Thursday, 17 November 2016

AG Szpunar: after-sales helplines should be available at the cost of standard calls

Case C-568/15 Zentrale zur Bekämpfung unlauteren Wettbewerbs Frankfurt am Main is a sign that one of the most recent EU legal acts in the field of consumer protection - the Consumer Rights Directive 2011/83/EU (CRD) - is gradually making its way before the Court of Justice. The opinion of Advocate-General Szpunar, delivered on 10 November, has just been published in multiple language versions. Full text of the opinion can be found here

The case concerns the concept of ‘basic rate’ contained in the Consumer Rights Directive. Article 21 CRD obliges Member States to ensure that “where the trader operates a telephone line for the purpose of contacting him by telephone in relation to the contract concluded, the consumer, when contacting the trader is not bound to pay more than the basic rate”. The directive leaves it open, however, which of the following factors is decisive for the application of Article 21: 
  • the charges, which consumers incur when contacting the trader by telephone, i.e. charges should not exceed a certain threshold, in particular the costs of a standard call at normal market prices, or 
  • the profit, which the provision of non-geographic telephone lines generates, i.e. traders should not make profit through the telephone helpline and the overall cost of such calls is irrelevant.
Note that Article 21 only refers to the provision of after-sales telephone lines. A distinction should therefore be made between communication means used for the conclusion of the contract, where the trader is only required to inform the consumer about the costs higher than the basic rate – Article 6(1)(f), and telephone lines used after the contract is concluded, which are of direct relevance to the case at hand. 

Facts of the case 

The defendant, a German company, provided consumers with an after-sales-service telephone line available at a special (non-geographic) number containing the prefix 0180, which is used in Germany for support-oriented services at a single national rate. This rate, however, exceeded the normal market charges for standard calls, i.e. the costs which consumers typically incur, according to their contracts with telecommunications service providers, when they call a standard (geographic) fixed or mobile number. Zentrale zur Bekämpfung unlauteren Wettbewerbs, a consumer association, questioned the legality of this practice and brought an action for an injunction before the German court. The defendant maintained that the German legislation does not prohibit traders from providing helplines at a cost exceeding the cost of standard calls, provided that it is the telecommunications service provider and not the trader who profits from this practice. Literally speaking, such an interpretation was supported by the wording of Paragraph 312a of the Bürgerliches Gesetzbuch (German Civil Code, BGB), according to which consumers should not pay for anything else than for the mere use of the telecommunications service. BGB does not specify the type of the telecommunications service, though. Following this interpretation, the fact that consumers calling an after-sales telephone line have to pay more to telecom operators, has no bearing on the assessment of the trader's practice. 

AG’s opinion 

AG Szpunar did not share the argument of the defentant and proposed a pro-consumer interpretation of Article 21 CRD. According to the Advocate-General, consumers calling the after-sales telephone line of the trader must not incur charges higher than the normal costs which they would incur for calling a standard (geographic) fixed or mobile number. Who ultimately receives the remuneration payable by the consumer is legally irrelevant. But how did the AG arrive at this conclusion?

Having established that the literal and comparative interpretation of the term ‘basic rate’ does not provide necessary clarification, the Advocate-General turned to the schematic, teleological and historical reasoning. 

Schematic interpretation: Article 6(1)(f) and Article 21 

An essential part of the Advocate-General's analysis referred to the general scheme, purpose and regulatory context of the directive, and in particular the relationship between Article 6(1)(f) and Article 21 CRD. AG Szpunar noted that pursuant to Article 6(1)(f), interpreted a contrario, the trader is not required to inform consumer about the costs of the means of direct communication unless they exceed the basic rate. He further agreed with the observation of the European Commission that if the charges incurred by consumers were irrelevant to the interpretation of the concept ‘basic rate’, consumers would also be unable to estimate the costs arising from the use of the telecommunications service at a pre-contractual stage. Such an interpretation of Article 6(1)(f) would clearly undermine the rationale of this provision. In the context of Article 6(1)(f) the term 'basic rate' should therefore be understood as the costs of a normal standard (geographic) fixed or mobile telephone call. According to the AG, for reasons of systemic coherence as well as further arguments stated below, the same should apply to the interpretation of Article 21. 

Teleological interpretation: full harmonisation and a high level of consumer protection 

Having pointed to the full harmonisation approach adopted the CRD, along with its aim to achieve a high level of consumer protection, AG Szpunar turned his attention to the teleological analysis of Article 21. He noted that the existance of special telephone lines, with call rates higher than normal market rates, may prompt consumers to avoid telephone contact with the trader for fear of incurring excessive costs. This, in turn, could discourage consumers not only from discussing the details of their purchase, but also from asserting their contractual rights or seeking legal remedies. Article 21 CRD would thus lose its effectiveness if the protection of the consumer from premium call rates depended on whether or not the trader receives part of the charges paid. 

Legislative history 

Advocate-General also paid some attention to the historical evolution of the interpreted provision. He referred to the amendments proposed by the European Parliament and, assertedly, accepted by co-legislators as well as to the DG Justice Guidance Document. Based on this analysis, the AG concluded that the aim of EU legislature was to protect consumers from additional or excessive communication costs. An interpretation to the effect that the concept of ‘basic rate’ covers all costs of the telecommunications service, irrespective of the amount of these costs, would contradict these objectives. 

Final remark 

Attention of the reader should finally be drawn to the following statement in the AG's opinion: "it is clear from the general scheme of the directive that there is an irrebuttable presumption that the telephone assistance service is included in the parties’ expectations and therefore in the price already paid by the consumer. The use of a premium rate number would amount to making the consumer pay additional costs for the same service" (para 37). This argument appears rather tenuous. Reference to the price already paid by the consumer implies the internalisation of costs by the trader and could, in fact, support the contested German interpretation, according to which the (lack of) profit made by trader remains of relevance to the assessment. Overall, however, the pro-consumer interpretation of Article 21 CRD presented by Advocate-General Szpunar is well justified on other grounds and as such should be welcomed. 

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