Thursday, 1 February 2018

Time to let go of the services/goods distinction? - CJEU in X (C-360/15 & C-31/16)

In an interesting judgment (X, joined cases C-360/15 and C-31/16) the CJEU has decided to broaden the scope of application of the Services Directive (Directive 2006/123), by encompassing within its scope activities of retail trade in goods, such as shoes and clothing. Traditionally, the sale of goods and the provision of services have been kept separate (hence also different legislative measures are applicable to these two types of commercial activities), even though modern transactions often combine elements of both provision of services and sale of goods. In the internal market of the EU there are also two separate freedoms guaranteeing traders their fundamental rights separately in the area of provision of services and movement of goods. 

Whilst this case is not a consumer law case, it could potentially have implications for the understanding of the provision of services to consumers, as well. The Court interprets in this judgment the definition of a 'service' contained in article 4(1) of the Directive, which states that a service is 'any self-employed economic activity, normally provided for remuneration'. This definition of the service applies under the TFEU providing for the freedom of provision of services as well as under this Directive. Its general notion of economic activity provided for remuneration is easily applicable to retail trade in goods, esp. as the Court points out due to the recital 33, which mentions services provided both to businesses and to consumers, such as distributive trades (paras 89 and 91). Whilst most of the Court's comments clearly refer to a possibility of an autonomous interpretation of 'services', just for the purposes of this Directive, paragraph 95 of the judgment makes a more general statement:

"Any such analysis would, moreover, cause particular difficulties with regard to the retail trade in goods, given that that trade nowadays encompasses not only the legal act of sale/purchase but also an increasing range of activities or services that are closely inter-related and that are intended to induce a consumer to conclude that sale/purchase with one economic operator rather than another, to provide advice and assistance to the consumer at the time of that sale/purchase or to provide after-sales services, which may vary considerably according to the trader concerned."

This comment reflects very well the difficulties that nowadays exist in separating the sale of goods activities from the provision of services, which could justify finally abolishing this distinction and e.g. setting one timeframe for calculating the right of withdrawal or one set of remedies for non-performance, regardless the type of transaction. We can see such overarching provisions in the proposal for a directive for the supply of digital content, but not in the provisions of the new proposal for a directive for the sale of goods (originally, online and other distance sale of goods). Which still states that in case of a mixed contract for the sale of goods and provision of services, the directive should apply only to the part of the contract related to the sale of goods. Is it not the time to let go of the services/goods distinction?

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