Facebook and Twitter continue to defy EU consumer protection rules

With the increasing popularity of often American-based social media companies in Europe, consumer organisations and consumer authorities started paying more attention to their compliance with European consumer protection rules. BEUC, motivated by complaints and reports from national consumer organisations, conducted a study in 2014 on the compliance of Google, Facebook, Twitter, Dropbox (see the article by M. Loos and J. Luzak, Wanted a bigger stick...), which showed that many of the then-used standard terms and conditions could be questioned as to their fairness. In March 2017 a dialogue took place between social media companies and European legislator, in which the Commission asked for certain changes to be introduced to terms and conditions of these companies, to make them more compliant with EU law (see our previous post on Commission provides a bigger stick...).

Whilst certain T&Cs have been adjusted, eg. consumers are no longer asked to waive their mandatory EU consumer rights (which waiver would not have been valid anyways, but could mislead consumers into thinking that they had lost these rights, like the right of withdrawal) or they can file a claim with a court of their domicile rather than in California (again, term that would not be upheld), the changes are still deemed insufficient (Social media companies need to do more to fully comply with EU consumer rules). The European Commission specifically identifies only partial compliance by Facebook and Twitter with the need to properly inform consumers about content removal or contract termination, and how they regulate their liability. For the full table with compliance assessment see here.

This enforcement action has already lasted a long time, considering that online T&Cs can be changed with a click of a few keys, don't need to be reprinted, etc. There is, therefore, no excuse for social media companies as to the need to prepare these changes administratively. The Commission has been patient, but, perhaps, it is time to stop being lenient and providing these companies with additional opportunities for remedial action and instead to start issuing some incentivizing penalties, instead.

Commission provides a bigger stick: social media companies to comply with EU consumer protection

This week the European Commission and EU consumer authorities met with representatives of social media companies (Facebook, Twitter, Google+) to discuss how they could adjust their practices in order to comply with EU consumer law. The main areas of concern, many times previously flagged by concerned consumers, authorities and scholars (see e.g. my article written together with M. Loos, "Wanted: a Bigger Stick. On Unfair Terms in Consumer Contracts with Online Service Providers") pertain to unfair terms and conditions used by these companies, as well as fraud and scams used to mislead consumers while they use social networks (The European Commission and Member States consumer authorities ask social media companies to comply with EU consumer rules).

The Commission identifies, among others, the following as unfair/illegal terms :

• Social media networks cannot deprive consumers of their right to go to court in their Member State of residence;
• Social media networks cannot require consumers to waive mandatory rights, such as their right to withdraw from an on-line purchase;
• Terms of services cannot limit or totally exclude the liability of Social media networks in connection with the performance of the service;
• Sponsored content cannot be hidden, but should be identifiable as such;
• Social media networks cannot unilaterally change terms and conditions without clearly informing consumers about the justification and without given them the possibility to cancel the contract, with adequate notice;
• Terms of services cannot confer unlimited and discretionary power to social media operators on the removal of content.
• Termination of a contract by the social media operator should be governed by clear rules and not decided unilaterally without a reason.

Furthermore, consumer authorities require 'a direct and standardised communication channel' so that they can signal to social media companies whenever they notice fraud (e.g. fake promotions) and scam practices (e.g. involving payment taken from consumers) misleading consumers. Content resulting from such practices should then be taken down and consumer authorities should be informed about the identity of traders who introduced such practices.

This request made of social media companies is a result of the action taken by the Consumer Protection Cooperation (CPC) Network of national consumer authorities, under the lead of French consumer authority (see common position of CPC Network here), which identifies as unfair contract terms many of the terms that M. Loos and me have analysed in our article.

Press digest

Press digest

Sharing economy

Euractive reports (see here) that the European Commission delayed the publication of its guidelines on sharing economy from March until mid-2016. The guidelines are expected to clarify the legal position of the online platforms and the scope of application of the Services Directive, the E-Commerce Directive and consumer acquis. The legal position of online platforms is also currently being evaluated by the CJEU in two cases concerning Uber (see C-434/15 and C-526/15).

Social Media

Facebook is under investigation in Germany for the potential abuse of its dominant position in the social networking area that would consist of gathering excessive amount of data from its users, without giving them a choice to use the service otherwise (see here and here). The standard terms and conditions of Facebook could thus also be challenged, in this respect, as unfair.

Also Tinder's practices have been questioned by consumer organizations, in countries such as Norway, Slovenia, the Netherlands. Tinder's T&Cs reserve the right for the company to repurpose user-generated data even after the account is deactivated (permanent deletion is impossible!) by the user. This data could include even personal photos. Other terms in the Tinder's T&Cs would also fail the unfairness test under the Unfair Contract Terms Directive (e.g. setting the US Texas law as the applicable law). (see here)

Healthy food

At a conference in Amsterdam, most MS and some stakeholders agreed to work together to further reduce salt, saturated fat and sugar content in food products (see here).

Within the EU Parliament MEPs have endorsed in the plenary new fruit and milk scheme. The existing milk scheme for schools will be enriched by new rules on fruit and vegetable. The aim is to increase school children access to fresh products, as well as to improve their education on healthy eating (see here).

David vs. Goliath

Collective proceedings in form of a so-called “Sammelklage” have recently been initiated against facebook in Austria alleging a number of data protection violations (see writ). Law student Max Schrems who acts as the plaintiff in the test case brought together 25,000 claimants. He seeks injunctive relief and alleges individual damage of 500 euros. The claim is of a hybrid nature: The European provisions on data protection apply whereas the compensation claims have to be assessed according to the law applicable in California (as specified in Facebook’s terms and conditions). The case is financed by a German process financer, which – if successful – is entitled to 20 % of the proceeds. The remaining amount less the litigation costs would be distributed to the participants.

The case was closed at the first hearing before the Regional Civil Court Vienna (“Landesgericht Wien”) on 9^th April which dealt with admissibility matters of the case. The judgment is expected for May.  

For further information please follow this link. Finding a working format of collective actions in Europe is a pending matter. Recently France, Belgium and Lithuania have introduced new proceedings of such kind.

Once upon another time

Times are changing, also in the digital world. An infograph, made by Best Education Sites, gives a nice overview of the development of the Internet over the past 10 years.

Click here for the full graph. For a collection of informative pictures on a variety of topics, see also Infographic Directory.

Brave new world

What would your great-grandmother have thought of you checking your mailbox thirty times a day, commenting on your friends' holiday photos from the other side of the world, or reading the news while talking or walking? Writing about the legal aspects of the use of digital content by consumers has certainly raised my curiosity and awareness of the way we use technology nowadays. While today's digital environment offers almost unlimited possibilities for socialising, working, learning and communicating, it seems that the consequences of the use of technology on daily life are still difficult to assess. 

An interesting view on the impact of the digital world on creativity, communication and learning of different generations can be found in Larry D. Rosen's book 'iDisorder: Understanding Our Obsession with Technology and Overcoming Its Hold on Us'. He analyses the different ways that people from different generations make use of technology, looking into both its positive and negative influences on social relationships.

The following interview nicely summarises the main insights presented in the book (and gives some good reasons for, after watching it, going out to meet your friends for coffee...in real life):

Protecting minors' privacy in social networking

As part of the Digital Agenda, the European Commission aims at enhancing consumers' trust in the Internet. One way to do this is, would be by reviewing protection of minors online from such risks as grooming (some child abusers will pose as children online and make arrangement to meet with them in person) or cyber-bullying (using the Internet to harm other people in a deliberate, repeated and hostile manner) (more in: Digital Agenda: social networks can do much more to protect minors' privacy). A report on the Safer Social Networking Principles for the EU focused partially on the protection granted to minors by social networking sites. 

The worrying finds included the following: 

• only 2/9 social networking sites have default settings which make minors' personal profiles accessible only to their approved list of contacts;
• all sites tested allow for anyone to send friend request to minors;
• 6/9 sites allow friends of friends to access directly minors' profiles.

The good finds were, e.g.:

• majority of sites gives youngsters age-appropriate safety information, guidance, etc.;
• all sites provide shorter and more child-friendy version of their Terms of Use or Service.

Your face tomorrow

Just a brief addition to yesterday's post and a new instalment in the series on privacy & social networking: Facebook has announced it will implement some significant changes in the way users can manage their privacy settings. This way, it is aimed to give users more direct control over whom they share the items they post with.

Facebook's vice president does not confirm suggestions that the adaptations may be related to possible preparations to make the social network available to children under 13. In this context, worries had been expressed concerning the protection of children's rights online (see also an earlier post on the EU's initiatives to protect children's fundamental rights).

The new privacy settings will be made available from 25 August onwards.