It is trite but true that online platforms have blurred the lines between the positions of particular market actors. In doing so, they have put the traditional status-based European rules to a test. While the issue itself is not particularly new, the scope of the basic notions such as 'consumer' or 'trader' has attracted renewed attention in recent times. The Commission specifically addressed the interpretation problems related to these terms in its 2016 communication on collaborative economy. Around the same time two preliminary references, related to this very basic distinction as well, were directed at the Court of Justice. The Schrems case, on which the CJEU ruled several months ago (see our post here), provided the Court with an opportunity to clarify the notion of a 'consumer' in the context of social media. Yesterday's judgment in case C-105/17 Kamenova addressed a corresponding matter, namely at which point a person offering goods or services via an online platform can be qualified as a 'trader'.
Background of the case
We already reported on the opinion delivered by the Advocate-General Szpunar in June this year. To recall: the request for a preliminary ruling was submitted by a Bulgarian court adjudicating a dispute between Ms. Kamenova and the national consumer protection authority. Specifically, Kamenova, who had been engaged in the sale of goods via an online platform olx.bg, and had published eight different listings at the same time, did not provide information required by the Bulgarian act on consumer rights, which implemented Directive 2011/83/EU into national law. According to the consumer protection authority, in doing so Kamenova failed to fulfil her duties as a trader and engaged in an unfair business-to-consumer commercial practice. The defendant argued that she did act in a professional capacity and, therefore, her activities fell outside the scope of the invoked legal act.
Judgment of the Court
The Court essentially followed the reasoning expressed by the AG in his opinion. This is true in the following three respects:
Firstly, the Court upheld the view that the concept of a 'trader' used in Directives 2005/29/EC on unfair commercial practices (UCPD) and 2011/83/EU on consumer rights (CRD) had to be interpreted uniformly (paras. 25-29). I will return to that point later on.
Secondly, it essentially repeated the criteria determining the threshold for becoming a trader elaborated by the AG and stressed the need for a case-by-case assessment. In light of the judgment the relevant factors are, among others, whether:
- the sale on the online platform was carried out in an organised manner,
- that sale was intended to generate profit,
- the seller had technical information and expertise relating to the products which the consumer did not necessarily have, resulting in a more advantageous position of the seller compared to that of the consumer,
- the seller had a legal status which enabled her to engage in commercial activities and to what extent the online sale was connected to the seller’s commercial or professional activity,
- the seller was subject to VAT,
- the seller, acting on behalf of a particular trader or on her own behalf or through another person acting in her name and on her behalf, received remuneration or an incentive,
- the seller purchased new or second-hand goods in order to resell them, thus making that a regular, frequent and/or simultaneous activity in comparison with her usual commercial or business activity,
- the goods for sale were all of the same type or of the same value, and, in particular, whether the offer was concentrated on a small number of goods (para. 38).
Thirdly, the Court underlined that the list is neither exhaustive, nor exclusive and, as a consequence, compliance with one or more of the listed criteria is not, in itself, decisive for establishing the seller's status (paras. 39-40).
With regard to the present dispute the Court shared the scepticism of the Advocate-General as to whether Kamenova should be qualified as a 'trader'. While the final assessment was left to the national court, the CJEU made it clear that "the mere fact that the sale is intended to generate profit or that a natural person publishes, simultaneously, on an online platform a number of advertisements offering new and second-hand goods for sale" is not, by itself, sufficient to make such a classification (paras. 40 and 44).
Comments
The judgment does not come as a huge surprise. What is perhaps more surprising is that it comes so late. National courts, including at the highest level (see e.g. the 2008 judgment of the German Federal Court of Justice), have already dealt with similar questions years before. Apparently, however, they did not consider the CJEU's involvement necessary.
The ruling itself does not affect the discretion of national courts in a far-reaching way. Establishing the facts and assessing their respective relevance remains in their hands and continues to be crucial for the final assessment. The comparably broad menu of criteria set out in para. 38 of the Court's judgment could facilitate this analysis to some degree, as can the Court's conclusion that the profit-driven motive and the number of offers are, in themselves, not sufficient to consider someone a 'trader'. It is also worth noting that the Court (once again following the AG) attempted to connect the discussion about determinants of one's status with the consumer law's traditional weaker party protection rationale (paras. 33-34).
A further element of the judgment, which could be of interest to the readers, concerns the uniform interpretation of the notions used in the CRD and UCPD. Following the Advocate-General, the CJEU found that the concept of a 'trader' laid down in both acts was to be interpreted uniformly. To make this observation the Court even reformulated the question asked by the referring court. From the point of view of legal clarity, such an effort should certainly be welcomed.
The reasons supporting the Court's finding are not discussed extensively. Essentially, they concern the correspondence between the wording of both definitions and between the objectives of both acts. We could probably debate to what extent the fact that both directives are based on Article 114 TFEU actually bears out the identity of their objectives, considering how broadly this legal basis came to be used in EU legislation. However, in the present context, the conclusion of the Court seems sound.
One could still wonder in which domains a requirement for a uniform interpretation would not necessarily be fulfilled. A possible candidate is the context considered in the Schrems case mentioned before. Indeed, it has been pointed out in the literature that in the conflict of laws sphere other objectives, such as ensuring procedural certainty, may be of greater relevance than contributing to the "proper functioning of the internal market" and ensuring "a high level of consumer protection". This could explain the apparent discrepancy between the Court's case law on dual purpose contracts (see the judgments from Gruber onwards) and the more recent legislative developments related to this issue (see e.g. recital 17 of the CRD). Notably, neither Rome I, nor Brussels I (bis) regulations are based on Article 114 TFEU.
All in all, the judgment does shed a bit more light on the notion of the trader in the platform economy, but it certainly does not bring an end to the legal uncertainty in this domain. Achieving the latter result, however, does not seem to be a task for the judiciary. Should one wish to address the issue of the problematic boundaries between 'consumers' and 'traders' in online markets more effectively, a legislative solution would be needed. The amendments proposed by the Commission as part of the so-called New Deal for Consumers package represent one of the possible approaches.
* The author carries out a research project on consumer protection in the collaborative economy, financed by the National Science Centre in Poland on the basis of decision no. DEC-2015/19/N/HS5/01557.
