to food waste (see also earlier post on this blog about this: Love food. Hate waste.). In the framework of the EU 2020 Resource Efficiency Flagship programme the Commission is looking at how to minimise food waste and improve food packaging without compromising food safety (EU Food Safety Day: Commissioner Dalli on food waste). What scared me about this news was the statistics quoted.

Annual food waste in the EU is currently estimated at 89 million tonnes and is expected to rise to 126 million tonnes by 2020! Consumers waste on average 565 euros due to food waste per household per year, 60% of which could be avoided.

Scary, ain't it? Let's do something about it!

More compensation to air passengers - CJEU in case Sousa Rodríguez and Others

13 October 2011: CJEU case C-83/10 Sousa Rodríguez and Others

The CJEU decided today a case concerning interpretation of the Regulation (EC) No. 261/2004 establishing common rules on compensation and assistance to passengers in the event of denied boardng and of cancellation or long delay of flights (see the comments on the opinion of the AG in: Compensation for cancelled flight). Article 2(1) of this Regulation defines cancellation as:

"the non-operation of a flight which was previously planned and on which at least one place was reserved"

Article 5 of the Regulation gives passengers rights to claim: assistance by the operating air carrier (in accordance with Article 9) and compensation (in accordance with Article 7). Article 12 states that passengers have a right to claim further compensation than the one provided for in the Regulation.

The dispute concerned a flight of Air France from Paris to Vigo (Spain). A few minutes after the flight took off as planned, the pilot decided to return to the departure point, Charles de Gaulle airport in Paris, due to a technical failure of the plane. Three passengers were offered a flight the next day from Paris Orly to Porto (Portugal), from where they travelled to Vigo by taxi. Another traveller got a seat on a flight the same day, from Paris to Vigo via Bilbao. All other passengers were offered a flight the following day from Paris to Vigo, scheduled at the same time as the one that had broken down. Only one passenger was provided with accommodation at Air France's cost or received any assistance from that airline. Seven passengers brought an action against Air France for damages for breach of contracts of carriage by air. They demand damages in the amount as prescribed by Article 7 (250 euro each), one of the passengers claims also costs he incurred for his transfer by taxi from Porto to Vigo. Another applicant claims repayment of his meal costs at the Paris airport, as well as those in respect of his dog's being kept in boarding kennels for a day longer than initally expected. All other passengers also claim an additional compensation for non-material damage they consider they have suffered.

Was the flight cancelled?

Firstly, Air France tried to defend itself by claiming that there was no 'cancellation' in this case, as defined by the Regulation, which would mean that they would not have to provide any compensation as per the Regulation. They had claimed, therefore, that the flight took off according to the schedule, so it may not be perceived as cancelled nor as delayed. 

The CJEU had no problem stating that this factual situation could be seen as 'cancellation', as well. The court reminded that:

"a flight consists, in essence, of an air transport operation, being as it were a ‘unit’ of such transport, performed by an air carrier which fixes its itinerary" (Par. 27)

An itinerary is an essential element of the flight, as the flight is operate with the carrier's pre-arranged planning in mind.

"As the term ‘itinerary’ means the journey to be made by aeroplane from the airport of departure to the airport of arrival according to a fixed schedule, it follows that, for a flight to be considered to have been operated, it is not enough that the aeroplane left in accordance with the scheduled itinerary, but it must also have reached its destination as appearing in the said itinerary. The fact that take-off occurred but that the aeroplane then returned to the airport of departure without having reached the destination appearing in the itinerary means that the flight, as initially scheduled, cannot be considered as having been operated." (Par. 28)

The above means that also when cancellation happened due to practical circumstances (returning the plane from its way towards destination to its port of origin due to mechanical failure) and not due to an express decision cancelling it, it should still be perceived as cancellation. (Par. 29) As a result:

 

"the answer to the first question is that ‘cancellation’, as defined in Article 2(1) of Regulation No 261/2004, must be interpreted as meaning that, in a situation such as that at issue in the main proceedings, it does not refer only to the situation in which the aeroplane in question fails to take off at all, but also covers the case in which that aeroplane took off but, for whatever reason, was subsequently forced to return to the airport of departure where the passengers of that aeroplane were transferred onto other flights." (Par. 35)

What kind of compensation could the passengers claim?

 

The CJEU makes clear that passengers rights to compensation provided for in the Regulation is of a minimum nature. (Par. 37) Article 12 on 'further compensation' intends to make sure that passengers are compensated:

 

"for the entirety of the damage that they have suffered due to the failure of the air carrier to fulfil its contractual obligations" (Par. 38)

 

National courts are therefore allowed to order the air carrier to compensate damage arising, for passengers, from breach of contract of carriage by air on a legal basis other than the Regulation, e.g. on the basis of the Montreal Convention and national law provisions. (Par. 38) The Montreal Convention refers to damages (Chapter III) as including both material and non-material damage (see: case C-63/09 Walz). This means that passengers are free to claim non-material damage within 'further compensation' as described by Article 12 of the Regulation. (Par. 41)

 

It's interesting to note what the CJEU did with compensation of the expenses that the passengers incurred due to the failure of the carrier to fulfill its obligations to assist on the basis of Article 8 and 9 of the Regulation (reimbursement of ticket or re-routing to final destination, cost of transfer between the airport of arrival and originally scheduled airport, meal, accommodation, communication costs etc.). These expenses may not be seen as part of 'further compensation' regulated by Article 12 of the Regulation. (Par. 42-43) That does not mean, however, that consumers may not claim compensation for these expenses, if the air carrier fails to fulfil these obligations voluntarily. (Par. 44)

 

What if the consumers based their claims on the breach of Article 12 of the Regulation and did not mention breach of Article 8 and 9 thereof?

 

"there is nothing in Regulation No 261/2004 that precludes the award of compensation in respect of a failure to fulfil the obligations provided for by Article 8 and Article 9 therein, if those provisions are not invoked by the air passengers." (Par. 45)

This means that the national court may adjudicate of its own motion that there was a breach of these provisions of the Regulation and award damages to the passengers.

 

This is a very interesting case that once again makes it clear that air carriers need to fulfil all the legal obligations that are placed on them in respect of cancelled and delayed flights and not try to look for loopholes in these regulations.

Common European Sales Law

Just published: the Commission's proposal for a Common European Sales Law.
More information can be found in the press release and on the website of DG Justice.
The press conference can be watched here.

Tune in on the European Commission today - press conference at 12.30

Commissioner Reding has called a press conference for 12.30 today on which she will announce a proposal to bring more coherence to European contract law. It is expected that this will entail a proposal for an 'optional instrument' that contracting parties may choose to apply to their agreements.

It should be possible to follow the press conference 'live' through the Commission's website.

To be continued...

Are we there yet?... Adoption of Consumer Rights Directive. Finally!

The new EU Consumer Rights Directive has been formally adopted today by Member States in the EU's Council of Ministers. The works on this Directive were stormy and its scope has changed tremendously from the first draft that we had seen in October 2008. The agreement between the institutions of the EU was difficult to reach, but after many compromises had been made, the Directive became a reality. The final text is not published yet, but from the news (New EU rules on consumer rights to enter into force; Council approves new directive) it seems that the text had not changed since June 2011, i.e. the last amendments adopted by the European Parliament. Spain was the only country who voted against adoption of this Directive in the Council. The Directive will enter into force 20 days after its publication in the Official Journal. The Member States will have 2 years to implement it.

For top 10 benefits for consumers in the new Directive see here. More detailed analysis will follow on this blog as soon as we get the official text.

Protecting minors' privacy in social networking

As part of the Digital Agenda, the European Commission aims at enhancing consumers' trust in the Internet. One way to do this is, would be by reviewing protection of minors online from such risks as grooming (some child abusers will pose as children online and make arrangement to meet with them in person) or cyber-bullying (using the Internet to harm other people in a deliberate, repeated and hostile manner) (more in: Digital Agenda: social networks can do much more to protect minors' privacy). A report on the Safer Social Networking Principles for the EU focused partially on the protection granted to minors by social networking sites. 

The worrying finds included the following: 

• only 2/9 social networking sites have default settings which make minors' personal profiles accessible only to their approved list of contacts;
• all sites tested allow for anyone to send friend request to minors;
• 6/9 sites allow friends of friends to access directly minors' profiles.

The good finds were, e.g.:

• majority of sites gives youngsters age-appropriate safety information, guidance, etc.;
• all sites provide shorter and more child-friendy version of their Terms of Use or Service.

Are consumers free to shop for cheapest TV decoders in the EU regardless broadcasting licenses? - ECJ in case Football Association Premier League and Others

4 October 2011: ECJ case C-403/08 Football Association Premier League and Others

Last post for today concerns the ECJ ruling of 4 October 2011 in the case C-403/08 Football Association Premier League and Others. It's strictly speaking not a consumer law case, but it will influence also consumers so it's important to briefly mention it. 

Premier League is a professional football league competition for football clubs in England (that explanation shouldn't be necessary, but I'm from time to time surprised by someone who is completely not familiar with sport environment). All of the Premier League matches are filmed, however, the broadcasting thereof is strictly limited, i.e. broadcasting rights for live transmissions are licensed and given to various parties on a territorial basis and for a certain time only (under an open competitive tender procedure, which means that the higher bidder wins). As a result, it's difficult to enjoy a good English football game unless you go to a pub that has a license for broadcasting them or you buy/rent a decoder for the private channel that got the license to broadcast these games yourself. All in all, it's a costly business. In order to make sure that the broadcasting rights are being observed, broadcasters are obliged to ensure that their transmission are being encoded so that they cannot be received outside the territory for which the license was granted and they are prohibited from supplying decoding devices that could be used outside that territory. 

In the past few years in the UK certain bars and restaurants have begun to use foreign decoders to access Premier League matches. The foreign decoders allow access to a satellite channel broadcast in another Member State, the subscription to which is less expensive than the English subscription. The decoders in question were manufactured legally but used in unauthorised manner, since they were never supposed to leave the territory of a given Member State. This, of course, undermines the exclusivity of rights granted by licence in a given territory and the value of those rights. It doesn't come as a surprise that a lawsuit was brought against some owners of pubs and restaurants who used this practice in the UK. The English law prohibited such practices, but the case was directed to the ECJ in order to establish whether such a prohibition was not contrary to inter alia the freedom of provision of services in the European Union. Indeed, it was declared that this was the case. 

The ECJ declared that national laws which prohibit the import, sale or use of foreign decoders are contrary to the freedom of provision of services (Par. 125). This restriction cannot be justified neither by the objective of encouraging the public to attend football stadiums nor by an objective of protecting intellectual property rights. This means that consumers all over Europe may now purchase foreign decoding devices and use them instead of their own ones to receive cheaper services. 

It is unclear, however, whether the same would be applicable to owners of restaurants and bars, since then there are certain copyright issues to be taken into account. For example, the ECJ determined that live football games transmissions are not copyright protected in the EU law (Par. 96-99), but such protection applies to transmission of pre-recorded films showing highlights of recent games or the opening video sequence of the programmes, graphics etc (Par. 149). The ECJ also stated that national legislations are allowed to confer protection (also of copyrights) on sporting events (Par. 102-105). 

There are many other issues that might be interesting to consider, e.g. how this judgement relates to broadcasts of programmes other than football games, or whether and how the permission of the party granting licenses is to be given to use a foreign decoder. I invite you to read the judgement to find out more about it.

Online traders' cooperation needed to open the internal market

Another interesting statistics have been made as far as consumers online shopping is concerned (Online shopping: cross-border deliveries found reliable but few traders sell abroad in the EU). Shoppers of 17 European Consumer Centres made a total of 305 online purchases from foreign EU-based traders in 28 countries. The products where then returned in conformity with EU rules on the right of withdrawal. What were the findings? Mainly: 94% of products were delivered (66% in 2003) and only 1% thereof was faulty or different than ordered, which suggests that purchasing products cross-border is as reliable as domestic transactions. When products were returned, in 90% cases the product cost was reimbursed. However, 57% of shopper had problems with reimbursement of original delivery costs. Also, some trader placed extra (illegal) restrictions on returning the goods (e.g. limiting the cooling off period or announcing that there is none). Another upsetting finding was that 60% of the websites was unsuitable for online shoppers from other countries (e.g. delivery abroad was impossible). It seems, therefore, that consumers have more and more reasons to trust in online cross-border transactions. However, the internal market will not develop further if sellers are not willing to conduct their business with customers living in other Member States, as well.

Full report may be found here.

Withdrawal from car insurance after having an accident

The European Commission started an action against Italy for incorrect implementation of the Directive 2002/65/EC concerning the distance marketing of consumer financial services. This Directive applies to situations in which consumers buy a service e.g. from a credit card company, an investment fund, an insurance company etc. over the internet of by telephone etc. Article 6 gives consumers a right to withdraw from such a contract within 14 calendar days of its conclusion. However, Italy has an exception to this right of withdrawal in its law. Namely, when a consumer concludes a car insurance contract he may not withdraw from it if within these 14 initial days an accident covered by the insurance policy has taken place. After having been informed by the European Commission of the non-compliance Italy agreed to adjust this rule, but the time for this has lapsed by now (see: Distance marketing of financial services: Commission refers Italy to the Court of Justice).

Fancy going to a concert or a game? It's safer now to buy tickets online.

One week of holiday where I allowed myself not to check the internet and I now have quite a few news to catch up with and to report here about. 

What caught my attention first was a report on the EU "Sweep" investigation ("sweep" is an enforcement action led by the EU and carried out by national enforcement authorities) conducted as of September 2010 by national authorities of the Member States which checked for breach of EU consumer rules by websites selling tickets for cultural and sporting events (Buying on the internet: it's now safer for consumers to shop for tickets online following EU action). They were looking for websites that would give incomplete or misleading information to consumers (about the price of tickets, e.g. hidden charges or taxes; the trader, e.g. false claim of being an authorised representative; etc.) as well as for unfair terms and conditions (e.g. refund policy not explained or ticket delivery not guaranteed on time). The goal was to prevent sale of tickets to non-existent events, and make clear e.g. rules on the refund in case the event was cancelled. Owners of such websites were asked to correct the information provided (voluntarily or under penalties). The result of the Sweep is that nowadays 88% of websites (out of 414 websites checked) selling tickets comply with EU consumer laws (in comparison to 40% in 2010).

More information about this Sweep and its results may be found on this website: FAQ: Now safer to shop for tickets online following EU Sweep investigation.

Reflections on Europe and private law relationships

Last Wednesday and Thursday, 28 and 29 September, three of the authors of this blog attended (and one gave a presentation at) the highly interesting conference 'The involvement of EU law in private law relationships', organised by Dorota Leczykiewicz and Steve Weatherill (Institute of European and Comparative Law, Oxford).

The conference brought together speakers from many different backgrounds, including (European) private law, constitutional law, consumer law and employment law (see programme). This resulted in a fruitful exchange of views on the extent to which EU law does and should affect relationships between private parties, addressing doctrinal debates (e.g. how to shape the possible horizontal effects of free movement, how to apply principles of EU law to private law relationships, how to reconcile EU competition law with contract law, and how to apply the principle of non-discrimination to employment relations) as well as more legal-theoretical and legal-political questions (e.g. concerning the 'apodictic principles' of civil law emerging in the case law of the Court of Justice of the European Union, and the political stakes of black lists in consumer law). Consumer issues that were discussed included unfair contract terms, the impact of the principle of effectiveness on private law relationships, and the concept of the 'average consumer' in domestic litigation (on which Vanessa's presentation focused).

Main points of reflection resulting from the conference were: the idea of private autonomy in EU private law, the blurring distinction between public and private law (in combination with the distinction of public and private spheres), the place of private law in Europe's constitutional order and the interaction between EU law and domestic systems of (private) law. While not all of these topics may be uncharted territory for those interested in the field of European private law (one speaker remarked that everyone at the conference seemed to be an expert on the Courage v Crehan case), the speakers at the conference shed new light on them by comparing their different views (e.g. reading Courage from a principles-oriented or rather a competition law perspective).