Fascinating judgment of CJEU in Tiketa (C-536/20): Intermediaries share responsibility under CRD, Transparency: Cinderella before the ball

The CJEU issued another judgment today in the Tiketa case (C-536/20), which interpreted provisions of the Consumer Rights Directive, focusing on information obligations and the principle of transparency in a pre-pandemic scenario of consumers making expenses to attend events, which they have not been informed had been cancelled. 

A Lithuanian consumer in this case purchased online a ticket to an event from a ticket distributor - Tiketa. Information on the website and on the ticked delivered upon purchase to the consumer let him know that the event organiser was 'Baltic Music', their contact information and that they bear full responsibility for the event. Terms and conditions on the ticket mentioned also that if the event was cancelled, event organiser would be responsible in full for the ticket price. The entitlement to a refund of the ticket price was not contested here, but rather whether consumer could claim further damages and if yes, from whom - event organiser and/or ticket distributor? After all, the consumer made expenses to travel to the event site to only days later receive information about the event's cancellation. 

Traders and persons acting on their behalf

The first question inquired about the application of the notion of a 'trader' from Article 2(2) CRD. Could this notion apply to two subjects in one case scenario: to a trader and a person acting on their behalf, and could it then mean that they both could be held liable by consumers for breach of their obligations? This is a very relevant question in the era of digitalisation, whether we consider digital influencers or online platforms as potentially acting on behalf of traders whose products they promote.

Lithuanian case drew attention to the difference between language versions of the CRD, which could result in intermediaries being considered 'traders' only in some Member States (e.g. France), as others (e.g. Lithuania) recognised a person acting on behalf of a trader as a 'trader' only if they were acting for purposes relating to their own trader, business, craft or profession. Unsurprisingly, the CJEU, following purposive construction rules - supports a broad interpretation of the notion of a 'trader', encompassing also intermediaries (paras 31-32).

More importantly, the CJEU considers that both a trader and an intermediary could be held jointly responsible for the performance of information obligations under the CRD towards consumers, even if they both facilitate provision of the same service. The Court highlights the purpose of CRD as ensuring that consumers are being informed by traders, broadly defined in Article 2(2), rather than by their contractual counterparties. Hence, if a consumer does not receive mandatory information, the intermediary cannot escape liability for breach of CRD provisions by clearly indicating their intermediary position in the transaction (contrarily, to intermediaries liability for non-conformity, pursuant to Wathelet case) (paras 33-34) (see our case note here).

Comment

What does this judgment mean in practice for the online environment is the key question here? A lot of online webshops - distributing products of other traders - could likely be seen as acting on their behalf, and thus would now have either additional due diligence duties, i.e. checking what information these traders share with consumers, or will need to start providing mandatory information themselves. 

What about online platforms and digital influencers? If they were seen as acting on behalf of traders, as well, this information duty would include them, too.

Mandatory information in standard T&Cs

The answer to the second question was long awaited by the academic community: Could online traders provide mandatory information to consumers only by including it in their standard terms and conditions and asking consumers to tick a box that they have accepted these? Was that transparent provision of mandatory information?

Disappointingly, the CJEU does not condemn this standard online market practice. The CJEU focuses its reasoning on the fact that the CRD does not prescribe a method for communication of pre-contractual information to consumers in Article 6(1) or Article 8. The Court distinguishes this situation from a clearly prescribed method for communicating information after the contract was concluded - on a durable medium (para 46).

Comment

What is a missed opportunity by the Court in this case is the elaboration on the principle of transparency and its role in assessing the adequacy and effectiveness of the form in which information is given to consumers. The CJEU does not even mention transparency: whether information provided in standard terms and conditions could be perceived as provided not in a 'clear and comprehensible manner' due to it being less visible or less accessible to consumers? It seems that the answer provided on this point hinged on a technicality, rather than examine broader principles of consumer protection and its aims. Transparency remains a Cinderella before the ball, waiting for her godmother to dust her off.

Facebook ventures further into social commerce: implications for consumer protection

GUEST POST BY

Dr Christine Riefa, Reader, Brunel University

@cyberchristine

Facebook has announced the launch of Facebook Shops on 19 May 2020, a feature primarily aimed at small businesses wanting to sell online. While this is announced as a solution to help during the pandemic, the move had been on the cards for a while (starting with the launch of libra, as a cryptocurrency in 2019). Yet, this launch comes at a time where many shops had to close during the pandemic and are trying to find viable solutions to continue sales. This also comes amid the backdrop of a surge in the uptake of online commerce during lockdowns around the world.

So far, sales on Facebook were limited to the use of marketplace. The Facebook marketplace only enabled users to post adverts and sellers to send direct messages with a view to conclude a sale but it did not support online payments. Marketplace was primarily built for C2C sales (although it was also used by some small businesses). Facebook Shops will drastically change this. It is billed to rival amazon and Etsy in capturing the online e-commerce market. This follows on from other social commerce ventures by Facebook on other platforms it owns, notably on Instagram. On Instagram, users can make use of a ‘shop now’ button (although this functionality is reserved to a small selection of partners). The ‘shoppable posts’ allow consumers to click on featured items and purchase without leaving the Instagram platform.

The Facebook Shops feature will enable payments to be taken and retailers to set up shops available from both Facebook and Instagram. The service will be free for businesses to use as Facebook relies on advert sales to make the venture profitable. The system also allows retailers to link to third party platforms to manage inventories. It promises to make social commerce seamless, a quality it has so far lacked, mostly because payment solutions did not exist to integrate with this new selling method.

The arrival of this new offering seems to cement the rise of social commerce as a new retail channel. Up to date, social commerce (i.e., social media tools and interactive technologies used in an electronic commerce setting) was developing but remained embryonic. Facebook’s move may well finally launch social commerce for good.

This raises some important questions for consumer protection. Most of the legislation adopted to frame online purchases has focuses on electronic commerce. As social commerce is not simply transactional, and it also builds on a rich social, interactive and collaborative shopping experience (see Yang (2015) 24 Retailing Consumer Serv.) many of the rules in place may not totally be adapted. After all the Facebook Shops is looking for people to ‘experience the joy of shopping versus the chore of buying’ (see https://about.fb.com/news/2020/05/introducing-facebook-shops/). Yet, consumer law has primarily developed based on the information paradigm. This implies that buying is more akin to a chore where the ‘average consumer’ is expected to do his homework and arrive at sound purchasing decision. It requires time spent on the small print, on studying the suitably of a product to ones’ need. As a result, this shift of emphasis as announced by Facebook for its new social commerce offering comes to question some of the underlying rationale for legislation and established policy direction. Besides, consumers will be able to easily share posts about products they are interested in or have purchased, signaling their preferences to their social networks. While Facebook promises this sharing will be at the discretion of the users, other aggregated data on browsing will be collated and shared with the businesses, as well as influence the selection of adverts a consumer may see (https://about.fb.com/news/2020/05/privacy-matters-facebook-shops/). This raises some questions relating to freedom of choice, when big data effectively comes to frame those choices and may also lead to some framing of prices (through price personalization).

This leads to reflect on whether or not, consumer law in its current form is fit for purpose and can serve consumers in their social commerce experiences. There are currently a number of pervasive legal issues associated with social commerce:

-       Legal identification of traders in a social commerce context;

-       Online reviews and notably fake reviews and endorsements.

-       Personalised advertising based on data gathered on social media

-       Potential for personalised pricing that may prove discriminatory and/or cause detriment by artificially raising the price of goods offered

-       Control of digital influencer marketing

-       Sale of fake and/or dangerous products on social media platforms

-       Controlling sales and enforcement of the law across geographical boundaries

-       Regulation of liability on social commerce platforms.

As social commerce becomes more mainstream, those questions will need to find an urgent answer. The danger is of course that while consumers may have learnt to be weary of retailers’ ability to inflate the truth about their product they are less suspicious and potentially more easily influenced in situations where a product is marketed and sold via the intermediary of influencers, or when a product is posted by someone in their social network. In this context, already failing underpinnings of information as a shortcut for protection, inflated expectations placed on consumers to behave as rational economic agents, underperforming public enforcement alongside an absence of platform liability may well all line up to create consumer detriment on a large scale.

Notes:

This blog post builds on previous research published by the author. Notably, see C. Riefa, Beyond e-commerce: Beyond e-commerce: some thoughts on regulating the disruptive effect of social (media) commerce (Alèm do comércio eletrônico: algumas reflexōes sobre a regulação dos efeitos maléficos do comércio social (mídia), Revista de dereito do consumidor RDC (Brazil) 127 (Jan-Feb 2020), 281-304, available at SSRN: <http://ssrn.com/abstract=3608016>; C. Riefa, ‘Consumer Protection on Social Media Platforms: Tackling the Challenges of Social Commerce’ in T. Synodinou, Ph. Jougleux, Ch. Markou., Th. Prastitou, EU Internet Law in the Digital Era (Springer, 2019);

C. Riefa, L. Clausen, Towards Fairness in Digital Influencers’ Marketing Practices 8 (2019) 2 EuCML 64-74, available at SSRN: <https://ssrn.com/abstract=3364251>.

Are contract summary templates transparent? - feedback opportunity

The European Commission asks for feedback on the draft contract summary template, which all consumers must receive from e-communication service providers. Commission aims to make this template 'clear and understandable' and to facilitate comparison of services of different providers, thus transparency is definitely one of the key points that should be considered during the evaluation. Feedback may be submitted until 9 September on this website.

Public call for information on online choice architecture for consumers

The Dutch Authority for Consumers and Markets (ACM) has published a call for information on online choice architectures for consumers. The questionnaire may be found on this website, with the deadline for submitting information being set at August 16. The gathered information is to be used in preparation of the 'Guidelines regarding online choice architectures'. Through these guidelines ACM intends to advice traders, which online behavioural persuasive practices could e.g. be assessed as unfair (deceptive or coercive) commercial practices, and which examples of online persuasion could be seen as exemplary.

Online chats may be as efficient as phone talks - AG Pitruzzella in Amazon EU (C-649/17)

Yesterday, AG Pitruzzella issued his opinion in the case concerning Amazon EU's compliance with the information obligations imposed on online traders by the Consumer Rights Directive (C-649/17). Namely, the German federation of consumer associations considered Amazon EU as not transparently informing consumers how to contact it: it did not provide a fax number to consumers, and only displayed a phone number of its general helpline after consumers answered a series of questions, incl. questions related to consumers' identity.

Article 6 CRD requires online traders to provide before the conclusion of the contract a number of information, including in point (c): "the geographical address at which the trader is established and the trader’s telephone number, fax number and email address, where available, to enable the consumer to contact the trader quickly and communicate with him efficiently ". 

The questions that were asked by the national court were as follows: What does it mean that the phone and fax number and email address are to be conveyed to consumers only 'where available'? Could the Member States required traders to always provide consumers with a phone number, not only when 'where available'? Could the trader use different means of communication to contact the consumer and inform consumers about them instead? E.g. Amazon used online chat services and call-back facilities. And finally does the transparency requirement impose an obligation on online traders to supply this information quickly and efficiently?

Using other means of communication

AG Pitruzzella notices that Article 6(1)(c) CRD introduces two separate obligations. First, the traders needs to inform consumers transparently about the methods of contact that consumers may use, which means that consumers need to 'understand unequivocally' how to communicate with traders. Second, online traders need to ensure that the communication with consumers is quick and efficient, whenever consumers require to contact them (para. 47-53). The particularities of which means of communication are prescribed by the trader are of less relevance than their actual ability to ensure quick and efficient communication between the parties (para. 54, 82, 86). This should suggest that online traders could choose other than prescribed in the CRD means of communication (para. 95):

"Provided that those requirements are met, the choice of what means of communication are actually to be made available is left to the trader, who will have regard, inter alia, to the characteristics of the context in which the negotiation with the consumer takes place"

AG Pitruzzella also compares this situation to the rules on the E-commerce Directive, which also refer to the communication with consumers through a phone line, but where the ECJ previously declared that online traders could be more efficiently often contacted through different means of communication (deutsche internet versicherung, C-2987/07, para. 40).

Using means of communications 'where available'

Following both literal, comparative, systemic and teological interpretation of the term 'where available', AG Pitruzzella concludes that Art. 6(1)(c) does not require traders to always provide for communication means such as a phone, fax and email (para. 67). Thus, even if the online trader actually has a phone line, they do not have to make it available to consumers for communication purposes. Consequently, only if online traders have set up a phone line for the purpose of communicating with consumers they need to provide information on that phone number to consumers (para. 78).

Transparency

AG Pitruzzella examines in details the requirements for transparency from the CRD: clarity and comprehensibility. Clarity, pursuant to him, is a requirement of formal transparency: "which must apply to the outward manner in which the information is put before the consumer, and thus to the way in which the information is read and understood in the environment within which the transaction is carried out". Comprehensibility represent material transparency "the specific content of the information, which must inform the consumer of the legal consequences of his choices" (para. 107). By emphasising both formal and material elements of the transparency test, AG Pitruzzella draws a de facto parallel between the methods of interpretation of the requirements of clarity and comprehensibility and these from the Unfair Contract Terms Directive - of providing plain and intelligible information to consumers. Whilst the CRD does not impose an additional obligation on online traders to provide information within a specific time frame to consumers, making the information difficult to access makes it incomprehensible (para. 109). The principle of transparency requires therefore that consumers have access to information on how to contact online traders in a "simple, efficient and relatively rapid manner" (para. 110).

No additional formal requirements in the Member States

Finally, due to the maximum harmonisation of the CRD, the Member States are of course not allowed to draft additional formal requirements for online traders on how to provide information to consumers and what should the content of that information be. Thus, Germany could not oblige traders to always facilitate a phone line for the purpose of communicating with consumers (para. 114).

This is a very practical interpretation of the provisions of the CRD, which should facilitate sufficient flexibility for online traders to choose which methods of communication suit them best, but also make it future-proof when new means of communication will be created. It does protect traders in cross-border trade, as well, from having to face additional formal requirements set by the Member States. An interesting comment was made on the meaning of transparency, as it goes quite in depth into explaining its requirements and their relation to the duty to inform. Let us see what the Court will take on board from this opinion.

New Deal for Consumers: proposals on online transparency

In our earlier post we reported on the behavioural study on transparency of online platforms published by the Commission as part of its „New Deal for Consumers” package. We noted that it is hard not to agree with the general recommendations arising from the study (following up on the earlier documents published as part of the Fitness Check of the European consumer acquis and evaluation of the Consumer Rights Directive); however, for them to actually work in practice a number of detailed issues needed to be solved. Interestingly, several matters of relevance to online transparency addressed in the study have already found their way to the legislative proposals tabled on Tuesday. Should we praise the Commission for this pace of action? Let’s have a closer look at these elements of the “New Deal”.

Legislative package: basic facts

The legislative part of the “New Deal for Consumers” consists of the following two proposals:

• a proposed directive amending Directive 93/13/EEC (unfair terms), Directive 98/6/EC (price indication), Directive 2005/29/EC (unfair business-to-consumer commercial practices) and Directive 2011/83/EU (consumer rights) as regards better enforcement and modernisation of EU consumer protection rules (COM(2018) 185 final)
• a proposed directive on representative actions for the protection of the collective interests of consumers, and repealing Directive 2009/22/EC (injunctions) (COM(2018) 184 final) – to which a separate blog post will be devoted.

It is particularly the former proposal in which the new provisions regarding the “digital” sphere are contained  – mainly in the form of amendments to Directives 2005/29/EC (UCPD) and 2011/83/EU (CRD). 

As regards the transparency of online transactions, the proposed amendments affect two of the three dimensions of transparency addressed in the behavioural study: 1) the criteria for ranking and the presentational features of search results and 2) presenting the identity of contractual parties. By contrast, proposals on quality controls for consumer reviews and ratings appear to be missing.

Amendments to the UCPD

One of the ways in which the Commission plans to improve transparency of search results is via the amendment of No. 11 of Annex I to the UCPD. Acording to the new wording

11. Using editorial content in the media, or providing information to a consumer’s online search query, to promote a product where a trader has paid for the promotion without making that clear in the content or search results or by images or sounds clearly identifiable by the consumer (advertorial; paid placement or paid inclusion)

Search results marked as "Ads" on Google

would be qualified as one of the commercial practices considered to be unfair in all circumstances. This does not seem to effect a major change to the state of affairs as, indeed, the providers of leading search tools already identify paid results as such. It should be observed that the proposal does not contain any reference to factors other than direct payment which could have an impact of the placement of a search result such as corporate ties between the operator of a search engine and the supplier of the product or service.

Amendments to the CRD

While the adjustments made in the UCPD would apply to any provider of an online search tool, the amendments made to the CRD with respect to the ranking of offers and identity of contracting parties are essentially limited to "online marketplaces". The latter are defined in the proposed Artice 2(19) as "service providers which allow consumers to conclude online contracts with traders and consumers on the online marketplace’s online interface". This invites several comments.

First of all, while the Commission presents its definition of an online marketplace as "future-proof" this does not necessarily mean that it is free from doubts. Indeed, unlike definitions found in Directive 2011/83/EU on consumer ADR and in Regulation 524/201342 on consumer ODR, the new wording does not refer to a "website", but makes use of a more technologically neutral notion of an "online interface", defined by reference to the newly adopted Regulation 2018/302 on geo-blocking. At the same time, however, the proposed act does not seek to amend Article 7(3) of the CRD which refers to a "trading website". 

Secondly, the decisive function of an "online marketplace" consists in "allowing consumers to conclude online contracts on the online marketplace’s online interface". This seems to suggest that a service provider only qulifies as an online marketplace if the actual contract is concluded by means of the software  provided (website, mobile app), thus excluding webites which merely identify the relevant customers and suppliers.

Thirdly, the definition of an online marketplace refers to the contract concluded by consumers "with traders and consumers". This seems to put an end to a debate whether something like a "consumer-to-consumer contract" can exist. The relevant debate, however, is not limited to the question whether someone who actually sells a good or provides a service can be called a "consumer". This seemingly minor change in wording might also be difficult to reconcile with some national provisions in which a consumer status is intrinsically linked to the professional capacity of his counter-party (see, for example, Article 22[1] of the Polish Civil Code). 

The specific transparency provisions for online marketplaces are found in the proposed Article 6a of the CRD. According to this provision: 

Before a consumer is bound by a distance contract, or any corresponding offer, on an online marketplace, the online marketplace shall in addition provide the following information:

(a) the main parameters determining ranking of offers presented to the consumer as result of his search query on the online marketplace;

(b) whether the third party offering the goods, services or digital content is a trader or not, on the basis of the declaration of that third party to the online marketplace;

(c) whether consumer rights stemming from Union consumer legislation apply or not to the contract concluded; and 

(d) where the contract is concluded with a trader, which trader is responsible for ensuring the application of consumer rights stemming from Union consumer legislation in relation to the contract. This requirement is without prejudice to the responsibility that the online marketplace may have or may assume with regard to specific elements of the contract.

Concluding thought

Improving online transprency clearly belongs to the rationale of legislative proposals submitted by the Commission earlier this week. The specific proposals made promise to bring more clarity to consumers, but do not address all the identified problems. If the proposed directive was to be adopted in the current form, a further question might be asked as to the extent to which Member States could still intervene in ensure transparency of online platforms (considering the full harmonisation nature of both the UCPD and the CRD). The current wording of the proposals also leaves a range of interpretative questions open. Should these not be addressed in the legislative process, this important task will, once again, be left to the Court of Justice. 

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.

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.

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.

Provision of information on a durable medium: AG Bobek on Case C‑375/15

Today, an interesting opinion by AG Michal Bobek has been published. It concerns more directly the field of e-banking, but also touches on a question of more general relevance to consumer law, namely when information can be said to have been "provided" to consumers and what constitutes a "durable medium" allowing prolonged accessibility of the information. 

In the case under review, a bank was using its e-banking mailbox as a tool to communicate changes in its terms and conditions to its customers. The question before the court of justice boiled down to whether this practice complied with the Payment Services Directive (Directive 2007/64/EC), which requires information on contractual changes to be timely provided to consumers on a durable medium. 

The AG starts with pointing out that, in his opinion, "providing" the information is a separate requirement than the "durable medium". 

The "durable medium" requirement has been the object of some discussion; the AG concludes that the most reasonable understanding of this requirement- not only in the context of this directive- is that it does not entail that information should be provided on a physical or "hardware" support, but that only two main characteristics should be guaranteed: 

1) accessibility for an appropriate amount of time; 

2) unaltered "reproducibility", which entails both the possibility to store the information for the consumer and the impossibility for the service provider to alter the contents of said information.

According to Bobek, it will be difficult for internal mailboxes to fulfill these requirements on their own merits- in other words, the mailbox can hardly be the "support" or durable medium on which information is provided. However, they can more easily be a transmission mechanism for the transmission of information on a durable medium- such as, we understand, a PDF file. 

On the other hand, even in case reasons would exist for the national court to consider the information as given on a durable medium, in itself the transmission via internal mailbox cannot be considered as "provision" of information. The information can, under the directive, only be considered to have been "made available" to the consumer. 

Provision of information, according to the AG, can be said to have been accomplished if a further alert is sent to the consumer through an instrument that he would more easily have regular access to- such as a personal email address or home mail. 

Although this seems to set the bar pretty high, the solution presented could still be seen as more lenient to service providers than the Court's precedent in Content Services, which had considered an email containing a link to a webpage not to represent "giving" of information under the Consumer Credit Directive (2008/48/EC). While the AG seems tempted to suggest that Content Services should be overturned or at least delimited, he mostly directs his efforts at distinguishing the two cases, by pointing out that the two directives (Payment Services and Consumer Credit) employ different language and also pursue different goals. Additionally, the AG observes that in a framework service contracts as the one at hand in the present case, the parties can agree that in general communication will take place via internal emails, thus in this case, once a consumer is alerted, "clicking several times or even typing a user name and passwords" are not actions which is unreasonable to require from a consumer to "receive" information sent to them (see para 82).

  

The opinion addresses several potentially contentious issues- which is confirmed by the fact that several governments (including the Italian and Polish governments) and the Commission intervened in the procedure. 

PS On a side, the opinion also touches on the question of whether the right to be provided information (in a certain way) can be waived by means of consent to standard terms. In this case, the question is not addressed by means of the Unfair Terms Directive- however, the court case stemmed from an injunction by a consumer association which sought to prevent the bank's continued use of a term by which the consumers agreed to information concerning contractual changes being provided in the way discussed. The Commission claimed this was a valid term, the AG disagrees.

Commission's proposal on the Digital Single Market out

Yesterday, the European Commission published two proposals aimed at harmonising the rules on two aspect of digital economies: sales of goods and provision of so-called digital content. There will be chances to discuss the proposals more in detail in the weeks and months to come (in particular: to what extent can they still be considered as a legacy of the discarded common sales law proposal?). Curious readers, however, will find them on the website of DG justice, accompanied by a number of context documents as well as country factsheets. Exciting times!

1:0 for Goliath - short update

Regarding the collective action against Facebook's data protection laws initiated by Max Schrems that we discussed previously the Regional Civil Court Vienna (“Landesgericht Wien”) dismissed the case on formal grounds. Schrems announced to appeal the decision.

For further details in German click 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.

Google under the EU fire

As we have mentioned before (Google continued) there is a growing worry among the European authorities protecting consumer interests as well as fair competition on the EU market about the dominant position of Google. The European Commission has just sent a Statement of Objections to Google against its practices, potentially in breach of EU antitrust rules, that allow Google (more than 90% of market shares) to systematically favour their own comparison shopping product (currently, "Google Shopping") in the general search results pages that consumers in the EU receive. That is to say, EU consumers would not necessarily receive the most relevant search results and not have a possibility to use the services of Google's competitors in providing comparison shopping services (Commission sends Statement of Objections to Google on comparison shopping service). Moreover, the Commission opened a formal investigation against Google with regard to its Android mobile operating system, applications and services for smartphones and tablets. Since the majority of smartphones in the EU are based on Android, it is important that Google does not abuse its dominant position on the market. While anyone could freely use and develop Android, Google delivers the Android operating system together with a range of Google's proprietary applications and services and expects manufacturers, software developers etc. to conclude contracts with Google e.g. demanding exclusive pre-installation of Google's own applications and services on smartphones and tablets. (Commission opens formal investigation against Google in relation to Android mobile operating system)