AG Campos Sánchez-Bordona's opinion on Orange Polska (C-628/17): Signing a contract with the courier present can be undue influence under UCPD

On 30 January 2019, the AG Campos Sánchez-Bordona's opinion on case C-628/17 Orange Polska has been published. This is a case of great significance as it is the first one clarifying the meaning of aggressive practices and especially undue influence under the Unfair Commercial Practices Directive (UCPD). In the last year there has been a growing interest in aggressive practices with this being the second case on aggressive practices, following the judgment on Wind Tre, after the Directive being in force for more than 10 years. It is not clear why this is happening now, yet it is a welcome development. Perhaps it is telling that both these cases concern telecommunications companies.

Facts of the case

Orange Polska is a Polish telecommunications company which concludes service contracts with consumers through their website, using the following stages (the opinion also mentions sales via phone, yet the stages listed are relevant only for online sales):

1. Consumer’s visit to the website of the company where he can get informed on the offers of the company as well as access the standard forms.
2. Choice of product.
3. Send an order. What is highlighted about this is that the consumer does not consent to any statement that he has read the terms and conditions at this stage.
4. The order is executed with the courier service employee bringing the standard form contract to the consumers, along with any other appendices to sign.
5.  Contract is concluded when the consumer signs the contract and the declaration that he has reviewed all the documents is handed to him and he accepts their content. The signing needs to take place while the courier employee is there, otherwise the consumer needs to go to a physical shop or place a new order online.
6. The contract is activated.

Stage 5 of the ones listed above is the problematic one, especially the aspect that consumers have to sign the documents in the presence of the courier employee, meaning they might be pressured into signing without having the opportunity to review the documents in detail. That was the view of the Polish regulator who found the practice to be harmful to the collective interests of consumers. This administrative decision was disputed in the Warsaw courts with the decision being cancelled in the first instance only to be reinstated by the Court of Appeal. 

Referred questions

Finally the case reached the Supreme Court of Poland, which referred the following questions:

The Court asked whether the practice in question, where in order to conclude a telecommunication contract the consumer has to make the final decision in the presence of the courier employee who is handing him the contract terms, should be considered an aggressive practice with the use of undue influence, according to art. 8 and 9 UCPD.

The referring Court goes on to discern different scenarios the practice can be characterised as aggressive:

1. Always when the consumer has not been able to be informed of the content of the terms during the visit of the courier employee without hindrance.
2. Only when the consumer has not received the full terms in advance individually before the visit of the courier employee, even though he had the chance to access them online.
3. Only when from it can be deduced that the business is engaging in unfair practices aiming at impairing the freedom of choice of the consumer thereby causing him to take a transactional decision he otherwise would not have taken.

AG opinion

The decision on whether a practice is aggressive needs to be made taking into account all of its features and circumstances, as stated in art. 8 UCPD.

The phrasing used in the referred questions is contentious, such as the use of the word ‘always’. As the AG clarifies, only the practices included in ANNEX I of the Directive are meant to be always unfair. Given that the practice in question is not one of the blacklisted practices, then it cannot be said to always be unfair. (para. 42)

Sometimes classified as aggressive

One of the arguments put forward by the Orange Polska is that the practice cannot be characterised as using undue influence as it did not make use of illegal influence. The AG Campos Sánchez-Bordona in his opinion rejects this restrictive interpretation of the term ‘undue influence’ and states that undue influence is the influence which, regardless of its legality, leads in an active way, through the use of pressure, to the manipulation of the will of the consumer (para 45).

In order to decide whether the particular practice was aggressive, three relevant factors are listed. The AG correctly states that the weight placed on each of these factors will depend on the facts. Each one of these factors may be able to establish the aggressive character if it is intense enough, or there may be a need to combine the presence of all three to find the practice aggressive (para 53).

These factors are listed in para 52 of the opinion:

1. If the behaviour or the actions of the employee of the company are especially pressuring or aggressive.
2. If the consumer received in advance limited, fragmented or partial information or information that does not correspond to the one provided later by the courier employee. This element is enough to establish a misleading action or omission (as per art. 6-7 UCPD) and possible undue influence.
3. Finally, other unfair actions of a different nature would suffice, according to their potential for influencing the will of the consumer to amount to undue influence.

Relevant factors

While the facts are to be determined by the national court AG Campos Sánchez-Bordona is offering a helping hand by providing a list of relevant factors for deciding when a practice is aggressive.

The AG distinguishes between sales via phone and sales via the internet, as the circumstances call for a different approach.

In online sales, usually the consumer chooses to visit the website of the trader and nothing stops him from taking time to consider the different offers and terms. Conversely, on the phone, there is often an element of surprise and the consumer is passive (para 57).

Furthermore, there is a different average consumer in the two instances (para 58). The average consumer shopping online is considered to have a minimum level of familiarity with online processes and the ability to handle them at least until placing an order. On the other hand, the average consumer of phone sales may be less circumspect and well-informed and therefore in need of greater protection. The rationale for that is that it is easier to reach that consumer on the phone, as all that is needed is to take a call.

Also, the quality of the provided information is important, as one of the important features of aggressive practices are that they limit the freedom of choice of the consumer, as stated also in Wind Tre case (para 59). Since this is only the second case on aggressive practices ever, and AG Campos Sánchez-Bordona was involved in both, there is a frequent mention of the remarks made in Wind Tre (see the previous post on that case here).

It is essential that consumers are informed of the terms prior to the conclusion of the contract, as that is how they decide whether to commit to the contract. The AG Campos Sánchez-Bordona states that ultimately, there is a disparity between the information provided in online and phone sales with the information in the latter one being of a lower quality (para 62).

The important question is here whether the timing of the provision of information, in this case in the presence of the courier employee is enough to make the consumer take a transactional decision he would not have taken otherwise. This may be the case particularly if the consumer has doubts on whether the information provided by the courier employee is the same as the one they read online or were given by phone (para 66). This issue is exacerbated by the fact that the courier employee is not in the position to answer any questions on that matter and dissolve their doubts.

The behaviour of the courier is key in determining whether the practice would be aggressive. Every measure needs to be taken to alleviate any psychological pressure to the consumer to sign. This can be achieved by the employee not insisting that the consumer signs on the spot. Should the courier employee be linked to the trader (which was not the case here), there is a higher standard to adhere to as they should be able to answer questions. Furthermore, they should not imply that if the consumer does not sign they might face a penalty or less favourable terms in the future and should offer to visit on another day to allow consumers to read the terms in their own time (para 72).

These suggestions do not so much list what would classify as aggressive behaviour but rather what wouldn’t.

Conclusion

This is the most detailed interpretation of what constitutes an aggressive practice in the case law of the ECJ. It is a sorely needed guidance, going beyond the phrasing of art. 8-9 UCPD, which would assist regulators and traders. It reflects the difficulties in defining aggressive practices to the extent that they are tied to human behaviour. It remains to be seen whether the ECJ in its judgement will follow the AG’s opinion and how they will interpret the meaning of undue influence.

More bad news for Google on the data protection front: Polish NGO files a complaint

Last week we reported about a decision of the French Data Protection Authority - the CNIL - imposing a €50 million fine on Google for alleged infringement of the European data protection rules. This, however, does not seem to be the end of Google's headaches. Earlier this week, a Polish NGO - Panoptykon - filed a complaint against the company with the President of the national Personal Data Protection Office.

Besides the complaints' addressee the two cases do not seem to have much in common. As a matter of fact, Google is not the only entity against which Panoptykon complained. A separate complaint was lodged against IAB Europe, an industry association in the field of interactive marketing. Both complaints concern the functioning of the market for online behavioural advertising, in which, according to Panoptykon, IAB and Google are key players.

The developments in Poland are a direct follow-up to the two complaints lodged last September in Ireland and the UK by Brave ("a privacy-focused web browser" set up by Mozilla's co-founder Brendan Eich) and Open Rights Group. Their focus remains on the real-time bidding (RTB) system used in the advertising market, which the applicants believe to infringe General Data Protection Regulation on at least several counts (for a rough explanation of the system see a video uploaded by... the IAB itself; further reference can be made to a report by Johnny Ryan of Brave). Key arguments of the complaining organisations concern the lack of a valid legal basis, including for the processing of sensitive data, failure to ensure data security, and the lack of appropriate control tools for data subjects (e.g. to verify and correct their marketing profiles).

Not surprisingly, Panoptykon's campaign has met with animated reactions. The President of IAB Poland drew a parallel to complaining against "a car producer for [producing cars] having technical abilities of breaking traffic rules, like exceeding speed limits or parking in restricted areas". He recalled the Transparency & Consent Framework created by the association with the aim to "help the businesses [involved in the ecosystem] to comply with applicable law". He also insisted that the RTB system is by no means "directed" by IAB Europe. Panoptykon, on the other hand, described the association as a "standard-setter" who, sticking to the traffic metaphor, "laid down the rules to be followed on its private roads in a way that makes it impossible to drive safely". 

All eyes are now on the Polish DPO, who is widely regarded as an expert in the field. Panoptykon encourages the authority to engage in a joint operation with its British and Irish counterparts based on Article 62 of the GDPR. Thus, similarly to the French proceedings, the commented case seems like an important test for the GDPR's procedural framework.

Disclosure duties versus freedom to conduct a business: CJEU partially departs from AG's opinion in C-430/17 Walbusch Walter Busch

Today, the Court of Justice issued a judgment in case C-430/17 Walbusch Walter Busch, concerning the interpretation of certain provisions in the Consumer Rights Directive (2011/83/EC, CRD). The judgment sheds interesting new light on the limits of disclosure duties under the said Directive, balancing consumer rights with the traders' fundamental freedoms.

Facts of the case

As we reported in the previous post about AG's opinion, what led to the dispute in the case at hand was an advertising leaflet distributed by Walbusch in several magazines. The leaflet contained a detachable mail order coupon and, next to the advertising space, presented a quantum of the relevant pre-contractual information - including on the existence of a right of withdrawal. The leaflet did not elaborate on how and under which conditions the right of withdrawal could be exercised - all details being available on the seller's website, whose address was mentioned in the leaflet. 

A German consumer organisation, Zentrale zur Bekämpfung unlauteren Wettbewerbs Frankfurt am Main eV, sought an order to prevent the leaflet's dissemination, complaining that the respective material did not include sufficient information on the right of withdrawal, nor did it include a standard form through which consumers could exercise such right. Both extensive information and the model form must be provided to consumers before the conclusion of a distance contract under Article 6 (h) of the CRD.

Under the same Directive, certain required pre-contractual information may be omitted when the means of distance communication involved in the contract provide for limited time or space. The questions the Court had to answer, in this context, were as follows:

1) how should national courts assess the question whether in a certain case the means used do, indeed, provide for limited space?

2) should it be ascertained that, in a certain communication, space was indeed an issue, what are the consequences? In particular

• does limited space mean that traders can just mention the existence of the right of withdrawal, without including any information on the contents and exercise of that right?
• does limited space mean that the model form through which consumers may (but by no means must) exercise the right of withdrawal can be omitted in this communication?

Judgment of the Court

Limited space

As to the first question, the referring court mentioned two possible approaches: either considering whether in abstracto a certain means of distance communication allowed for limited space, given its nature; or assessing whether the concrete instrument chosen had enough space for providing all information without being deprived of all utility for the trader. In the first case, the "type" of instrument - eg paper vs. mobile phone screen - would count; in the latter, courts would decide on a case-by-case basis. The readers may recall that AG Tanchev sided with the former view.

The CJEU, however, followed a somewhat different path. According to the Court, a limitation of time and space falling within the scope of 8(4) of the Directive can occur "as a result of either the inherent characteristics of the means concerned or limitations arising from the trader’s economic choice relating, in particular, to the duration and space of the marketing communication" (para. 38, cf. para. 62 of AG's opinion). The relevant assessment must be carried out "having regard to all of the technical features of the trader’s marketing communication". This suggests that the trader does not necessarily need to increase the size of a paper leaflet purchased, up to the point he is able to provide consumers with full information required under Article 6(1) of the CRD. An assessment should rather be made with respect to the type (size etc) of the leaflet chosen, without regard, however, to his specific choices on the development and use of the available space and time (para. 39).

The readers may also recall an interesting reference to vulnerable consumers in AG's opinion. Specifically, the Advocate-General argued that "advertising media produced in traditional forms of communications ... are often directed at societal groups, such as older people, who are unaccustomed to going to the internet to acquire access to the supplementary terms of the contract proposed" (para. 73). The Court did not entirely ignore this part of AG's reasoning, but considered it to be of a somewhat different relevance. More specifically, so the Court, an assessment from the point of view of the "average consumer targeted by the communication" should be carried out to establish whether, having regard to the space and time occupied by the communication and the minimum size of the typeface which is appropriate for such (potentially vulnerable) consumers, all information set out in Article 6(1) of the CRD may objectively be displayed.

Should this not be the case, the trader would be required to only disclose in the communication the minimum set of information laid down in Article 8(4) (e.g. about the right to withdraw - see below) and provide consumers with other mandatory information by another source in plain and intelligible language.

Overall, given the need to balance the importance, for consumers, of getting all the relevant information and, for traders, the ability to make use of distance communication mechanisms without disproportionate limitations, the court ruled that

"the assessment of whether, in a specific case, the means of communication allows limited space or time to display the information, in accordance with Article 8(4) of Directive 2011/83, must be carried out having regard to all of the technical features of the trader’s marketing communication; in that regard, it falls to the national court to ascertain whether, having regard to the space and time occupied by the communication and the minimum size of the typeface which is appropriate for the average consumer targeted by that communication, all the information set out in Article 6(1) of that directive may objectively be displayed within that communication."

Limited information duty

The second question concerned the precise scope of the limited disclosure duty. In that regard, Article 8(4) specifies that at least "pre-contractual information regarding ... the right of withdrawal" should be provided in the original communication.

Also in this respect the Court sought a balanced solution (this time in line with the response proposed by the AG in the alternative). In particular, the Court required not only information about the existence of the right to be provided to consumers beforehand, but also about "the conditions, time limit and procedures for exercising the right of withdrawal" (para. 46). The trader, however, should not be required to provide the model withdrawal form in his original communication. In that respect, it suffices to provide that model form by another source, in plain and intelligible language.

Concluding thought

In the commented judgement, the Court clearly tries to find a balance between a high level of consumer protection and the competitiveness of undertakings, or else Articles 38, 11 and 16 of the EU Charter of Fundamental Rights. Less restrictive interpretation from the perspective of the traders (compared to the one proposed by the AG) is not unfounded; also the scope of information about the right to withdraw to be provided to consumers within and outside the original communication is understandable. One could nonetheless argue that still more attention could have been devoted to the needs of vulnerable consumers, particularly as regards the communication of other mandatory information by another source. On the positive side, the Court makes sure that vulnerable consumers receive at least minimum information in a way that they are able to process it. As regards the remaining part of information, the judgment (and the CRD) merely underlines that it's provided elsewhere "in plain and intelligible language". It would not have been a very long stretch, perhaps, to also require such information to be communicated via a means appropriate for the average consumer targeted by the original message.

Candida Leone contributed to this reporting.

Conference announcement: "The Transparent Trap: Disclosing Information to Consumers"

The Centre for the Study of European Contract Law at the University of Amsterdam, SRH Hochschule Berlin and University of Exeter are organising together an international, interdisciplinary conference "The Transparent Trap: Disclosing Information to Consumers" on 4-5 July in Amsterdam. 

The aim of the conference is to go beyond the discussion of the principle of transparency as a legal instrument often used by European and national legislators to guarantee consumer protection. Whilst the first conference sessions will focus on the transparency requirements and limitations of disclosures to consumers, the following sessions will examine practical possibilities of providing transparent and simplified (pre-)contractual disclosures, esp. in the online environment. The detailed conference programme will be announced in due time, but for now please see the attached 'Save the Date'-poster, announcing the conference sessions and confirmed speakers.

Speakers at the conference are scholars of: public and private law, communication science, linguistics, contract innovation. This event facilitates, therefore, an interdisciplinary debate on how to further improve disclosures. We are warmly inviting anyone interested in the topic (from whichever angle/discipline, academia/public or private sector) to join us in July in Amsterdam!

The conference attendance is free of charge (incl. lunch on Friday), but registration is necessary (and due to the limit of space, if you are interested, please register as soon as possible). The registration details may be found on the poster.

€50m fine imposed on Google by the French DPA

Just several days ago we reported about two opinions of Advocate-General Szpunar in cases involving the French data protection authority - Commission for Information Technology and Civil Liberties (CNIL) and the US digital giant Google. We mentioned that both cases concerned the interpretation of the Data Protection Directive, the predecessor of the currently applicable General Data Protection Regulation. Earlier today the CNIL issued yet another decision, once again directed against Google, this time blazing the trail for the application of new data protection rules.

The decision, imposing a 50 million euro fine on GOOGLE LLC, is bound to raise both substantive and procedural questions. Unlike previous cases, which primarily focused on the right to be forgotten, the decision issued today concerns the alleged "lack of transparency, inadequate information and lack of valid consent regarding the ads personalization". Indeed, the GDPR has further specified the data controllers' transparency obligations, the requirements for a valid consent and the data subjects' information rights and has backed them by effective sanctions. The emerging case practice clearly illustrates the growing importance of data protection law for the protection of consumer interests in the digital age. The GDPR-based complaint filed by several European consumer organizations concerning Google's practices of location tracking, on which we reported last November, further exemplifies this trend.

On the procedural side, the question may arise whether the French DPA was at all competent to deal with the case considering the "one-stop-shop mechanism" introduced by the GDPR. The CNIL seems to argue that the mechanism was not applicable in the present case due to the lack of Google's main establishment in the EU. Considering the growing interests in the company's data processing practices across the European jurisdictions, Google's appeal against this finding would be anything but surprising (update: an appeal has in the meantime been confirmed). Incidentally, in the 'location data' case, the respective complaint had been lodged with the Norwegian DPA, highlighting the relevance of the matter for the whole EEA.

Full text of today's CNIL decision (in French) can be consulted here.

Price transparency: new US rules show the way (not)

As information disclosures and transparency are a frequent theme on this blog, our readers may be interested in a recent development in US healthcare.

As of January first, 2019, all hospitals providing health care in the US had to publish a list of all their charges - including for drugs, instruments, ancillary services and so on. The result of this, according to reporting by the New York Times, is that hospitals have published online spreadsheets with thousands of items, described in classically obscure ways. For instance,

 "Baptist Health in Miami helpfully told consumers that an “Embolza Protect 5.5” would cost them $9,818 while a “Visceral selective angio rad” runs a mere $5,538." 

Next to being difficult to understand in and of themselves, the prices shown are in most cases not what individual consumers would actually have to pay - either through insurance or as private customers. 

Bulk disclosure of this kind has been the object of intense criticism for at least a decade. In particular, Omri Ben-Shahar and Carl Schneider have discussed the counterproductive effects of disclosures in healthcare in their book More than you wanted to know: the failure of mandated disclosures.  

A New Deal for Civil Justice? The New Deal for Consumers and the Justiciability of EU Consumer Rights

The Centre for the Study of European Contract Law (CSECL) holds its annual conference on Thursday 11 and Friday 12 April 2019 at the University of Amsterdam.

The 2019 CSECL conference revolves around the New Deal for Consumers that was proposed by the European Commission on 11 April 2018. It focuses on issues of civil justice that the New Deal aims to address – and, crucially, the question it appears to raise. A particular focus will be on the interaction and tension between different functions of enforcement mechanisms in consumer law, as well as the public and private interests involved at different levels. What or whom is the New Deal for?

For the provisional programme, click here. 

The conference will bring together researchers and practitioners interested in (the future of) European private law, civil procedure, consumer law and, possibly, others with a more general interest in the enforcement of EU law and EU constitutional law.

Keynote speakers:

• Prof. Colin Scott, University College Dublin
• Dr. Eva Storskrubb, Uppsala University

AG Wahl on 99/44 Directive: if it looks like the right place, it is the right place (C-52/18).

Today, AG Wahl delivered his opinion in case C-52/18, concerning the 1999 directive on consumer Sales and associated guarantees (1999/44/EC). The Directive harmonises the remedies available to consumers in case goods they have bought turn out to be of disappointing quality, by making sellers liable for the good's non-conformity. In contrast to more recent instalments in EU consumerist legislation, the 1999 Directive mainly addressed high street sales. The huge growth of e-commerce over the past decade has, then, if anything caused less trouble so far than one may have expected. 

However, in the case at stake, the limits of the Directive in the field of online sales are highlighted - even though the contract in this case had been concluded over the phone... According to the Directive's article 3.3, 

Any repair or replacement shall be completed within a reasonable time and without any significant inconvenience to the consumer, taking account of the nature of the goods and the purpose for which the consumer required the goods.

The article is mute on where the repair should take place. Article 3.4 is clear that remedies should be effected free of charge, including without requiring the consumer to incur shipping costs.  But what if the consumer were able to return the goods in person? 

The dispute before the Court of Justice concerns a large party tent. The dispute before the concerned German court hinged on whether the consumer should have brought the allegedly non-conform good to the seller's premises, or whether making the tent available at his own home was sufficient. 

AG Wahl first considers whether the question of where the tent should be made available is covered by the requirement that remedies be offered free of charge. While the answer to this question is not an obvious one, the AG considers the two alternative requirements - that the remedy take place within reasonable time and without significant inconvenience for the consumer - to offer more promising interpretive avenues. 

In essence, AG Wahl uses the two requirements to build one larger argument: the appropriate place for offering the goods is the one that, in the circumstances of a given case, allows for timely repair or replacement, without significant inconvenience for the consumer. It follows that it will be for the courts invested with a specific dispute to ascertain whether, in that case, the consumer could be required to do more than make the good available at their home. 

In particular, the AG notes, the question mainly arises

for goods purchased by distance selling. In the case where the consumer bought the goods at the seller’s place of business and, moreover, the goods do not require specific installation, it can, to my mind, be assumed that the making available of the goods at the seller’s place of business does not constitute any significant inconvenience to the consumer.

Besides the fact that this last consideration may be openly in contrast with the substance of Weber and Putz, the very broad interpretive exercise carried out by AG Wahl seems less straightforward than, for instance, the alternative option of considering the question to be included in the "free of charge" requirement. The AG seems to be more keen on preserving the balance of rights and duties that he considers to be the aim of the Directive (see the remarks at paras 34-45) than on carrying out rigorous interpretation. Admittedly, however, the results of the more straightforward avenue suggested above would be very far reaching - perhaps exceedingly so. 

The answer suggested by the AG here, additionally, seems to open up to a great degree of uncertainty. This may not be a big problem for national courts, who may well be used to working with open norms, but may not be a particularly desirable state of things from the point of view of harmonisation. One more consideration to be taken into account in the process of recasting the 1999 Directive. Unless, of course, the Court will come up with an answer that avoids the shortcoming of both the avenues discussed. As usual, stay tuned!

ESMA recommends tailored regulation of crypto-assets to secure investor protection

Fulfilling its obligation from the FinTech Action Plan (on which we reported here), last week the European Securities and Markets Authority (ESMA) published a recommendation for EU law and policy-makers for closing the regulatory gap on crypto-assets.

Crypto-assets are a type of private asset that depends primarily on cryptography and Distributed Ledger Technology. There are a wide variety of crypto-asset, their number is currently estimated to be around 2000. They range from  crypto or virtual currencies like Bitcoin, to so-called digital tokens issued through Initial Coin Offerings (IPOs) that allow businesses to raise capital for their projects, by issuing digital tokens in exchange e.g. for crypto-currencies. Consumers thus may use these assets as investment or as a means of payment, or both if the asset has hybrid features.

Crypto-assets are relatively new and the market is evolving, and poses challenges for regulators and market participants. In cooperation with National Supervisory Authorities, ESMA revealed that the current regulatory framework including MiFID with the rules on investor protection is either difficult to apply to these assets (and how the regulatory framework is applied may be vary between between Member States) or that it cannot be applied at all.

From a consumer protection perspective, these are risky instruments where protection is especially needed. Consumers are likely to have insufficient understanding of the risks involved in the transaction, especially the value of the investment, for example, how the price of the asset is going to change and how likely it is that the underlying project for which the investment is made in case of IPOs is likely to be successful. And then there is also the problem of the reliability of trading platforms. While some of these risks are pertinent to other consumer transactions, they are exacerbated here due to the nature of the products (as being highly abstract, diverse and subject to fast innovation), and to the regulatory gap. The additional practical problem is that consumers may not easily distinguish between those assets that are within the rules are those that are outside the scope of the regulatory framework.

To overcome the current regulatory gap and to ensure a consistent approach, ESMA calls for a special regulatory regime tailored for crypto-assets, that would ensure adequate information disclosure and enable consumers to make informed decisions. While information rules would certainly be helpful, we must urge EU law and policy makers to also consider more intrusive forms of regulation such as product regulation should this prove necessary to provide effective protection for consumers. At least, national legislators/regulators should be empowered to impose limits on product design e.g. price cap. Is opting for more intrusive regulation (or at least a balanced approach between information and product regulation) a preferred regulatory route compared to a mixture of more relaxed information rules with an option of banning products from the market when things get out of control (on which see here)? What do you think?

Two opinions of AG Szpunar on the right to be forgotten

Last week also brought new developments regarding the interpretation of the right to be forgotten - a widely discussed right of data subjects developed by the Court of Justice in its earlier jurisprudence (see our 2014 post Google as data controller...). More specifically, Advocate-General Szpunar delivered his opinions in the two pending cases: C-136/17 G.C. and Others v CNIL and C-507/17 Google v CNIL. Just like Google Spain, both cases relate to Directive 95/46/EC on the protection of individuals with regard to the processing of personal data and on the free movement of such data (and not yet the General Data Protection Regulation). Both are also concerned with the scope of search engine operators' obligation to respond to de-referencing requests by data subjects. 

Background of the cases

Both references of the French Conseil d’État pertained to disputed decisions of the national data protection authority (Commission for Information Technology and Civil Liberties, CNIL). The setting of each case was nevertheless quite different. In C-136/17 the CNIL refused to take measures against Google for failing to de-reference various links from search results and the affected data subjects complained about inaction. In C-507/17, by contrast, the search engine provider contested the sanctions imposed by the authority.

AG's opinions

The opinions presented last Thursday by the Advocate-General Szpunar shed light on several important aspects of the right to be forgotten: 1) the role of search engine operators in relation to sensitive data, 2) the nature of the respective obligation to respond to de-referencing requests, and 3) territorial reach of required de-referencing measures.

Processing sensitive data by search engine operators

As readers may recall, one of the controversial elements of the 2014 Google Spain judgment was the qualification of search engine operators as data controllers. This implied that the processing of personal data in the course of relevant activities needed to be authorized under one of the legal bases set out in the Directive. While the broader implications of this finding may not have been immediately apparent in the case of non-sensitive data, the picture became more complex as soon as special categories of data (e.g. about religious or philosophical beliefs) came into play. One of the questions asked in G.C. and Others was thus whether the prohibition of processing data falling within certain specific categories also applied to search engine operators.

The Advocate-General sought a balanced solution. He essentially replied in the affirmative, but observed that specific responsibilities, powers and capabilities of search engine operators should be taken into account as part of the interpretation. In particular, it was recognized that the processing carried out by such entities is secondary in its nature (an argument Google already tried to advance in the 2014 case). Hence, according to the AG, prohibitions and restrictions set out in the Data Protection Directive could only apply to an operator of search engine by reason of his referencing activities (searching, finding and making information available in an efficient way). Ex ante control of referenced web pages, which - so the AG - is covered neither by the responsibility, nor by capabilities of search engine providers, should therefore be excluded. Consequently, also with respect to sensitive categories of data, the primary focus remains on ex post verification of de-referencing requests, which was the subject of remaining questions.

Systematic de-referencing

In respect to the search engine operator's de-referencing duty (as a correlate of data subject's right to be forgotten), the Advocate-General first considered whether search engine operators are obliged to systematically de-reference web pages on which sensitive data appear, as soon as the absence of a legal ground for the processing is established. This matter appears to have divided the intervening parties and certainly needs to be looked at in more detail after all language versions of the opinion are available. For the time being, it suffices to report that, in view of the AG, an operator of a search engine should generally be required to accede, as a matter of course (i.e. without regard to elements other than the lack of legal ground), to requests for de-referencing relating to web pages on which sensitive data appear, subject to limited exceptions provided for in Article 8. Notably, however, if the contested processing of personal data falls within the scope of Article 9 of Directive 95/46, i.e. when the processing is carried out solely for journalistic, artistic or literary purposes, a balancing exercise can be required, possibly resulting in the refusal of de-referencing requests.

Territorial scope

The second of the discussed cases, Google v CNIL, dealt with the territorial scope of de-referencing measures. By way of illustration: in case of a request from a French data subject, should Google only deactivate links on Google.fr, on all EU domains, or on all worldwide domains? Or perhaps such de-referencing should (also) depend on the location from which the search is performed (assessed based on the IP address)? It this respect, the AG decided to put limits on the CNIL's extraterritorial ambitions. In particular, he insisted that search requests made outside the EU should not be affected by the de-referencing of search results. A different (broader) interpretation could, in view of the AG, create significant limitations in access to information, and as such should be approached with caution. Considering the facts of the case, worldwide de-referencing duty did not appear justified.

When it comes to the EU, however, the Advocate-General came out in favour of a rather broad territorial scope of de-referencing. Specifically, according to the opinion, once a right to be forgotten within the EU has been established, the search engine operator should take all measures available to it to ensure full and effective de-referencing within the EU, including by use of ‘geo-blocking’ in respect of an IP address located in the EU, irrespective of the domain name used by the internet user.

Concluding thought

The opinions of the Advocate-General come at a time of a heated debate about the application of the European data protection framework following its recent reform. Both the right to be forgotten and the territorial scope of act have been exhaustively discussed in the legislative process leading to the adoption of the GDPR. As usual, the judgment of the Court of Justice is awaited with interest. This time, however, it will reveal not only whether the CoJ shares the view of its advisor, but also to what extent the interpretation eventually provided affects the framework applicable today.

Status quo on fighting planned obsolescence

Some of our readers might have noticed a news item posted yesterday on the BBC website 'Climate change: 'Right to repair' gathers force'. Despite what the title suggests, consumers of course already have the right to repair a non-conforming good, pursuant to Article 3 of the Consumer Sales Directive. The discussed issue pertains rather to the problem of planned obsolescence, that is: designing goods in a way that they malfunction shortly after the warranty period lapses. This not only causes inconvenience and burdens consumers financially, but is also bad for the environment as it increases the amount of industrial waste (most of the time the goods are impossible or too expensive to repair, so consumers purchase a new replacement product instead). 

This problem has been repeatedly raised in the news, scholarship and on a political scene in the past few years. Are there any solutions coming on the EU level? The BBC article mentions that European environment ministers are planning 'to force manufacturers to make goods that last longer and are easier to mend'. However, the EU Ecodesign Directive, mentioned in the article is already in force for quite a few years and as it is a framework directive, it only defines general principles of ecodesign, without placing any specific, restrictive conditions on the manufacturers. Such specific requirements could be adopted through further implementing measures, i.e. regulations adopted by the European Commission. Some of the implementing measures adopted so far concern sectors such as lighting, televisions and large home appliances (dishwashers, refrigerators etc.). More details on the Ecodesign and Labelling can be found on this portal.

What the BBC article does not mention are the changes proposed to the Consumer Sales Directive in the amended proposal for a Directive on certain aspects concerning contract for the online and other distance sales of goods (COM/2017/0637 final) (we have reported on the general approach being agreed by the Council in December, see: 2019 forecast...). This new measure aims to further prioritise the right to repair of consumers. Draft recital 26 mentions "...enabling consumer to require repair should encourage a sustainable consumption and could contribute to a greater durability of products." So far, the draft text of the new directive does not really reflect this priority though, to the contrary - disposing of the strict hierarchy of remedies might facilitate easier contract's termination. The Council added one beneficial provision though: the goods' conformity will be assessed also on the basis of such goods meeting consumers' expectations as to their durability (see draft recitals 19, 27 and art. 5(1)(c) of the General Approach). Will the Council and the Parliament introduce further changes to the draft proposal in the coming months?

Research Methods in Consumer Law

Our readers may be interested in the recently published book: 'Research Methods in Consumer Law', edited by H-W. Micklitz, A-L. Sibony and F. Esposito. This book aims to critically explore the impacts of different disciplines and methods in consumer law research, with a special emphasis placed on behavioural studies. It consists of three parts: 'Foundations of Behavioural Consumer Legal Research', 'Advances in Behavioural Consumer Legal Research' (with a chapter written by the author of this blog: 'Who Calls the Tune? Stock Taking of Behavioural Consumer Protection in Europe'), 'Insights from Broader Perspectives'. 

There is currently a promotion on Elgar website on the hardback copy (see previous link), but it will also be available soon as an e-book on Elgaronline (where you can also opt to purchase individual chapters).