Wednesday, 9 April 2014

Member States can forbid "payees" to levy charges on payment instruments (CJEU in case C-616/11)

In a case decided today, the Court of Justice shed some light on Directive 2007/64 EC, which, despite being somewhat technical, has a non-negligible impact on consumer contracts. 

The Directive concerns payment services in the internal market, both as concerns the relationship between payment service providers and other professionals, and between the latter and end customers- so, in cases like the one at hand, consumers. 

In the case that the Court had to examine, T-Mobile Austria GmbH v Verein für Konsumenteninformation, a consumer association had obtained from a local court a decision pursuant to which certain terms adopted by the known telecom company had to be removed from future contracts and not enforced in the existing contracts. This has not happened, as one may expect, under unfair terms legislation, but in light of the Austrian law implementing Directive 2007/64. 

The relevant Austrian legislation - Zahlungsdienstegesetz, BGBl. I, 66/2009; ‘ZaDiG’- provides (art. 27) that:The payment service provider shall not prevent the payee from offering the payer a reduction for the use of a given payment instrument. The payee is not permitted to charge for the use of a given payment instrument.

The term in T-mobiles general conditions charged customers who chose to pay their "Europe free" subscription by manual money transfer of via internet banking (rather then by direct debit or credit card) an additional fee of 3 euros. This charge was prima facie illegal under Austrian law, as ascertained by the local court, but T-mobile challenged the decision in point of law, claiming that the law did not correctly implement the Payment Services Directive. 

According to the Directive (art. 52 par 3) "The payment service provider shall not prevent the payee from requesting from the payer a charge or from offering him a reduction for the use of a given payment instrument. However, Member States may forbid or limit the right to request charges taking into account the need to encourage competition and promote the use of efficient payment instruments".

T-Mobile questioned both that money transfer through a paper form or internet banking could be considered as a payment instrument under the Directive and that the possibility of intervention granted to MS concerned them as telecom - and not payment - services providers. Finally, the company questioned Austria's decision to strictly prohibit all charges. 

In short, the CJEU declared that the means of payment concerned are to be considered payment instruments in the sense of the Directive (para 44) and that the Directive's provision also addresses non-payment service providers as "payees" (people to whom the money is transferred) (para 28). 

As concerns Austria's outright prohibition of payment charges, according to the CJEU (para 48) it is for the national court to assess, considering the broad discretion that MS enjoy under the Directive, whether the national legislation, as a whole, takes into account the need to encourage competition and the use of efficient payment instruments, which it is for the referring court to ascertain".


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