Thursday, 27 November 2014

Ex Officio Examination of the Status of the Buyer and Burden of Proof in Consumer Sales - Opinion AG Sharpston in case Froukje Faber (C-497/13)

27 October 2014: Opinion AG Sharpston in case Froukje Faber (C-497/13)

Today AG Sharpston handed down her opinion in a case where the consumer Froukje Faber bought a used car from Autobedrijf Hazet. The Dutch court of second instance dealing with the case asked for an interpretation of the  consumer sales directive

The car caught fire four months after having been handed over to Ms Faber. Neither in the proceeding in the first nor in the second instance Ms Faber claimed that she had bought the car for private purposes. The court asked if it had to examine out of his own motion - in violation of national rules and as a duty arising from the directive - whether the purchaser is a consumer. Unsurprisingly, GA Sharpston argued that national courts have this duty (due to the principle of effectiveness).

The wreck had been dismantled before the cause of the fire was found out. The Dutch court asked if it had to apply Art 5 (3) which partially reverses the burden of proof for the benefit of consumers ex officio, a question the GA answered in the affirmative. According to GA Sharpston, the consumer has to proof the lack of conformity if the latter becomes apparent within six months of delivery. He or she, however, does not have to show the cause for the lack of correspondence. For the present case this means that Ms Faber has to show that the fire occurred and '...why, as a result of the fire, she considers that the car which was delivered to her did not correspond with the car which, based on the contract and other relevant information, she had expected to receive. ... in the present case, it may be sufficient for Ms Faber to show that the product can no longer (properly) perform the function for which it was purchased...'. It is then up to the seller to proof that the car was in conformity with the contract at the moment of delivery. 

The Netherlands made use of the possibility to introduce a rule under which the buyer has to notify the seller about the presumed lack of conformity of the good in due time (Art 5 [2] consumer sales directive). The Dutch court asked how far this duty to notify goes. AG Sharpston highlighted that the buyer, when notifying the seller, does not yet have to proof the lack of conformity.

Monday, 24 November 2014

Press digest

Mobile banking

The Financial Times Adviser discusses the ongoing plans to regulate on the European level mobile banking (Getting mobile banking working). Currently, the revision of the Payment Services Directive and of the Regulation on Multilateral Interchange Fees is being negotiated among the European institutions. 
On review of the mobile banking industry in the UK conducted by the Financial Conduct Authority see: Mobile Banking and Payments - FCA Industry Review. Important: no evidence of consumer harm was found in the mobile banking and payments area.

Tobacco Products Directive

Another company - Philip Morris International - was granted a right by the English courts to apply for a preliminary ruling in front of the Court of Justice with regards to the interpretation of the Tobacco Products Directive. This time it is the competence of the EU to regulate in this area that is being questioned: the argument is that the Directive does not aim to improve the internal market (e.g. it prohibits menthol even though it's legal in all Member States); that the Directive infringes consumers fundamental rights to information about the products they are choosing (through forcing companies to adopt plain packaging); as well as whether the delegation of power to the Commission to specify certain issue was validly defined (Philip Morris International Granted Right to Challenge EU's Tobacco Products Directive Before the Court of Justicce of the European Union).

Mortgage Credit Directive

Telegraph reports on the uncertainties related to the implementation of the new Mortgage Credit Directive in the UK - who exactly may be seen as consumer and fall under the Directive's scope? "Accidental landlords" - that is persons who became landlords "as a result of circumstance rather than through their own active business decision" will be seen as consumers. Who is that exactly? And what rules shall apply to buy-to-let mortgages? (Would this buy-to-let couple be caught out by new EU rules?)

Privacy online

If you are interested to see which applications and which online tools have what sort of privacy protection, check this data on the Secure Messaging Scorecard (A project of the Electronic Frontier Foundation).

US consumer news (just for fun)

Verizon fights against the Federal Communications Commission plan to introduce net neutrality, threatening to take them to court: Verizon: We Will Sue FCC Again If "Hybrid" Net Neutrality Happens.

Berkeley, California becomes the first American city to introduce a tax on sugary drinks: California City Votes In The Nation's First Soda Tax

Apple is being sued for an equivalent of wiretapping due to users who switched from an iPhone to an Android phone not receiving their iMessages (More Former iPhone Users Suing Apple, Claiming iMessage "Intercepts" Texts Meant for Android Phones).

Federal Trade Commission sues Gerber Products Co. for falsely advertising that its Good Start Gentle formula prevents or reduces the risk of children developing allergies (FTC Sues Gerber For False Advertising Over Claims Its Formula Can Prevent Allergies).

Air passengers' rights - Sandy Siewert and Others v Condor Flugdienst (Order in Case C-394/14)

Travelers become more and more familiar with their rights as stipulated by Regulation 261/2004 establishing common rules on compensation and assistance to passengers in the event of denied boarding and of cancellation or long delay of flights. A “long delay” means that passengers have a right to compensation starting once the airplane is delayed by three hours. Passengers simply have to fill in a special complaint form. Alternatively, various claims handlers operate in the sector.

Air carriers are, however, relieved of their obligations if the respective cancellation or delay was caused by extraordinary circumstances which could not have been avoided even if all reasonable measures had been taken (see Art. 5 (3) regulation). This provision continuously leads to court cases. In an order the Court of Justice of the European Union clarified another matter in this context on 14 November 2014. The reason for the delay of the airplane in the case at hand was that a set of mobile boarding stairs had collided with the aircraft, causing structural damage to a wing, as a consequence of which the aircraft had to be replaced.

Whereas it is established case-law of the Court that technical problems may be regarded as ‘extraordinary circumstances’, provided that they stem from an event which, owing to its nature or origin, is not inherent in the normal exercise of the activity of the air carrier and is beyond its actual control (Case C-549/07 Wallentin-Hermann), the situation at hand judged to be of a different nature.  Mobile stairs or gangways can be regarded as indispensable to air passenger transport and, therefore, air carriers are regularly faced with situations arising from the use of such equipment. A collision between an aircraft and a set of mobile boarding stairs is, hence, an event inherent in the normal exercise of the activity of the air carrier. As a consequence, the air carrier was not relieved of its payment obligation.

Rightly, by issuing an order and not a judgment the Court signals that this outcome is undisputed.

Please find the full text of the order here.

Friday, 21 November 2014

Producers of medicines must share information on their adverse effects - CJEU in Novo Nordisk Pharma (C-310/13)

20 November 2014: CJEU judgment in Novo Nordisk Pharma GmbH (C-310/13)

We wrote before on this blog about the problem presented in the case Novo Nordisk Pharma (Consumer's right to information about medicine's side effects - AG Szpunar in Novo Nordisk Pharma (C-310/13)). Yesterday, the CJEU gave its judgment, deciding that the Product Liability Directive and its maximum harmonisation character do not preclude such national legislation that imposes on trader's information duties not mentioned in this Directive. (Par. 33)

As a brief reminder, Article 13 of the Directive allows Member States to uphold such national special systems of liability that existed in a given Member State at the moment of notification of this Directive to the Member State. Germany has a special system of liability applicable to cases when consumers' health is damaged due to the use of medicines. This special liability system was, however, amended after the Directive has been notified by introducing a consumer's right to request from the producer of the medicinal product information on the adverse effects of that product. The German courts were unsure whether this requirement was, therefore, compliant with the Directive.

The CJEU confirms one of the views expressed by AG Szpunar, namely, that since the Directive does not regulate information duties of the producers, the consumer's right to request such information falls outside its scope (Par. 25, 29). Recital 18 of the Directive confirms that it doesn't aim to exhaustively harmonise the sphere of liability for defective products beyond the matters regulated by it (Par. 24). While the Directive places the burden of proof that the product was defective and caused damage on the consumer, the national legislation allowing consumers to request information on side effects of the medicinal products does not reverse that burden of proof but rather may only alleviate it (Par. 26-29). The CJEU does not see a possibility for the German provision to distort the effectiveness of the Directive's system of liability either (Par. 30-31).

All in all, this is good news for German consumers who may continue to require producers of medicinal products to send them detailed information on adverse effects of their medicines, which may enable consumers' claims for damages.

Friday, 14 November 2014

15th conference of the International Association of Consumer Law


Tomorrow is the deadline for submitting your abstracts if you wish to present at the 15th conference of the International Association of Consumer Law in Amsterdam next year. Of course, we will be happy to welcome you whether you decide to present or not, but just in case you wanted to share your research/ experiences with other attendees, please see this as a gentle reminder to notify us of your intentions. Details about submissions.

Conference on online gambling in the EU

Conference Announcement

If you are interested in consumer protection against remote gambling and want to stay up-to-date with the current developments on this subject, we would like to inform you about the upcoming conference on these issues.

Date: 25 November 2014 
Location: University of London Institute in Paris 
Theme: Regulating Online Gambling in the EU - Recommendation 2014/478/EU on Player Protection - Where Do We Go From Here?
More information: Link to conference website

Tuesday, 4 November 2014

Press digest

Cloud computing

New research suggests that 72% of European cloud users still are not able to answer any questions as to where their data is being transferred to, which means that even if they have been informed about this by their cloud service providers, this information clearly has not reached them. (see Many cloud systems 'not meeting EU data protection rules')

Mobile banking and mobile advertising

The European Banking Authority is consulting its new guidelines for providing more security to online payments market. The new guidelines of the European Banking Authority so far correspond to the rules of the EU Payment Services Directive. The question is whether it makes sense to adopt them as such as of August 2015 or whether to strengthen them already in the anticipation of the new PSD2. (New payment security guidelines to apply to online retail from August 2015) A brief summary of a current EU regulatory landscape with respect to mobile banking and payments may be found here: FCA thematic review - mobile banking and payments September 2014.

 Another article presents well how the use of smartphones influences modern advertising strategies. (3 Truths About Mobile Advertising In The Era Of Hyper-Connectivity)
Morality & consumers

The Archbishop of Bukavu and President of the Provincial Assembly of Bishops of Bukavu and Kindu addresses the European Parliament and other European institutions to guarantee that the resources used in consumer goods are not linked to human right violations and conflicts. (EU must give assurances on the morality of trade in natural resources)

Consumer behaviour

Interesting article on what went wrong with the consumer culture/ consumer image. (Viewpoint: How the consumer dream went wrong) Another survey shows us that at least in the US trust of consumers in using their credit cards have diminished recently; is it turn to popularize fingerprint-protected credit cards? (Data Breaches Are Affecting Consumer Behaviour and Trust in Credit Cards...)

BEUC on transparency in the TTIP

One of the most discussed issues regarding the Transatlantic Trade and Investment Partnership (TTIP) that is being negotiated by the EU and US concerns transparency. The TTIP negotiations have been heavily criticised for not giving enough clarity; it has been put forward that an open democratic debate is needed to legitimise the agreement (eg by Marija Bartl and Elaine Fahey, 'Transatlantic Partnership requires open democratic debate').

European consumer organisation BEUC has now published a number of suggestions for improving the input of an important group of stakeholders, ie consumers. Its recommendations are aimed at enhancing transparency and engagement in the TTIP, thus improving accountability to the public. BEUC's demands include: public access to documents, stakeholders' consultation, a more active role for the Advisory Group on the TTIP, and involvement of other EU institutions beside the Commission.

See also BEUC's new blog.