Pingback: first fines for cookie rules violation in Spain!

As reported by the Privacy Law Blog, the first known fines since the implementation of the new cookie rules in Europe have been issued. We refer our readers to that interesting post for further information...

Taking data protection seriously

Following up on yesterday's post, today's news brings the idea of a Data Protection Compact for Europe. At the occasion of Data Protection Day 2014, EU Commissioner Viviane Reding called for a Compact based on the following eight principles:

1 "We need the Data Protection Reform in the statute book. I wish to see full speed on data protection in 2014."

2 "The reform should not distinguish between the private and the public sector. Citizens would simply not understand a split in times when the public sector collects, collates and sometimes even sells personal data. It is also a very difficult distinction to draw when a local authority can buy storage space on a private cloud."

3 "Laws setting out data protection rules or affecting privacy require public debate because they relate to civil liberties online."

4 "Data collection should be targeted and limited to what is proportionate to the objectives that have been set. Blanket surveillance of electronic communications data is not acceptable."

5 "Laws need to be clear and laws need to be kept up to date. It cannot be that States rely on outdated rules, drafted in a different technological age, to frame modern surveillance programmes."

6  "National security should be invoked sparingly. It should be the exception, rather than the rule."

7 "Without a role for judicial authorities, there can be no real oversight. Executive oversight is good. Parliamentary oversight is necessary. Judicial oversight is key."

8 "A message to our American friends. Data Protection rules should apply irrespective of the nationality of the person concerned. Applying different standards to nationals and non-nationals makes no sense in view of the open nature of the internet."

The full text of Reding's speech is available here.

Data protection reform full speed ahead

On the eve of this year's Data Protection Day, the European Commission takes stock of the progress of the reform of the EU's legal framework for data protection that was set in motion two years ago (see our post 'EU data protection reform announced'). In a comprehensive press release, the Commission sets out the time frame for adoption of the proposed Data Protection Regulation and Directive (a possible agreement before the end of 2014); benefits for citizens, businesses and SMEs; the reform's foreseen impact on the Internal Market and on scientific research; and the meaning of the right to be forgotten. Furthermore, the Commission pays attention to the EU's response to allegations of surveillance of EU citizens by US intelligence agencies.

Vice-president Viviane Reding, who will give a speech at the Centre for European Policy Studies tomorrow, adds:

'Data protection in the European Union is a fundamental right. Europe already has the highest level of data protection in the world. With the EU data protection reform which was proposed exactly two years ago – in January 2012 – Europe has the chance to make these rules a global gold standard. These rules will benefit citizens who want to be able to trust online services, and the small and medium sized businesses looking at a single market of more than 500 million consumers as an untapped opportunity. The European Parliament has led the way by voting overwhelmingly in favour of these rules. I wish to see full speed on data protection in 2014.'

See also DG Justice's Data Protection website.

The image(s) of the 'consumer' in EU law - Oxford conference 27-28 March

This semester, I got the opportunity to do some teaching in the UK. The English legal system offers many interesting topics of study, especially when coming from a civil law background. For those of you who might sometimes feel a bit lost when studying the many different legal conceptions of 'the consumer' in the EU, the following conference (which will take place in Oxford on 27 and 28 March) may offer a nice possibility to explore these differences:

'The Image(s) of the ‘Consumer’ in EU Law:  Legislation, Free Movement and Competition Law

Organisers: Professor Stephen Weatherill & Dr Dorota Leczykiewicz

The purpose of the conference is to discuss the concepts of ‘consumer welfare’, ‘consumer protection’ and ‘consumer interest’ in different contexts of EU law: legislation, free movement and competition law. The theme of the conference is inspired by the persisting questions about how many visions of the consumer there are in EU law, and whether they are consistent and sincere, or merely instrumental to the achievement of other goals. We are all ‘consumers’ and we are all different: are the different types of ‘consumer’ we find scattered across EU law (empowered, confident, alert, information-seeking, victim of unfairness, vulnerable) apt reflection of rich diversity or do they create a troublingly chaotic landscape? Discussing these questions seems particularly timely a few years after the Treaty of Lisbon, which reformed Union objectives to include a ‘social market economy’, and the Charter which elevated ‘consumer protection’ to the status of a fundamental right. Our aim is to encourage discussion of the consumer-related considerations in different contexts of EU law – both where the EU sets the rules and where EU law checks the validity of public and private practices at national level - and encourage reflection on whether there are and whether there should be common assumptions, principles and trends running through different parts of EU law. The ambition is to explore the image or images of the ‘consumer’ as a bridging concept which connects the distinct strands of analysis in EU law, and against whose background shared approaches, but also mutual planned or unplanned incoherencies, could be assessed.

Conference papers will consider how consumers are implicated in the decision as to whether the EU has a competence to legislate under Article 114 TFEU, in particular in connection with the constitutional limits which the Court of Justice imposes on the use of this competence conferring provision, and how the consumer interest is interpreted in existing legislation, as well as how it has been defined in recent preparatory documents and in the Commission’s policy statements. While the Commission focuses mainly on ‘empowering’ consumers through free movement law and through EU legislative intervention the contributors will be encouraged to discuss how to incorporate other goals beyond ‘empowerment’ within EU consumer policy. Other papers will look at the extent to which the consumer interest is the rationale behind EU free movement law, and how consumer preferences and habits are broken down by EU law’s insistence on ensuring access of foreign products and services to markets of the Member States, as well as at the use by the Court of Justice of the EU of the consumer protection justification in the context of Articles 34 and 56 TFEU. Papers on EU competition law will undoubtedly focus on the 2004 Commission Guidelines on the application of Article 101 TFEU, where protection of competition has been expressed as ‘a means of enhancing consumer welfare’. We also wish to approach the question of consumer protection from a private law perspective and, hopefully, explore the potential role of consumer interest in the creation of common European contract law.'

More information is available on the website of the University of Oxford.

To the lighthouse

Would you know exactly how much you spend on energy (gas and electricity) and if there are any more convenient offers available? European consumer organisation BEUC observes that the energy market is still very intransparent to a large group of consumers in Europe. In a position paper that was published this week, BEUC highlights the following action points for legislators and enforcement authorities:

'- Access to energy is not guaranteed to all EU consumers. As for electricity, gas should also be part of the universal service concept and Member States should ensure that there are effective procedures in place to minimise the risks of disconnection. 

- Consumers should receive objective and reliable information on the offers available in the market and have the possibility to compare such offers through independent comparison tools. 

- The terms and conditions governing the contractual relationship between consumers and providers should be transparent and fair. This includes adopting specific measures to help consumers understand complex contracts, for example via a standardised summary of the contract.

- Consumers should also be protected against misleading and aggressive marketing practices, in particular in off-premises contracts. Effective enforcement of the Unfair Commercial Practices Directive and the Consumer Rights Directive is urgently needed. 

- The single point of contact and consumer checklist established by the Third Energy Package should help consumers to access information about their rights in the energy market. However, effective scrutiny is necessary to assess how consumer can best use them. 

- Consumers should be able to assess and, where appropriate, change their consumption patterns. To do so, access to understandable consumption information and clear information on bills is essential. Additionally, the effective implementation of the Energy Efficiency Directive will also help consumers to manage their consumption while reducing costs.

- Switching should be easier and faster for consumers. Specific measures at national and EU level need to be implemented in order to help consumers change suppliers if they wish to do so (e.g. on switching period and renewal or termination of contracts).

- Finally, better enforcement by national authorities and consumers’ access to effective means of redress in case of disputes between consumers and service providers is essential to build trust in the energy sector.'

A resounding NO to genetically modified food in the EU

In their resolution yesterday the Members of the European Parliament argued that the European Council and the European Commission should not propose or renew authorisations for any GMO until risk assessment methods have been improved (MEPs oppose authorising new genetically modified maize). In this case the issue arose with regards to GM maize 'Pioneer 1507'. The MEPs considered the fact that its insect-resistant pollen may harm non-target butterflies and moths and claim that the Commission did not specify any 'conditions for protection of particular ecosystems/environments and/or geographical areas' as the legislation requires for introducing new GMOs. (No to GMO: "We are clearly lacking evidence on the safety of this new strain") While it may be true that this particular GMO could endanger our butterflies and moths, it does not change the fact that the EU so far finds reasons to refuse authorisation to almost all GMOs.

Manufacturer's jurisdiction in product liability cases - CJEU judgment in Kainz (C-45/13)

16 January 2014: CJEU judgment in Kainz (C-45/13)

Mr Kainz, resident of Salzburg (Austria), bought a bicycle from a company Funbike, established in Austria, but the bike was manufactured by a German company Pantherwerke. While he was riding that bike in Germany he fell and injured himself. The bike turned out to be defective and based on the product liability rules Mr Kainz claimed compensation of more than 21.000 Euro from the manufacturer - Pantherwerke. The parties differed as to their opinion on which courts should have jurisdiction over this claim - pursuant to the Regulation No 44/2001 it should be the place of the harmful event - Austrian (bicycle was made available to the end user there) or German (where product was manufactured and where to the product was dispatched). Obviously, the consumer had an interest in claiming Austrian jurisdiction while the company wanted to defend themselves in Germany.

The CJEU needed to answer a question what should be considered as a place of the event giving rise to the damage in the product liability cases. The CJEU reminds that the main principle of the Regulation is to provide the defendant with an opportunity to protect himself in the courts of his country of domicile (Art. 2). (Par. 21) Special jurisdiction rules of Art. 5 should be interpreted restrictively. (Par. 22) However, in tort liability cases the Regulation gives a possibility to a claimant to choose to sue either in the courts of a country where the the damage occurred or where the place of the event giving rise to it was. (Par. 23) The CJEU determiners in this case that in principle in product liability cases the place where the event which damaged the product itself occurred is the place where the defective product was manufactured. (Par. 26) In this respect, Art. 5(3) of the Regulation does not intend to give special protection to the weaker party by allowing it to claim in courts of his own domicile (Par. 31), but rather to protect the legal certainty (Par. 28). 

As a result of this judgment two out of three possibilities will always point out to the jurisdiction of the courts of the manufacturer's domicile. Unless the damage occurred in the consumer's country of domicile, which in this case did not take place, the consumer has to sue in a foreign court for his damages.

Testing significant imbalance in unfair contract terms - CJEU in Constructora Principado C-226/12

16 January 2014: CJEU judgment in Constructora Principado (case C-226/12)

Mr Álvarez purchased a dwelling and his contract put the responsibility of paying various surcharges on him: the municipality tax on the increase in value of urban land, price of connecting the property to various utilities, etc. Upon having paid these surcharges, the consumer claimed that he should be reimbursed since the clause in the contract that obliged him to pay this money was unfair, creating significant imbalance in the rights and obligations of the parties. The consumer claimed that by law it was the seller who was obligated to pay these surcharges and therefore the contract clause was unfair by switching that default. The seller claimed that there was no imbalance if the amount of surcharges were compared to the amount of the purchase price.

The CJEU was asked to determine here whether obliging consumers to pay for expenses that by law need to be borne by the sellers is sufficient to determine significant imbalance in the unfairness test or whether all circumstances of the case needed to be taken into account, i.e., whether 'such a term have a significant economic impact having regard to the value of the transaction in question'. (Par. 17) The CJEU reminds its test from the Aziz case: to determine significant imbalance the court needs to look as to what rules would apply in the absence of a parties' agreement and whether through that analysis consumer may be seen as having been placed in an unfavourable position in comparison. (Par. 21) The court should not, therefore, limit its assessment to the 'quantitative economic evaluation based on a comparison between the total value of the transaction which is the subject of the contract and the costs charged to the consumer under that clause'. (Par. 22) Moreover, the significant imbalance may solely result from a 'sufficiently serious impairment of the legal situation' of a consumer through the contractual provision denying him his legal rights or limiting their enforcement. (Par. 23) While the CJEU leaves it, as usual, to the national court to ascertain whether there was an unfair contract term in this situation, it points out pretty specific directions as to how to evaluate whether the consumer could be required to pay this tax and other surcharges:

"As regards, in particular, the first obligation imposed on the consumer by clause 13 of the contract, namely, payment of the capital gains tax, it is apparent from the documents submitted to the Court that that obligation has the effect of transferring to the consumer, in his capacity as a purchaser, a tax liability which, under the applicable national legislation, should be borne by the seller in its capacity as vendor and as the recipient of an economic advantage that is subject to taxation, namely, the capital gain made as a result of the increase in value of the property sold. Thus, it appears that, while the seller benefits from the increase in the value of the property it is selling, the consumer must pay not only a purchase price that includes the increase in value achieved by that property, but also a tax charged on that increase in value. Furthermore, according to the written observations submitted to the Court by Mr Menéndez Álvarez, the amount of that tax was unknown at the date on which the contract was concluded and is to be determined only ex post by the relevant authority; if that is the case, this could lead to uncertainty on the part of the consumer as to the extent of the commitment undertaken." (Par. 26)

"As regards the second obligation imposed on the consumer by clause 13 of the contract, namely, payment of the charges for individual connection to the various utilities, such as water, gas, electrical power, and drainage, it is for the referring court to ascertain whether those charges include the costs of connecting with the general facilities essential for ensuring that the dwelling is habitable, which charges should, according to the relevant national rules, be borne by the vendor as part of its contractual obligation to provide a dwelling that is fit for its intended purpose, that is to say, in a proper habitable state. If that is the case, it is for the referring court to assess whether that contractual term, in so far as it restricts the rights which, under the rules of national law, the consumer enjoys under the contract and imposes on him an additional obligation not envisaged by those rules, constitutes a sufficiently serious impairment of the legal situation which national law confers on that consumer as a party to the contract." (Par. 28)

Interestingly, the CJEU requires the courts to check whether in exchange for taking the responsibility to pay these surcharges the consumer may not have acquired a discount on the sale price. It is, however, not sufficient that a contractual provision that has not been individually negotiated indicates that. The seller needs to present additional proof thereof. (Par. 29)

Consumer programme adopted

Today, the European Parliament has approved the Consumer Programme 2014-2020, with a budget of 189 mln euros. 

The focus of the new programme is on project which "empower vulnerable consumers, strengthen European consumer organisations and promote the development of price comparison websites."

The resolution was approved with a large majority, which seems to indicate a consensus among the various political parties. However, more nuanced positions may raise in the coming months as the programme takes shape. 

Choosing Not to Choose

On Lawrence Solum's Legal Theory blog, I came across a recent article on consumer behaviour by 'nudge expert' Cass Sunstein: 'Choosing Not to Choose'

The abstract reads:

'In many contexts, people choose not to choose, or would do so if they were asked. For example, some people prefer not to make choices about their health or retirement plans; they want to delegate those choices to a private or public institution that they trust. This point suggests that the line between active choosing and paternalism is often illusory. When private or public institutions override people’s desire not to choose, and insist on active choosing, they may well be behaving paternalistically. Active choosing can be seen as a form of libertarian paternalism if people are permitted to opt out of choosing in favor of a default (and in that sense not to choose); it is a form of nonlibertarian paternalism insofar as people are required to choose. For both ordinary people and private or public institutions, the ultimate judgment in favor of choosing, or in favor of choosing not to choose, depends largely on the costs of decisions and the costs of errors. But the value of learning, and of developing one’s own preferences and values, is also important, and may argue on behalf of active choosing, and against the choice not to choose.'

BEUC's new year's resolutions

Last Friday, European consumer organisation BEUC published a Memorandum for the Greek Presidency of the EU in this first half of 2014. Not surprisingly, BEUC remains very critical of the currently pending proposal for an optional Common European Sales Law (CESL). Other demands include: 

'• Product safety and market surveillance: Consumers’ exposure to unsafe products need to be minimised and market surveillance improved;

• Package travel: The legal protections for holidaymakers who book travel packages need to be modernised;

• Data Protection: An update of EU’s personal data protection rules should strengthen citizens’ protection and control over their own data;

• Key Information Document (KID) for retail investment products: Consumers need to be able to easily compare different kinds of products before deciding how to invest their savings;

• Payment accounts: Bank account fees should become more transparent, switching of accounts made easier and all EU consumers given access to a basic bank account;

• Official controls of food: Transparent controls, independent inspections and tougher enforcement can help restore consumer trust in food and the food chain;

• Medical devices: The revision of the current laws on medical devices should lead to improving the quality and safety of the medical devices sector, thereby restoring consumer trust.'

Heigh-Ho Heigh-Ho, It´s Off To Work We Go!

Best wishes for 2014! That being said it is time to leave behind the holidays' spirit and to update our dear readers on what is going on currently in Brussels. Not much, that's the good news for anyone who took a bit of a break - you didn't miss much. However, just before Christmas on the 20th of December the European Council agreed its position on two relevant for consumer protection draft laws.

 

The first one, concerns a draft directive that is to improve the transparency and comparability of information on fees related to payment accounts. (see our previous post Money, money, money...) Upon the Council establishing its position it will now be time to negotiate this directive's provisions with the Parliament. (Council sets out its position on payment accounts)

 

The second measure is a draft regulation to facilitate and speed up the authorisation procedure of clinical trials. The goal of the EU is to encourage more clinical trials (the number thereof decreased by 25% between 2007 and 2011) while at the same time not giving up the necessary standard of patients safety. The timeline for authorisation of clinical trials is to be set at 60 days, with a tacit agreement having been given if no decision is taken within this time (! - I wonder how this is going to play out if/when the administrative bodies will be overloadedCouncil confirms agreement on clinical trials)

). When a clinical trial requires a substantial modification the decision about it will need to be taken in 49 days (again with tacit agreement rule). One single application will suffice to conduct clinical trials in different Member States. The next step in the adoption of these rules lies with the European Parliament. (