Follow up: RWE v Verbraucherzentrale NRW

Dear readers, 

some of you will remember a post from the spring concerning unfair contract terms in the German energy retail market.
In that decision, the CJEU had laid a set of conditions for the validity of terms allowing long-term providers to unilaterally increase the product or service's price; it had also suggested, we inferred, that the specific term involved in the case under scrutiny was likely to be invalid. Such invalidity, it was submitted, would have easily paved the way for a series of reimbursement requests from some (hundred thousand) RWE customers, who had been subject to a long series of price increases over a not so long timespan.
Today, the Bundesgerichtshof (case Az.: VIII ZR 162/09) awarded the original plaintiffs, 25 consumers supported by the Verbraucherzentrale, restitution rights for a total of 16.128,63 Euro. It is easy to imagine that more requests will be filed in the coming weeks, granting the concerned provider a really heated August.

9th Consumer Conditions Scoreboard

On 23 July the European Commission published recent results of 2013 Consumer Conditions Scoreboard (Consumer Scoreboard: more action needed for a true single market for consumers). Pursuant to the new data 35% of EU citizens declared they were confident buying online from sellers in other EU countries. Unfortunately, still 7 out of 10 EU consumers do not know what to do if they receive products they did not order, and less than a third of traders is familiar with the law provisions with regards to returning defective goods for repair. The observed trend is an actual decrease in consumer trust, which seems to be matched by an increase in the use of redress measures. In the press release you may read about various measures that the Commission thinks about adopting in order to increase consumer protection and their confidence in cross-border transactions. One thing that caught my attention was an announcement of a study on guarantees in selected consumer markets to check compliance of national laws with the EU measures. Another interesting point was a remark on environmental impact of a good on consumers' purchasing decisions - 4 out of 10 consumers take that under consideration, which seems quite a significant number. Consumers who don't take green transactional decisions explain it by not wanting to pay a higher price, not having relevant information on the product or not trusting environmental claims made.

Paying your dues - a new package on Payment Services

On July 24, the European Commission published a new, revised version of the Payment Services Directive as well as a proposal for a Regulation on interchange fees for card-based payment transactions. This package is supposed to update and harmonise the existing Payment Service Directive from 2007. The role of the PSD is to increase competition among payment institutions, thereby offering more payment choices to consumers. Consumers are also supposed to benefit from these measures due to more attention being given to transparency of payment services to consumers (better information on fees, e.g.), as well as enforcement of consumer rights (e.g., refund rights, liability of payment institutions). 

The new PSD2 takes into account certain new types of payment services, such as internet payments where consumers are often enabled to pay instantly for their online shopping without the need to use a credit card (interestingly, still ca 60% of EU population does not possess a credit card - FAQ), but instead paying directly to the online trader through the payer's online banking module, e.g., iDeal in the Netherlands, Sofort in Germany, Trustly in Scandinavia. Such providers would fall under the EU rules upon the adoption of the revision of the PSD.

The mentioned Regulation would also contribute to better consumer protection by taking away a possibility of the traders to surcharge consumers for using their payment cards.The interchange fee levels will be capped at 0.2% and 0.3% for debit and credit cards which is below the level of interchange fees in most Member States currently. This cap could result also in lowered retail prices. (New rules on Payment Services for the benefit of consumers and retailers)

Additionally, the new rules would strengthen consumer protection against fraud by capping the maximum amount of payment that consumers could be obliged to pay in case of an unauthorised payment from 150 to 50 Euro. Consumers would also be granted an unconditional refund right, even when a payment would be under dispute, unless the trader had already fulfilled his contractual obligations and the goods have been consumed.

The European Commission advises readers to keep apart the previously discussed proposal for a Directive on Payment Accounts from the PSD2 (Proposal for a new Directive on Payment Accounts). While the PSD2 targets fee transparency, aiming at consumers' awareness of full terms and conditions linked to payment services (e.g., possibilities of refund, execution of payment), Payment Accounts Directive focuses on core services linked to a payment account, e.g., the annual fee for a debit or credit card, but also separate aspects of payments services and fees. Honestly, to me the difference does not sound that obvious and I wonder why are these two instruments kept separate.

The proposal will now have to be accepted by the Parliament and by the Council.

Sponsored publications as unfair commercial practices - AG Wathelet in C-391/12 (RLvS)

11 July 2013: opinion Advocate General Wathelet in case C-391/12 (RLvS)

RLvS publishes daily various advertisements in a journal called GOOD NEWS. In June 2009 it published two sponsored articles. Both these articles made a distinction between the 'news' part and the 'advertisement' part thereof. In the 'news' part it was mentioned that the articles were sponsored and the 'advertisement' part was marked with the word 'advertisement'. However, German press law has more strict requirements that need to be fulfilled in case the publication is sponsored (Art. 10 LPresseG). Namely, any sponsored publication is prohibited regardless its aim, as long as it is not clearly marked as an 'advertisement', unless the position and the form of the publication leave no doubt as to its advertising purpose. The purpose of this provision is to protect consumers from misleading commercial practices and to protect independent press. The competitor of RLvS, a German newspublisher - Stuttgarter Wochenblatt - claimed that RLvS infringed provisions of German press law. The Bundesgerichtshof had, however, doubts as to whether the Art. 10 of the German press law is compatible with the Unfair Commercial Practices Directive - by establishing such a general prohibition of sponsored publications - and asked the CJEU for its opinion on this matter.

AG Wathelet advises the CJEU to recognize the incompatibility of Art. 10 LPresseG with the Unfair Commercial Practices Directive. As long as a sponsored publication could be considered to constitute an unfair commercial practice in the meaning of Art. 5 Directive, there cannot be a legal requirement for the publishers to mark clearly such a publication as an 'advertisement', unless the presentation or concept of that publication clearly denotes such an advertising purpose of this publication already.

Par. 11 of the Annex I to the Unfair Commercial Practices Directive clearly blacklists a following commercial practice: "Using editorial content in the media to promote a product where a trader has paid for the promotion without making that clear in the content or by images or sounds clearly identifiable by the consumer (advertorial)." The German press law goes further than these requirements by obliging the publishers to add a word 'advertisement' to the publication. (Par. 39-40) Due to the maximum harmonisation character of the Directive, national legislators were not allowed to make more restrictive provisions than the ones adopted by the EU. (Par. 38) By modifying the provisions of Par. 11 of the Annex I the German legislator changed blacklisted commercial practices in Germany, which it was not allowed to do. (Par. 43)

It needs to be mentioned that while Art. 10 LPresseG regulates any publication, irrespective of its commercial purpose, the Directive regulates only such activities that have a commercial purpose. (Par. 27, Par. 35) For this reason the Directive may not be applicable to many cases regulated by Art. 10 LPresseG where the purpose of the publication won't be to convince consumers to conclude a particular commercial transaction, but, e.g., it would be a publication sponsored by a political party. (Par. 37) The evaluation whether a given publication has a commercial purpose should be conducted on a case-by-case basis by a national court.

Functional concept of a 'trader' - AG Bot in case C-59/12 (BKK Mobil Oil)

4 July 2013: opinion of Advocate General Bot in case C-59/12 (BKK Mobil Oil)

Due to the holiday period we might have missed a case or two to report to you, dear readers, in the past month. And so on the 4th of July Advocate General Bot gave an opinion in the case BKK Mobil Oil which concerned interpretation of the term 'trader' used in art. 3(1) and art. 2(d) of the Unfair Commercial Practices Directive. The CJEU was asked whether if a public law entity circulates misleading advertising this could be seen as an unfair commercial practice carried out by a trader.

BKK Mobil Oil is a public law entity entrusted with a task of general public importance, namely it is a German sickness insurance fund. In December 2008 this insurance fund circulated an advertisement worded as follows: "Anyone leaving BKK … now will be committed to staying with his/her new [mandatory sickness] scheme for the next 18 months. This means that you will miss out on attractive offers that BKK … will be making next year, and you may end up having to pay more if your new scheme is unable to manage on the money allocated to it and therefore requires you to make a supplementary contribution." (Par. 14) The German Office for the Protection of Unfair Competition claimed that this was a misleading advertising and demanded withdrawal thereof. BKK Mobil Oil did not think it needs to apply provisions of the Unfair Commercial Practices Directive since it is a public law body, not acting for profit, and therefore should not be considered a 'trader'.

Advocate General Bot advises the CJEU to adopt a broad interpretation of the definition of a 'trader', encompassing also bodies governed by public law entrusted with a task of general public importance, such as a sickness insurance fund, as long as they circulate commercial advertising to consumers. (Par. 5)

AG Bot reminds the previous case law of the CJEU in the competition law matters where it was decided that an undertaking should be defined as such when it conducts an economic activity of an industrial or commercial nature consisting of offering goods and services on a given market, regardless of the legal status and the way in which that undertaking is financed. (Par. 25-27) A sickness insurance fund could be excluded from this definition with regards to tasks it performed purely to achieve its social objectives. However, if such an entity conducted various activities, not only of an administrative but also of a commercial nature, a distinction should be made between them. (Par. 29) 

The concept of a 'trader' in consumer law has according to the AG Bot the same functional characteristics as the concept of an 'undertaking' in competition law. (Par. 32) The broad scope of the trader's definition should rely only on the fact that such a body conducts a commercial activity. (Par. 35) Therefore, it should be irrelevant what is the legal status of a trader and what tasks have been entrusted to him. (Par. 39) One of the supporting arguments for this statement is the definition of a trader in the new Consumer Rights Directive which explicitly states that a trader is 'any natural person or any legal person, irrespective of whether privately or publicly owned (...)'. (Par. 41)

Interesting side note: AG Bot notices that the concept of a 'trader' has no uniform meaning in various EU consumer legislation and argues for the adoption of a harmonised meaning of this term since there does not seem to be a justification for any differences therein. (Par. 23)

Summer reading

One final question on the holiday checklist could be what to read during the holidays. If you are looking for some recent literature in the field of European consumer and contract law you may be interested in a new working paper by Daniela Caruso on the EU's social justice agenda ('Qu'ils mangent des contrats: Rethinking justice in EU contract law'). The abstract reads as follows:

'The concern for justice in the context of EU contract law was central to a scholarly initiative that led, in 2004, to the publication of a Social Justice Manifesto. The Manifesto had the explicit goal of steering the Commission’s harmonization agenda away from purely neoliberal goals and towards a socially conscious law of private exchange. Contract law would be designed at the EU level so as to become (or remain, depending on the baseline of each member state) palatable to weaker parties. Today, in the many parts of Europe devastated by rising poverty, dire unemployment rates, and collapsing social safety nets, the Manifesto needs to be revised. When the very access to the market place is foreclosed by indigence and marginalization, the promise of contracts that would be sweet toward the vulnerable has the flavour of Marie Antoinette’s brioche. This essay revisits the situational premises of the Manifesto, acknowledges its accomplishments, identifies its limits, and outlines possibilities for its renewal, both within its original framework and beyond.'

And if you like to keep up with what inspires members of the European Parliament, their book choices can be found here (from this list, I would especially recommend Verhofstadt's suggestion).

Holiday checklist

European travellers, and perhaps also students of EU law who are finalising their Master theses during the Summer months, might be interested in learning that the European Commission just published a helpful, comprehensive overview of EU measures aimed at assisting travellers. Topics include the loss of documents; problems with airlines, car rental companies and tour operators; travelling with pets; health insurance; keeping telephone costs to a minimum; timeshare; and dealing with problems while shopping abroad.

For more information, see also the EU's Travel pages.

To see the Summer sky

At the end of last week, European consumer organisation BEUC published a position paper on the revision of EU Regulation 261/04 on the rights of air passengers in the event of denied boarding, cancellation and long delays (on which we reported earlier, '101 on air passengers' rights proposal').

BEUC welcomes the proposal for review of the Regulation, in particular insofar as it presents an opportunity to bring the rules on air travel in compliance with the high level of protection developed in the case law of the Court of Justice of the EU. While giving a generally favourable opinion on the proposal, BEUC observes that the suggestions for revision nevertheless reduce the consumer protection established by the CJEU on the following points:

‘- The right to compensation for long delays is weakened and deviates from the rulings of the European Court of Justice which granted passengers the right to financial compensation for delays of 3 hours or more;

- The proposal reduces the currently unlimited right to assistance in extraordinary circumstances by limiting it to the provision of accommodation to 3 nights and 100 Euros per night.’

Moreover, the proposal does not deal with certain other issues that are of importance to air passengers in Europe. BEUC suggests that the proposal should include the following elements:

‘- A full ban of the “no-show” clause;

- The right to re-routing by other means of transport should be granted as soon as possible (the 12 hours timescale should be deleted);

- The right to re-routing should also be granted to passengers who suffer a long delay;

- A presumption that technical problems are not an “extraordinary circumstance”, should be introduced;

- Pre-announced strikes and labour disputes should not be considered “extraordinary circumstances”;

- Weather conditions which have been foreseen and predicted should not be considered “extraordinary circumstances” as a matter of course;

- The prices of air tickets advertised by airlines should be obliged to include the following minimum services: checking-in, provision of boarding pass and 1 item of checked luggage;

- Aside from one item of hand luggage, passengers should have the right to carry their essential items and the airport retail purchases.

- The right to correct spelling mistakes should be extended to booking mistakes of day and time;

- Passengers should have the right to transfer their tickets to another person in case they are prevented from travelling;

- Airlines should be obliged to regularly report on the quality of their services (e.g. on delays and cancellation rates);

- The right of passengers to file complaints with airlines should not be subject to time limits;

- Airlines should be obliged to adhere to Alternative dispute resolution (ADR) or on line dispute resolution (ODR) schemes;

- Airlines should be obliged to have a representative in each airport where they operate;

- Airlines should be easily accessible for consumers by providing passengers with inexpensive telephone contacts and e-mails addresses;

- When baggage is delayed or lost, airlines should be obliged to compensate passengers for each day of delay. Once found the airlines should be obliged to transport it to the consumer;

- The scope of the Regulation should be extended to non-EU carriers arriving in the European Union (and European Economic Area);

- A mandatory guarantee that airlines reimburse and repatriate passengers in instances of insolvency should be introduced.’

On healthy diets - CJEU judgment in Case C-299/12 Green Swan

Finally, the Court of Justice delivered another judgment concerning the ethics of advertising and marketing (it makes one wonder what the Court would make of Don Draper's anti-tobacco ad). 

In Green Swan, the CJEU considered the law that is applicable to health claims made on the packaging of food. The case concerned a food supplement marketed in the Czech Republic with a statement on its packaging saying that '[t]he preparation also contains calcium and vitamin D3, which help to reduce a risk factor in the development of osteoporosis and fractures'. The Czech Supreme Administrative Court that had to decide upon the admissibility of this claim asked the CJEU to establish to what extent the statement was governed by EU law restricting the use of nutrition and health claims for marketing goods.

The Court holds that for a health claim to be covered by the EU Regulation on nutrition and health claims on food, the claim 'need not necessarily expressly state that the consumption of a category of food, a food or one of its constituents "significantly" reduces a risk factor in the development of a human disease'. According to the CJEU, 'it is sufficient that that claim may give the average consumer who is reasonably well informed and reasonably observant and circumspect the impression that the reduction of a risk factor is significant' (para. 24).

Furthermore, Green-Swan Pharmaceuticals had argued that its food supplement fell outside of the restrictions imposed by EU law, to the extent that Article 28 of the Regulation stated that ‘[p]roducts bearing trade marks or brand names existing before 1 January 2005 which do not comply with this Regulation may continue to be marketed until 19 January 2022 after which time the provisions of this Regulation shall apply.’ On this point, the Court rules that the Regulation 'must be interpreted as meaning that a commercial communication appearing on the packaging of a food may constitute a trade mark or brand name, within the meaning of that provision, provided that it is protected, as a mark or as a name, by the applicable legislation'. The national court should ascertain to what extent such a communication is indeed protected as a trade mark or brand under national law.

No combination of car and insurance in advertising - CJEU judgment in Case C-256/12 Citroën Belux

In another case in which the CJEU ruled today, Citroën Belux BV, the scope of EU law concerning unfair commercial practices was at stake. The case concerned an advertising campaign by Citroën in Belgium, in which under the slogan 'je veux tous' ('I want everything') consumers were offered a '6 months free comprehensive insurance' when buying a Citroën car. The Belgian Federation of Insurance and Financial Agents challenged this campaign, arguing that the advertisement constituted a combined offer that was contrary to Belgian law on financial services. The Court of Appeal in Brussels handling the case referred a preliminary question to the CJEU regarding the compliance of Belgian law with EU consumer law.

The Court holds that the Unfair Commercial Practices Directive and Article 56 of the Treaty on the Functioning of the EU must be interpreted 'as not precluding a national provision, such as that at issue in the main proceedings, which lays down a general prohibition – save in the cases exhaustively listed by the national legislation – of combined offers made to consumers where at least one of the components of those offers is a financial service'.

The shop around the corner - CJEU judgment in Case C-315/12 Metro Cash & Carry

Today, the Court of Justice of the EU delivered several judgments relating to consumer goods. A first one, Metro Cash & Carry, concerns the cross-border sale of alcoholic beverages to Swedish consumers in a Danish supermarket. Since Danish excise duties on spirits are considerably lower than Swedish ones, and consumers are not subject to Swedish duties when acquiring products in Denmark, there is a strong incentive for Swedish consumers to buy these alcoholic drinks in the Danish shop and import them into their home country. The CJEU was presented with the question of whether this practice is in compliance with EU law.

The Court holds that the relevant measures of EU law must be interpreted as meaning that a trader 'is not required to check whether purchasers from other Member States intend to import products subject to excise duty into another Member State and, where relevant, whether such importation is for private or commercial use'.

Who pays the bill for private copies? - CJEU judgment in Case C-521/11 Amazon v Austro-Mechana

Last Thursday, 11 July 2013, the Court of Justice of the EU handed down its judgment in Case C-521/11 Amazon v Austro-Mechana. The case concerned the 'fair compensation' to be paid to authors of copyrighted works (such as music, books and films) through a private copying levy on the first sale of recording media such as blank CDs and DVDs. For a summary of the case and of the Opinion of A-G Mengozzi, I refer to an earlier post on this blog ('Fair compensation for copying').

The CJEU holds that the indiscriminate collection of a private copying levy on the first sale of recording media may, under conditions, be compatible with EU law. Accordingly:

'34 It is for the national court to verify, in the light of the particular circumstances of each national system and the limits imposed by Directive 2001/29, whether the practical difficulties justify such a system of financing fair compensation and, if so, whether the right to reimbursement of any levies paid in cases other than that under Article 5(2)(b) of Directive 2001/29 is effective and does not make repayment of those levies excessively difficult.

35 In the present case, the referring court must verify, first of all, whether the indiscriminate application of a private copying levy on the placing on the market, for commercial purposes and for consideration, of recording media suitable for reproduction is warranted by sufficient practical difficulties in all cases. In that context, account must be taken of the scope, the effectiveness, the availability, the publicisation and the simplicity of use of the a priori exemption mentioned by Austro-Mechana in its written observations and at the hearing.

36 Secondly, the referring court must also verify that the scope, the effectiveness, the availability, the publicisation and the simplicity of use of the right to reimbursement allow the correction of any imbalances created by the system in order to respond to the practical difficulties observed.'

See also the Court's press release regarding this case. For a summary and comment on another recent CJEU judgment on private copying levies, i.e. Joined Cases C-457/11 to C-460/11, VG Wort v Kyocera, please consult the blog of our colleagues at the Amsterdam Centre for European Law and Governance.

Package travel 2.0

Today, the European Commission presented its long-awaited proposal for the review of the Package Travel Directive (on which we posted earlier, e.g.: More than words?). The modernisation of the rules on package travel is meant to make the lives of travellers easier, to the extent that it accommodates the needs of the many consumers who nowadays arrange their own packages of flights, hotels and car rentals online.

The Commission's press release nicely sums up the proposed amendments to the Package Travel Directive:

'For buyers of traditional and customised packages, today’s proposal will bring:

1. stricter controls on price surcharges (with a 10% cap on price increases) and a requirement to pass on price reductions in equivalent circumstances
2. improved cancellation rights: Consumers will enjoy more flexibility by being able to terminate the contract before leaving home and paying the organiser a reasonable compensation. They will also be able to cancel the contract, free of charge, before departure in the event of natural disasters, civil unrest, or similar serious situations at the destination that would affect the holiday, when, e.g. the embassies give negative travel advices.
3. better information on liability: in a plain and intelligible language consumers will need to be informed that the organiser is responsible for the proper performance of all included services – whereas today diverging national rules concerning the responsible party (organiser, retailer or both) lead to a situation where organisers and retailers refer the consumer to the other party, neither of them taking responsibility.
4. better redress: in addition to price reductions in case a travel service has not been performed as it should have been, consumers can also claim compensation for any 'immaterial damage' suffered, in particular in case of a spoilt holiday
5. a single contact point if something goes wrong: Consumers will be able to address complaints or claims directly to the retailer (travel agent) from whom they bought their holiday.

For buyers of other customised travel arrangements, today's proposal entails:

1. a right to get their money back and be repatriated, if needed, in case the seller, the carrier or any other relevant service provider goes bankrupt while they are on holiday,
2. better information about who is liable for the performance of each service.

For businesses today's proposal will cut red tape and compliance costs by:

1. creating a level playing field between different operators,
2. abolishing outdated requirements to reprint brochures, thereby saving tour operators and travel agents an estimated €390 million per year,
3. excluding managed business travel from the Directive, which is expected to lead to savings of up to € 76 million per year,
4. providing EU-wide rules on information, liability and mutual recognition of national insolvency protection schemes, thus facilitating cross-border trade.'

See also the FAQ and the text presented at DG Justice's press conference on the topic.

EP in the clouds

On 25 June, the Legal Affairs Committee of the European Parliament published a draft opinion on the European Commission's Communication 'Unleashing the Potential of Cloud Computing in Europe'. The Committee's suggestions are summarised as follows:

'The Committee on Legal Affairs calls on the Committee on Industry, Research and Energy, as the committee responsible, to incorporate the following suggestions in its motion for a resolution:

1. Urges the Commission to take action to further harmonise laws across the Member States in order to avoid jurisdictional confusion and fragmentation and to improve the transparency of the digital single market;

2. Calls on the Commission to review other EU legislation to address gaps related to cloud computing; calls, in particular, for the revision of the intellectual property rights regime, the Unfair Commercial Practices Directive, the Unfair Contract Terms Directive and the E-Commerce Directive, which are the most relevant pieces of EU legislation that apply to cloud computing;

3. Calls on the Commission to establish a clear legal framework in the field of copyright content in the cloud, especially with regard to licensing regulations;

4. Stresses that, owing to uncertainties regarding applicable law and jurisdiction, contracts are the main tools for establishing relations between cloud providers and their customers, and that there is therefore a clear need for common European guidelines in that field;

5. Calls on the Commission to work together with the Member States to develop European best practice models for contracts, or ‘model contracts’, that will ensure complete transparency by providing all terms and conditions in a very clear format;

6. Calls on the Commission to develop, together with stakeholders, voluntary certification schemes for provider security systems which would help to harmonise practices across cloud providers and which would make clients more aware of what they should expect from cloud service providers;

7. Stresses that, owing to jurisdiction problems, European consumers are in practice unlikely to be able to seek redress from cloud services providers in other jurisdictions; calls therefore, on the Commission to provide adequate means for redress in the consumer services area, since there is a strong imbalance of power between consumers and providers of cloud computing;

8. Calls on the Commission to ensure a speedy implementation of Alternative Dispute Resolution and Online Dispute Resolution and to make sure that consumers are equipped with adequate means of collective redress against security and privacy breaches as well as against illegal contract provisions for cloud services.'

The value and price of privacy

Privacy and data protection are hot topics, especially in light of the development of the digital economy and the increasing use of cloud services. At the occasion of a recent meeting of the European Cloud Partnership Board, Commissioner Neelie Kroes observed that in this 'age of total information', the successful use of the cloud depends on 1) efficiency through scale and 2) trust that the data is stored securely.

In relation to the pending CJEU case of Google Spain (on which a post appeared on this blog last Tuesday), an interesting suggestion made by the Commissioner concerns the role of digital service providers in safeguarding privacy. While Advocate General Jääskinen's opinion in the Google case underlines the fact that it is still a topic of debate to what extent private actors are and should be responsible for the protection of privacy (in particular the 'right to be forgotten'), Kroes remarks that privacy protection can also offer service providers a competitive advantage. Cloud providers who (contractually) guarantee the safe storage of data may be more successful in attracting customers than those who cannot provide such terms of use. As such, private actors may perform a complementary role to public institutions in regard to the protection of fundamental rights.

No contract until goods are dispatched

As I have previously mentioned most co-authors of this blog are enjoying the 2013 conference of the International Association of Consumer Law in Sydney. We have already listened to many interesting presentations and luckily more are still ahead! From the sessions I've attended so far, the one on digital marketplace had the most lively discussion. Many important issues have been raised, but I wanted to mention here one of the presentations that showed that EU law may at times create adverse effects for EU consumers, even when it's trying to protect them.

 

Trish O'Sullivan from New Zealand discussed the problem of 'contract on dispatch' terms in English law. Apparently, many English service providers (among others: Amazon UK, Sainsbury's UK, Tesco UK, Marks & Spencer UK) have added a clause to their standard contract terms and conditions pursuant to which a contract is not seen as concluded until the goods have been dispatched to consumers. How could this possibly harm consumers? Well, if a consumer purchases goods online, pays for them and they fail to be delivered, he normally could rely on contractual remedies. This clause, however, seems to preclude this by allowing a service provider to defend himself from any contractual remedies claimed by the consumer by arguing that no contract was concluded. Of course, there are ways in which to deflect such a service provider's claim, e.g., consumer could use estoppel or unfair contract terms argument. Still, a surprising aspect is that this clause could have been added to standard contract terms and conditions as a result of the implementation of Art. 10 of E-commerce Directive that required online service providers to inform consumers upon completion of what technical steps a contract was concluded. Of course, what was meant by this provision was that the consumer should know whether by clicking 'accept' or 'buy' button on any website he has already purchased a good or has only made an offer to buy a good (that then had to be accepted by the service provider). Instead, it seems that some online service providers decided to give a different, less consumer-friendly meaning to this provision.

No forgetting - Opinion of AG Jääskinen in case C-131/12 Google Spain

While the internet makes possible the fast distribution of information (which, for instance, allows me to trace my co-authors' steps in Australia through their posts on this blog), it also makes people vulnerable to infringements of their privacy in case too much information is or remains available online. Since the word 'google' became a verb, cases in which a request is made to have certain data removed from websites have arisen with increasing frequency. A recent example is that of Google Spain v the Spanish Agency for Data Protection (AEPD) and Mario Costeja González, in which a number of questions have been referred to the Court of Justice of the EU for a preliminary ruling. Last week, Advocate General Jääskinen handed down his Opinion in this case.

The case concerned references to a Spanish newspaper article about a person having been involved in a real-estate auction because of his social security debts. Arguing that these proceedings had ended years earlier and were no longer of relevance, this person requested Google to make sure that no references to the newspaper article would appear when his name and surnames were entered in the Google search engine. The Director of the Spanish Data Protection Agency upheld his claim against Google Spain and Google Inc., requiring the search engine service providers to take the necessary measures to withdraw the data from their index and prevent further access to these data. Both Google and Google Inc. appealed against this decision. The Spanish National High Court hearing their case referred a number of questions to the CJEU concerning the application of EU data protection law.

AG Jääskinen considers that search engine service providers are not responsible, on the basis of the Data Protection Directive, for personal data appearing on web pages they process. An important reason for this is that the Directive should not be considered to establish a general 'right to be forgotten'. In Jääskinen's opinion, such a right cannot be invoked against search engine providers on the basis of the Data Protection Directive, even when the Directive is interpreted in accordance with the Charter of Fundamental Rights of the EU. In other words, the AG seeks to discourage the CJEU from establishing a 'horizontal effect' of the right to be forgotten, that is: its application to the relationship between the search engine service provider and individuals whose data show up in searches. His opinion seems to be based, in particular, on the fact that the publisher's right to freedom of expression deserves protection as well, and that the task of striking a balance between privacy protection and freedom of expression should not be assigned to search engine service providers on a case-by-case basis. Rather, Member States should provide effective remedies against the infringement of privacy by web publishers.

See the press release for a brief summary of the AG's opinion.

Mobile deals

As of 1 July 2013, the beginning of a new holiday season, EU roaming charges have again been lowered. (see our post from last year: Holiday savings) The main price change concerns tariffs for data downloads (using maps, social networks, uploading photos etc. on consumer smartphones), which will be lowered by 36%. (New lower price caps for mobile roaming...) The new price caps will be set as follows:

- 24 cents/ minute + VAT for making calls

- 7 cents/ minute + VAT for receiving calls

- 8 cents + VAT for sending a text message

- 45 cents/ Megabyte + VAT for downloading data or browsing the internet

 

The only thing EU consumers should still be wary of and pay attention to are these package deals that are being offered by mobile service providers, where you pay a specific amount of money for making use of your phone while abroad. The rates offered in these packages may be less beneficial now in comparison with official price caps.

 

Are KIDs going to be relevant when they are finally adopted?

The summer holiday season has not yet started for the EU institutions (even if it might have begun for some of the authors of this blog). Last week the European Council reached an agreement on the new rules that would protect consumers when they enter into PRIP contracts - for packaged retail investment products (such as, for example, investment funds, life insurance policies). The EU institutions want to increase the transparency of such contracts, in order to strengthen consumer trust in the financial market. It only took 1 year for the European Council to agree on the rules proposed by the European Commission. (see our earlier post: Investing consumers should be treated...) Since this type of financial contracts is often quite complex in its drafting, consumers are often unable to understand what they are agreeing to when they conclude such a contract. Not only would they then have difficulties in assessing the contractual risks but also they may not be able to effectively compare offers of different companies, when trying to choose the best one for them. New rules would require certain key information (such as the nature and features of the product, costs and risks profile, performance information, whether it is possible to lose capital) to be given to consumers in a specific, uniform format and content. In order not to overburden consumers, only such key information would be contained in these documents (KIDs). Additionally, Member States would need to guarantee an effective right of redress to consumers. The legislative process on these rules will continue in the European Parliament now. (Council sets out its position on transparency rules for investment products)

 

Coincidentally, most of the authors of this blog have just listened to a presentation on the risks of financial services by Sothi Rachagan, president of the International Association of Consumer Law, given as an opening speech of the Association's bi-annual conference, in Sydney. One of the points that was raised in the presentation was that regardless the measures that we would take to inform or educate consumers about the risks of financial products, consumers would still not be able to protect themselves from them. The complicity of financial products and information on them (even if simplified) is just too overwhelming even for the well educated consumers. It was suggested that instead of further regulating mandated disclosure, other regulatory measures should be taken in order to protect consumers (e.g., limits could be set on the amounts that could be invested/ borrowed by consumers depending on their financial situation). The readers may wonder whether by the time KIDs are adopted in Europe, they would be seen as a pre-historic measure of consumer protection.