Monday, 29 May 2017

REFIT report of EU consumer law: exciting times ahead

Readers of this blog will know that 1,5 years ago the European Commission published a 'roadmap' for an evaluation and fitness check of EU consumer law (as a part of its 'Regulatory Fitness and Performance Programme'; REFIT). Today, the Commission presented an analysis which is intended to "serve as a basis for further improving the legal framework of consumer and business" (click here for the press release). According to the Commission, "[t]he results show that while European consumers already benefit from strong consumer rights, there is room for improvement for instance when it comes to enforcing these rights or making them fit for the digital age".

For this analysis, six consumer directives have been reviewed, including the Unfair Commercial Practices Directive, the Consumer Sales Directive and the Unfair Contract Terms Directive. Several issues are identified that should be addressed, such as limited redress possibilities and consumer rights not being fully adapted to the digital world. The Commission has announced that it will further examine rules concerning, inter alia, (civil law/contractual) remedies, online services and online platforms. It will also look into strengthening and harmonising the level of sanctions as well as injunctions and collective redress. This year (2017) a public consultation and an impact assessment will follow. 

We will keep you informed about any relevant (legislative) developments on this blog. For more information about the review of EU consumer law, see here.

Wednesday, 24 May 2017

EuCML - call for papers on digital sphere and consumers

CALL FOR PAPERS

New technologies are evolving at a fast rate, serving consumers and posing new threats in equal measures. It is for lawyers to keep up and perhaps anticipate what regulatory needs may present themselves in future. While the European Commission is busy with a review of intermediary's liability and the Regulation of the platform economy, other technologies are worthy of attention, although they may not yet be on the legislative agenda. EuCML (Journal of European Consumer and Market Law) wishes to attract articles at the cutting edge of development in the digital sphere. We therefore welcome articles on (but not limited to) the legal implications of:
  • big data, deep learning
  • chat bots
  • progressive web apps
  • 3D printing
  • human microchips
  • block chain technology
  • driverless cars
  • internet of things
  • the use of artificial intelligence
  • any other subject we have not yet come across and that will have an impact on consumers and their protection.
Submissions should be sent digitally via e-mail in Word format to the Editors at editors@eucml.eu
All articles are double blind peer-reviewed. Articles should preferably not be longer than 10.000 words and follow our submissions guidelines (OSCOLA), available at: 

Tuesday, 16 May 2017

New roaming rules in books and in action - several insights from Poland

How did this all come about?

Reduction of roaming surcharges in the EU is one of the European legislator's flagship projects, perceived as a much-needed positive signal in the times of growing euroscepticism. Indeed, against a background of continuous setbacks and crises, bringing down prices of foreign calls, text messages and data transfers within the EU appears to be a success story. The process began in 2007 with the adoption of Regulation 717/2007 introducing the so-called Eurotariff. Not surprisingly, even this rather modest regulatory intervention in the roaming market met with resistance from the telecom operators and was challenged before the Court of Justice. However, the effects were opposite to the ones intended: after the regulation was upheld by the CJEU, the European legislator felt encouraged to regulate the roaming prices even further. Over time, Regulation 717/2007 was substantially amended and eventually replaced with Regulation 531/2012 on roaming on public mobile communications networks within the Union, which also today is one of the key EU acts in this domain.

What brought the issue of roaming back on the front pages is the adoption of Regulation 2015/2120 in November 2015. The act introduced a number of amendments to Regulation 531/2012 and set as its aim the (almost) complete abolishment of retail roaming surcharges by 15 June 2017. 

Two further steps needed to be taken, however, before the objective set in new regulation could be reached:
  • the adoption of implementing rules concerning possible limitations to the "roam like at home" principle, namely the so-called fair use policies and exceptional authorisations which telecom operators may obtain in order to apply a surcharge - the Commission Implementing Regulation 2016/2286 to that end was adopted on 15 December 2016, and
  • the adoption of a further regulation imposing new caps on roaming charges in the wholesale market, i.e. prices which operators are charging from their foreign counterparts for using their networks. Unlike regulation 2016/2286, imposition of the lower wholesale caps had to be adopted in the ordinary legislative procedure pursuant to Art. 114 TFEU and thus required an interinstitutional agreement. As for now, everything seems to indicate that also this last hurdle will soon be overcome. The Commission tabled the respective proposal in June 2016 and after approx. 6 months, on 31 January 2017, a provisional agreement between the Council and the European Parliament was reached. The EP voted on the regulation in its April session and the Council is expected to follow suit very soon.

What are the new rules...

Following the recent reform, Article 6a was added to Regulation 531/2012, which reads as follows: 

With effect from 15 June 2017, provided that the legislative act to be adopted following the proposal referred to in Article 19(2) [new rules on the wholesale charges] is applicable on that date, roaming providers shall not levy any surcharge in addition to the domestic retail price on roaming customers in any Member State for any regulated roaming calls made or received, for any regulated roaming SMS messages sent and for any regulated data roaming services used, including MMS messages, nor any general charge to enable the terminal equipment or service to be used abroad, subject to Articles 6b and 6c.

From the user's perspective, Articles 6b and 6c are, of course, a fly in the ointment. The provisions lay down the two instances in which the "roam like at home" principle might be limited.

Article 6b refers to the so-called fair use policy, which roaming providers may apply in order to prevent abusive or anomalous usage of regulated retail roaming services by roaming customers, such as the use of such services by roaming customers in a Member State other than that of their domestic provider for purposes other than periodic travel. Fair use policies shall, however, enable the roaming provider’s customers to consume volumes of regulated retail roaming services at the applicable domestic retail price that are consistent with their respective tariff plans.

Example: mobile data 

Operators may, for instance, impose a certain limit on data use during roaming if a subscriber has unlimited mobile data or very affordable data package (a so-called 'open data bundle', cf. Article 4(2) of the implementing regulation). Roaming providers who decide to apply such a fair use policy, must inform the subscribers about this fact and alert them once the limit is reached. Beyond this threshold, subscribers can continue to use mobile data abroad, subject to a charge of maximum €7.70/GB + VAT. The charge will decreased gradually to reach €2.50/GB as of 2022.

Furthermore, Article 6c stipulates that in specific and exceptional circumstances, with a view to ensuring the sustainability of its domestic charging model, where a roaming provider is not able to recover its overall actual and projected costs of providing regulated roaming services in accordance with Articles 6a and 6b, from its overall actual and projected revenues from the provision of such services, that roaming provider may apply for authorisation to apply a surcharge

Specifics of both limitations are set out in the implementing regulation mentioned above.

... and how telecom operators read them?

First indications about the impact of the new law on the market practice can already be observed in several countries, for example in Poland, where telecom operators have just disclosed their new tariffs. Rather unsurprisingly, each of the four major telecom operators decided to impose certain limits on data use during roaming (from 1 to 8 GB depending on the subscriber's tariff plan). Interestingly, only one operator decided to apply the "roam like at home" principle without any significant limitations as regards the number of incoming and outgoing calls as well as text messages sent. The remaining three players established yearly limits, which would also be applicable to subscribers whose plans provide for unlimited domestic calls and SMS. Such an interpretation of the fair use policy appears to be at odds with what the European Commission had in mind.

The proposed price lists are currently being reviewed by the Polish telecom regulator, the President of the Office of Electronic Communications (UKE). What is already known today is that the new tariffs had not been welcomed in the Polish consumer protection agency, the Office of Competition and Consumer Protection (UOKiK), as well as in the EC, which may call upon the UKE to take action. It thus seems that interesting developments are still ahead!




Thursday, 11 May 2017

Services provided by Uber are services in the field of transport, not information society services - Advocate-General says

Earlier today, the long-awaited opinion of Advocate-General Szpunar in case C‑434/15 Uber Spain was published. The analysis concerns one of the two cases brought before the CJEU in connection with the controversial mobile app. The key question addressed in both cases is whether services provided by Uber should be classified as information society services or as transport services. This categorization is of paramount importance from the point of view of EU law.

The opinion is bad news to Uber Technologies Inc. and its European subsidiaries. The Advocate-General took the view that services provided by Uber do not constitute information society services, but should rather be regarded as services in the field of transport. Consequently, the activity of Uber falls outside the scope of both E-Commerce Directive and Services Directive. Such an interpretation would allow Member States to subject Uber to a number of sectoral requirements.

The opinion is based on several factual assumptions about the practical operation of the analysed business model. Primary focus remains on the service marketed as UberPOP. These factual elements are, of course, for the national court to verify. More importantly, however, the opinion also includes a more abstract interpretation of the legal issues at hand. If followed by the Court of Justice, the framework proposed by the AG could be used in the assessment of other digital business models. 

The essential part of the opinion concerns the notion of an information society service. By way of reminder, the term refers to "any service normally provided for remuneration, at a distance, by electronic means and at the individual request of a recipient of services" (Article 2(a) of Directive 2000/31/EC in connection with Article 1(2) of Directive 98/34/EC). Since the business model at hand involves both electronically and non-electronically supplied services, the following questions have arisen: 1) which services are actually provided by Uber and 2) are these services provided at a distance and by electronic means.

According to the AG, the decisive question in this respect is whether the service which is not supplied by electronic means is economically independent of the service which is provided by that means. The relevant framework of assessment is set out in para. 35, which reads as follows:

"Where the provider of the service supplied by electronic means is also the provider of the service not supplied by such means or where he exercises decisive influence over the conditions under which the latter service is provided, so that the two services form an inseparable whole, it is necessary to identify the main component of the supply envisaged, that is to say, the component which gives it meaning in economic terms. For a service to be classified as an information society service, this main component must be performed by electronic means."

Assessment of the Uber business model led the Advocate-General to believe that, in that factual context, the connection of passengers and drivers is neither self-standing, nor the main supply in relation to the supply of transport. Consequently, the service provided by Uber cannot be classified as an ‘information society service’. The opinion cites the examples of other digital services, such as platforms for the online sale of goods (para. 36) and platforms for the purchase of flights or hotel bookings (paras. 57-60), and draws a distinction between operators of such platforms an Uber. The AG also points to the difference between Uber and ride-sharing platforms, but does not elaborate on that aspect any further (para. 42). He similarly distances himself from competition and labour law issues.

The overall line of argumentation along with the conclusions reached are summarised in paras. 71-72 of the opinion.

71. (...) In the case of composite services, consisting of a component provided by electronic means and another component not provided by such means, the first component must be either economically independent of the second or the main component of the two in order to be classified as an ‘information society service’. Uber’s activity must be viewed as a whole encompassing both the service of connecting passengers and drivers with one another by means of the smartphone application and the supply of transport itself, which constitutes, from an economic perspective, the main component. This activity cannot therefore be split into two, for the purpose of classifying a part of the service as an information society service. Consequently, the service must be classified as a ‘service in the field of transport’.

72. I therefore propose that the Court should answer the first and second questions referred for a preliminary ruling as follows:

– Article 2(a) of Directive 2000/31, read in conjunction with Article 1(2) of Directive 98/34, must be interpreted as meaning that a service that connects, by means of mobile telephone software, potential passengers with drivers offering individual urban transport on demand, where the provider of the service exerts control over the key conditions governing the supply of transport made within that context, in particular the price, does not constitute an information society service within the meaning of those provisions.

– Article 58(1) TFEU and Article 2(2)(d) of Directive 2006/123 must be interpreted as meaning that the service described in the preceding point constitutes a transport service for the purposes of those provisions.

On a final note

The same Advocate-General is drafting the opinion in the second case involving Uber, namely C-320/16 Uber France, which leaves the American company with little grounds for optimism. Publication of the other opinion is scheduled for 4 July. Since opinions of AGs are not binding on the Court, Uber can, however, still hope that the CJEU will not follow the proposed line of argumentation.

Notifying about cancelled flights - CJEU in Krijgsman (C-302/16)

An interesting judgment on air passenger rights has been given today by the Court of Justice in the case Krijgsman (C-302/16). It clarifies that the airlines are responsible for paying out compensation to passengers whose flights have been cancelled (pursuant to Regulation 261/2004) in any event when the information on the cancellation has not been communicated to the passengers at least two weeks before the scheduled departure time. The airlines don't discharge their obligation by timely notifying about the cancellation the travel agent through which the passengers booked their flight, if that information is not relayed further to the passengers by the travel agent. This is consistent with keeping the compensation pursuant to Regulation 261/2004 separate from any contractual relationship between airlines and passengers.

In practice this means that anyone booking a flight through a travel agency (whether regular one or an online intermediary websites) may still expect to be compensated by the airlines in case of a flight's cancellation, unless they have received information about this cancellation at least two weeks before the scheduled departure time (either from the airline or from their travel agent).

Transparency: where art thou in consumer protection?


TRANSPARENCY:
WHERE ART THOU IN CONSUMER PROTECTION?
Date: 27 June 2017
Place: Laver LT3

Moderator: Joasia Luzak (University of Exeter, UK)

  • 10:00-10:45      Evelyne Terryn (KU Leuven, Belgium): "Transparency in the UCTD: time for reform?

  • 10:45-11:00       coffee/tea break

  • 11:00-11:45   Monika Namysłowska (University of Łódź, Poland): "Transparency in commercial practices"

  • 11:45-12:30     Alison Harcourt (University of Exeter, UK): "Media transparency in Europe"

  • 12:30-14:00      buffet lunch for participants

  • 14:00-14:45   Christopher Docksey (European Data Protection Supervisor): "Transparency online under the new GDPR rules" (TBC)

  • 14:45-15:30   Alexander Wulf (SRH Hochschule Berlin, Germany): "Analysing transparency in information obligations from a multidisciplinary empirical perspective"

  • 15:30-16:15  Kyriaki Noussia (University of Exeter, UK): "Transparency in consumer insurance contracts"


Symposium organised by: University of Exeter, Centre for European Legal Studies, Joasia Luzak

Monday, 8 May 2017

Public consultation on FinTech: closes 15 June 2017

The EU Commission is currently holding a public consultation on FinTech (see here).

FinTech, standing for financial technologies, means the use of technology in the provision of financial service. The term is very broad, it includes the provision of traditional financial services with the use of technology by traditional service providers (e.g. online banking), or the provision of innovative products by innovative startups (e.g. peer-to-peer lending and bitcoin). Creating policy solutions for protecting FinTech customers is one of the current priorities under the Consumer financial services action plan that sees FinTech a major driver for strengthening the EU single market for financial services (see for more here).

The consultation  is structured around four broad areas to reflect main opportunities and challenges raised by FinTech:

1. Fostering access to financial services for consumers and businesses;
2. Bringing down operational costs and increasing efficiency for the industry;
3. Making the single market more competitive by lowering barriers to entry; and
4. Balancing greater data sharing and transparency with data security and protection needs.

Useful material for understanding the opportunities and challenge raised by FinTech is provided by a one day conference on FinTech hosted by the EU Commission. The material is available online, including a video of the conference (see it here).

Based on the results of this public consultation and the work of the FinTech Task Force (see our post here) the EU Commission will determine which actions are required to support the development of FinTech and a technology-driven single market for financial services.

The consultation is open until 15 June 2017, and awaits reposes from consumers and organizations. So if you have any personal experience with using FinTech products and services and or if you have relevant research results, please share them. As always, we will be waiting for the results of the public consultation to report on them to you.

EU Commission adopts the Consumer Financial Services Action Plan

In March 2017 the EU Commission published a Consumer Financial Services Action Plan: Better Products, More Choice, setting out the strategy for strengthening the EU financial market for retail financial services.

Despite retail financial services (e.g. bank accounts, credits, insurance) being part of our daily lives, and the extensive measures of harmonization taking place in recent years, research shows that retail financial markets are primarily national and that cross-border transactions are rare. The EU Commission believes that having access to financial services and products provided in another Member State would increase consumer choice and create better products. To this effect, it sees a major opportunity in the development of FinTech (the online provision of traditional and innovative financial services and products) on which it currently holds a public consultation (see our report here).

The Action Plan identified three main areas for further work:

  • Increased consumer trust and empowered consumers for buying services both at home and in another Member State, supported by various measures, including reducing the fees for cross-border transactions and making the fees for currency conversion transparent, improve motor insurance products and facilitate the cross border provision of consumer credit.
  • Reduced legal and regulatory obstacles for doing business abroad including working on common creditworthiness assessment criteria and facilitating the exchange of data between credit registers.
  • Support the development of an innovative digital world the online provision of services being the key for developing the single market retail financial services and posing many challenges such as online customer identification and the regulation of the provision of innovative products,

The Action Plan builds on the Green Paper on retail financial services published in December 2015 with incorporating the results of the public consultation that has followed the Green Paper (see our post here and here),

The Action Plan puts forward a vision of a genuine technology enabled single market for retail financial services where no distinction is made between domestic and cross-border providers.

Ban on advertising of dental practices contrary to EU (not consumer) law - CJEU in Vanderborght (C-339/15)

It is not the first time that the CJEU has to assess the compliance with EU law of Belgian law and its tendency to absolutely prohibit certain commercial practices. In the Vanderborght case (decided last Thursday, 4 May; case C-339/15), it was the ban on advertising of dental practices that was at stake.

Mr Vanderborght offered and advertised his dental services in Belgium, the latter by installing "a sign consisting of three printed faces, stating his name, his designation as a dentist, the address of his website and the telephone number of his practice", as well as by advertising in local newspapers. On his website he provided information on various treatments he offered. A professional association of dentists (Verbond der Vlaamse Tandartsen) was concerned about his advertising practices as pursuant to Belgium law advertising relating to oral and dental care is prohibited, in order to protect public health and dignity of the profession of dentist. Mr Vanderborght claimed that such a general ban on advertising was contrary to EU law, among other things, to the provisions of the Unfair Commercial Practices Directive (2005/29/EC).

The CJEU points out that the UCPD allows the Member States to introduce other rules that aim at protecting health and safety of consumer products, as well as codes of conduct related to upholding "high standards of integrity on the part of the professional" (para. 26-27). Therefore, EU consumer law will not stand in the way of imposing a general ban on advertising regulated services, which ban is motivated by concern for public health and safety of products. However, such a general ban on advertising may infringe the freedom of movement of services - art. 56TFEU and provisions of the E-Commerce Directive (2000/31/EC), considering also advertising via websites falls within the scope of this ban.

Thursday, 4 May 2017

A bird or a whole flock? CJEU again on extraordinary circumstances and Regulation 261/04

Today, the Court of Justice had to decide yet another case on extraordinary circumstances and flight disruptions under the Air Passenger Rights regulation. 

This time, the referring court wanted to know whether a bird and an aircraft 'meeting' each other, which gives rise to a delay in order to assess or fix the consequences of the impact, is to be considered as an extraordinary circumstance. The court's case-law so far had sought to clarify that most events, and namely all those which are "inherent in the normal exercise of an air carrier's activity" are excluded. (see inter alia AG opinion para 37)
Prior to the decision, the Advocate General had rejected the airline's counsel's submission that seemingly tried to "systematize" extraordinary circumstances, differentiating events with an "endogenous" cause from those which have an "exogenous" origin. The AG considered this  dichotomy tantamount to distinguishing between events taking place "inside or outside the cabin" and observed that introducing this criterion would replace the legal assessment for a merely factual one incapable of justifying the different consequences arising from the two qualifications. (paras 38-39) 

Thus, according to the AG, a collision with a bird would not have to be considered as extraordinary circumstances, since accidents of this kind are common; the situation would only be different "if the flight of birds arriving in large numbers temporarily prevented an aircraft from taking off or forced it to land at an alternative airport". (para 43)

The Court did not agree with the AG (decision available in French). A collision with a bird can represent extraordinary circumstances, if the air carrier has taken all reasonable measures to avoid the accident. The Court, in this respect, gives weight to a different formulation of the "inherent in the normal exercise" test, which also includes that the event is "beyond the actual control of that carrier on account of its nature or origin" (the test was formulated in this way in Wallentin-Hermann v Alitalia, the shorter version was adopted in van der Lans v KLM, see references in the decision). In this way, the Court does not expressly endorse the distinction rejected by the AG, but rephrases it in line with its own precedents.

Accidents involving birds are evidently beyond the carrier's control, but this finding only exhonerates the carrier if the latter can prove that all reasonable measures have been taken and the disruption could still not be avoided. These "reasonable measures" could be conceived at two stages: as aimed at avoiding the collision, on the one hand, and as aimed at avoiding the flight's long delay on the other. 

As concerns the first, the Courts warns that the carrier should not be burdened, in this respect, with obligations that would normally be for others to discharge. In particular, implementing technologies and other arrangements capable of reducing this kind of risk are usually mainly a task for different operators (eg airports). 

As concerns, avoiding the delay, in this case much of the disruption was apparently caused by the fact that the owner of the aircraft had refused to acknowledge the positive results of an inspection effectuated by local technicians and a technician affiliated with the carrier had to be flied in to carry out a second check. This circumstance, if verified, would stand in the way of characterising the delay as due to extraordinary circumstances. The carrier would, according to the court's established case law, be expected to stand liable to the passengers and then seek recourse against those who have caused the problem (ie, in this case, the aircraft's owner). 

So all in all the claimants in this case may be able to obtain their compensation, but the Court seems to have set the first limitations to its expansive reading of the scope of air carriers liability for delay or cancellation under the Air Passenger Rights regulation. Giving weight to the notion that a disruption not falling under the carrier's control would count as extraordinary circumstances may grant some relief to the industry - although it seems also likely to generate new litigation as carriers will inevitably be tempted to read this exclusion extensively. Thus, even more than in other cases, this is clearly ***to be continued***.   

Wednesday, 3 May 2017

Foreign currency and unfair terms: Opinion AG Wahl in Case C-186/16

We would like to draw the attention of the readers of our blog to the Opinion of Advocate General Wahl in a case concerning the repayment of a loan in a foreign currency and unfair terms (Case C-186/16, Andriciuc and Others). The Opinion was published last week on 27 April 2017; click here for an extensive summary. 

The case concerned loan agreements in Swiss francs concluded between consumers and a Romanian bank. The terms of the agreement provided for repayment of the loans in Swiss francs. However, the exchange rate more or less doubled between 2007 and 2014. In short, AG Wahl finds that the requirement that contractual terms must be drafted in plain intelligible language cannot oblige the seller or supplier to anticipate and inform the consumer of subsequent changes which were not foreseeable, such as exceptional fluctuations in exchange rates, or to bear the consequences of such changes. According to AG Wahl, an average consumer would not only be aware of the possibility of a rise or fall in the value of the foreign currency, but also be able to assess the economic consequences for the consumer's financial obligations under the agreement. Moreover, AG Wahl emphasises that the 'significant imbalance' between the rights and obligations of the parties is not to be assessed by reference to developments subsequent to the conclusion of the contract which are outside the seller or supplier's control and which could not have been anticipated. 

We have reported earlier on transparency and 'core' terms in credit contracts in foreign currency; see our blog on Kásler (C-26/13).

Also, this blog's founder Joasia Luzak is organising a symposium on various issues of transparency in consumer protection on 27 June 2017 in Exeter; see the announcement

Tuesday, 2 May 2017

"Transparency: where art thou in consumer protection?" - save the date: June 27

Dear readers,
I will be organising a 1-day symposium in Exeter on Tuesday, June 27th devoted to discussing various issues of transparency in consumer protection. Details will follow, but please do put it in your calendars already if you'd like to attend.
With best wishes,
Joasia

Monday, 1 May 2017

No more "subscriptions with free smartphone" for Dutch consumers?

Have you bought your smartphone from a shop or are you one of the many consumers who choose to go for a plan+device package from a telecom provider?

In the second case, under a recent Dutch law you would have to show your creditworthiness in case the cellphone included in the package is worth more than 250 euros. 

In 2014, the Supreme court of the Netherlands decided that these combined contracts are to be legally characterised as loans, and that therefore the authorities competent for supervising financial institutions should also make their prudential rules applicable to telecom companies. 

For instance, it must be made clear for consumers how much of the monthly subscription price is due for the actual plan and how much goes to paying back the device sold in installments with the package. Additionally, the usual notice "watch out: borrowing money costs money" will have to accompany all promotional images advertising the packages offered. 

For some consumers, this may mean that they will in practice not be able to enter plans that would previously have been available to them. Consumer associations, however, seem to have been in favour of the novelty.