Notifying about cancelled flights - CJEU in Krijgsman (C-302/16)

An interesting judgment on air passenger rights has been given today by the Court of Justice in the case Krijgsman (C-302/16). It clarifies that the airlines are responsible for paying out compensation to passengers whose flights have been cancelled (pursuant to Regulation 261/2004) in any event when the information on the cancellation has not been communicated to the passengers at least two weeks before the scheduled departure time. The airlines don't discharge their obligation by timely notifying about the cancellation the travel agent through which the passengers booked their flight, if that information is not relayed further to the passengers by the travel agent. This is consistent with keeping the compensation pursuant to Regulation 261/2004 separate from any contractual relationship between airlines and passengers.

In practice this means that anyone booking a flight through a travel agency (whether regular one or an online intermediary websites) may still expect to be compensated by the airlines in case of a flight's cancellation, unless they have received information about this cancellation at least two weeks before the scheduled departure time (either from the airline or from their travel agent).

Transparency: where art thou in consumer protection?

TRANSPARENCY:

WHERE ART THOU IN CONSUMER PROTECTION?

Date: 27 June 2017

Place: Laver LT3

Moderator: Joasia Luzak (University of Exeter, UK)

• 10:00-10:45      Evelyne Terryn (KU Leuven, Belgium): "Transparency in the UCTD: time for reform?

• 10:45-11:00       coffee/tea break

• 11:00-11:45   Monika Namysłowska (University of Łódź, Poland): "Transparency in commercial practices"

• 11:45-12:30     Alison Harcourt (University of Exeter, UK): "Media transparency in Europe"

• 12:30-14:00      buffet lunch for participants

• 14:00-14:45   Christopher Docksey (European Data Protection Supervisor): "Transparency online under the new GDPR rules" (TBC)

• 14:45-15:30   Alexander Wulf (SRH Hochschule Berlin, Germany): "Analysing transparency in information obligations from a multidisciplinary empirical perspective"

• 15:30-16:15  Kyriaki Noussia (University of Exeter, UK): "Transparency in consumer insurance contracts"

Symposium organised by: University of Exeter, Centre for European Legal Studies, Joasia Luzak

Public consultation on FinTech: closes 15 June 2017

The EU Commission is currently holding a public consultation on FinTech (see here).

FinTech, standing for financial technologies, means the use of technology in the provision of financial service. The term is very broad, it includes the provision of traditional financial services with the use of technology by traditional service providers (e.g. online banking), or the provision of innovative products by innovative startups (e.g. peer-to-peer lending and bitcoin). Creating policy solutions for protecting FinTech customers is one of the current priorities under the Consumer financial services action plan that sees FinTech a major driver for strengthening the EU single market for financial services (see for more here).

The consultation  is structured around four broad areas to reflect main opportunities and challenges raised by FinTech:

1. Fostering access to financial services for consumers and businesses;
2. Bringing down operational costs and increasing efficiency for the industry;
3. Making the single market more competitive by lowering barriers to entry; and
4. Balancing greater data sharing and transparency with data security and protection needs.

Useful material for understanding the opportunities and challenge raised by FinTech is provided by a one day conference on FinTech hosted by the EU Commission. The material is available online, including a video of the conference (see it here).

Based on the results of this public consultation and the work of the FinTech Task Force (see our post here) the EU Commission will determine which actions are required to support the development of FinTech and a technology-driven single market for financial services.

The consultation is open until 15 June 2017, and awaits reposes from consumers and organizations. So if you have any personal experience with using FinTech products and services and or if you have relevant research results, please share them. As always, we will be waiting for the results of the public consultation to report on them to you.

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.

Ban on advertising of dental practices contrary to EU (not consumer) law - CJEU in Vanderborght (C-339/15)

It is not the first time that the CJEU has to assess the compliance with EU law of Belgian law and its tendency to absolutely prohibit certain commercial practices. In the Vanderborght case (decided last Thursday, 4 May; case C-339/15), it was the ban on advertising of dental practices that was at stake.

Mr Vanderborght offered and advertised his dental services in Belgium, the latter by installing "a sign consisting of three printed faces, stating his name, his designation as a dentist, the address of his website and the telephone number of his practice", as well as by advertising in local newspapers. On his website he provided information on various treatments he offered. A professional association of dentists (Verbond der Vlaamse Tandartsen) was concerned about his advertising practices as pursuant to Belgium law advertising relating to oral and dental care is prohibited, in order to protect public health and dignity of the profession of dentist. Mr Vanderborght claimed that such a general ban on advertising was contrary to EU law, among other things, to the provisions of the Unfair Commercial Practices Directive (2005/29/EC).

The CJEU points out that the UCPD allows the Member States to introduce other rules that aim at protecting health and safety of consumer products, as well as codes of conduct related to upholding "high standards of integrity on the part of the professional" (para. 26-27). Therefore, EU consumer law will not stand in the way of imposing a general ban on advertising regulated services, which ban is motivated by concern for public health and safety of products. However, such a general ban on advertising may infringe the freedom of movement of services - art. 56TFEU and provisions of the E-Commerce Directive (2000/31/EC), considering also advertising via websites falls within the scope of this ban.

A bird or a whole flock? CJEU again on extraordinary circumstances and Regulation 261/04

Today, the Court of Justice had to decide yet another case on extraordinary circumstances and flight disruptions under the Air Passenger Rights regulation. 

This time, the referring court wanted to know whether a bird and an aircraft 'meeting' each other, which gives rise to a delay in order to assess or fix the consequences of the impact, is to be considered as an extraordinary circumstance. The court's case-law so far had sought to clarify that most events, and namely all those which are "inherent in the normal exercise of an air carrier's activity" are excluded. (see inter alia AG opinion para 37)

Prior to the decision, the Advocate General had rejected the airline's counsel's submission that seemingly tried to "systematize" extraordinary circumstances, differentiating events with an "endogenous" cause from those which have an "exogenous" origin. The AG considered this  dichotomy tantamount to distinguishing between events taking place "inside or outside the cabin" and observed that introducing this criterion would replace the legal assessment for a merely factual one incapable of justifying the different consequences arising from the two qualifications. (paras 38-39) 

Thus, according to the AG, a collision with a bird would not have to be considered as extraordinary circumstances, since accidents of this kind are common; the situation would only be different "if the flight of birds arriving in large numbers temporarily prevented an aircraft from taking off or forced it to land at an alternative airport". (para 43)

The Court did not agree with the AG (decision available in French). A collision with a bird can represent extraordinary circumstances, if the air carrier has taken all reasonable measures to avoid the accident. The Court, in this respect, gives weight to a different formulation of the "inherent in the normal exercise" test, which also includes that the event is "beyond the actual control of that carrier on account of its nature or origin" (the test was formulated in this way in Wallentin-Hermann v Alitalia, the shorter version was adopted in van der Lans v KLM, see references in the decision). In this way, the Court does not expressly endorse the distinction rejected by the AG, but rephrases it in line with its own precedents.

Accidents involving birds are evidently beyond the carrier's control, but this finding only exhonerates the carrier if the latter can prove that all reasonable measures have been taken and the disruption could still not be avoided. These "reasonable measures" could be conceived at two stages: as aimed at avoiding the collision, on the one hand, and as aimed at avoiding the flight's long delay on the other. 

As concerns the first, the Courts warns that the carrier should not be burdened, in this respect, with obligations that would normally be for others to discharge. In particular, implementing technologies and other arrangements capable of reducing this kind of risk are usually mainly a task for different operators (eg airports). 

As concerns, avoiding the delay, in this case much of the disruption was apparently caused by the fact that the owner of the aircraft had refused to acknowledge the positive results of an inspection effectuated by local technicians and a technician affiliated with the carrier had to be flied in to carry out a second check. This circumstance, if verified, would stand in the way of characterising the delay as due to extraordinary circumstances. The carrier would, according to the court's established case law, be expected to stand liable to the passengers and then seek recourse against those who have caused the problem (ie, in this case, the aircraft's owner). 

So all in all the claimants in this case may be able to obtain their compensation, but the Court seems to have set the first limitations to its expansive reading of the scope of air carriers liability for delay or cancellation under the Air Passenger Rights regulation. Giving weight to the notion that a disruption not falling under the carrier's control would count as extraordinary circumstances may grant some relief to the industry - although it seems also likely to generate new litigation as carriers will inevitably be tempted to read this exclusion extensively. Thus, even more than in other cases, this is clearly ***to be continued***.   

Foreign currency and unfair terms: Opinion AG Wahl in Case C-186/16

We would like to draw the attention of the readers of our blog to the Opinion of Advocate General Wahl in a case concerning the repayment of a loan in a foreign currency and unfair terms (Case C-186/16, Andriciuc and Others). The Opinion was published last week on 27 April 2017; click here for an extensive summary. 

The case concerned loan agreements in Swiss francs concluded between consumers and a Romanian bank. The terms of the agreement provided for repayment of the loans in Swiss francs. However, the exchange rate more or less doubled between 2007 and 2014. In short, AG Wahl finds that the requirement that contractual terms must be drafted in plain intelligible language cannot oblige the seller or supplier to anticipate and inform the consumer of subsequent changes which were not foreseeable, such as exceptional fluctuations in exchange rates, or to bear the consequences of such changes. According to AG Wahl, an average consumer would not only be aware of the possibility of a rise or fall in the value of the foreign currency, but also be able to assess the economic consequences for the consumer's financial obligations under the agreement. Moreover, AG Wahl emphasises that the 'significant imbalance' between the rights and obligations of the parties is not to be assessed by reference to developments subsequent to the conclusion of the contract which are outside the seller or supplier's control and which could not have been anticipated. 

We have reported earlier on transparency and 'core' terms in credit contracts in foreign currency; see our blog on Kásler (C-26/13).

Also, this blog's founder Joasia Luzak is organising a symposium on various issues of transparency in consumer protection on 27 June 2017 in Exeter; see the announcement. 

"Transparency: where art thou in consumer protection?" - save the date: June 27

Dear readers,

I will be organising a 1-day symposium in Exeter on Tuesday, June 27th devoted to discussing various issues of transparency in consumer protection. Details will follow, but please do put it in your calendars already if you'd like to attend.

With best wishes,

Joasia

No more "subscriptions with free smartphone" for Dutch consumers?

Have you bought your smartphone from a shop or are you one of the many consumers who choose to go for a plan+device package from a telecom provider?

In the second case, under a recent Dutch law you would have to show your creditworthiness in case the cellphone included in the package is worth more than 250 euros. 

In 2014, the Supreme court of the Netherlands decided that these combined contracts are to be legally characterised as loans, and that therefore the authorities competent for supervising financial institutions should also make their prudential rules applicable to telecom companies. 

For instance, it must be made clear for consumers how much of the monthly subscription price is due for the actual plan and how much goes to paying back the device sold in installments with the package. Additionally, the usual notice "watch out: borrowing money costs money" will have to accompany all promotional images advertising the packages offered. 

For some consumers, this may mean that they will in practice not be able to enter plans that would previously have been available to them. Consumer associations, however, seem to have been in favour of the novelty. 

GDPR, e-Privacy and beyond (part 2): the struggle over privacy and data protection continues

The European Union has traditionally aimed to set comparably high standards of privacy and personal data protection. Indeed, the protection of personal data constitutes a fundamental right, enshrined in Article 8 of the Charter of Fundamental Rights and in Article 16(1) of the Treaty on the Functioning of the European Union. This part of the picture is also closely linked to the protection of privacy set out in Article 7 of the Charter. Therefore, it is not surprising that the question of personal data was already addressed in 1995, in a dedicated instrument, while the importance of confidentiality and anonymity was consequently underlined in the first "e-directives": on e-privacy and on e-commerce. At the same time, processing of personal and non-personal data is an element of the freedom to conduct a business and its free flow is crucial from the point of view of the internal market and international trade. All of these dimensions are, of course, highly relevant to the European consumers and have gained even more prominence in the era of digitalisation. 

Last year brought several major developments in that regard, with General Data Protection Regulation as a top highlight. While the GDPR is certainly a quantum leap, it is by no means the only measure which had spurred heated debates. Let us summarise the state of play. 

GDPR and e-Privacy 

Five years after first consultations about the need for a legal reform of personal data protection framework in Europe had been launched, a new instrument - General Data Protection Regulation - was finally adopted on 27 April 2016 and will soon replace the existing Directive 95/46/EC. The regulation entered into force on 24 May 2016 and will become directly applicable in all Member States from 25 May 2018 (see also our earlier post on this topic here). 

One of the important novelties concerns the act's extraterritorial reach. Applicablity of the European regime will no longer depend on “the use of equipment” situated in a Member State, but rather on the context and effects of the processing of personal data. The content of the GDPR largely builds upon the existing Data Protection Directive. The instrument strengthens the conditions for a valid consent and defines an age threshold for the consent of a child. More emphasis in placed on the rights of data subjects such as the right to information and access to one’s personal data as well as to rectification and restriction of the processing. Article 22 reiterates the right not to be subject to a measure based on automated data processing and explicitly clarifies that this includes profiling. Furthermore, the GDPR introduces a widely cited right to be forgotten and an equally important right of data portability. Rights of data subjects are correlated with respective obligations of data controllers and data processors, in accordance with the newly formulated principles of data protection ‘by design’ and ‘by default’. 

Throughout 2016 preparatory works on the review of the Directive 2002/58/EC on privacy and electronic communications were also carried out in order to ensure the consistency of this sector-specific instrument with the overall framework enshrined in the GDPR. As we have already reported, the proposed e-Privacy Regulation was eventually tabled on 10 January 2017. 

Apart from the shift in the legal form (from a directive to a directly binding regulation), the proposal provides for a number of substantive changes. A major difference concerns the scope of the measure, which would be extended to all electronic communications providers, i.e. not only telcos, but also over-the-top players. Requirements relating, among others, to the confidentiality of electronic communications, would therefore also apply to providers of services such as voice over IP or instant messaging (Skype, Whatsapp, Messenger). The proposal also clearly refers to machine-to-machine communications - a circumstance which, together with a broad definition of personal data in the GDPR, has not been warmly welcomed by the tech companies. Other novelties include an updated approach to cookies and enhanced protection against spam. With respect to the former, the Commission eventually opted against the principle of 'privacy by default' - a reason for relief for the industry. Emphasis is now placed on the availability of privacy settings in the relevant software applications (such as internet browsers) and not on the ubiquitous pop-up windows. The reform should further ensure terminological consistency not only between the GDPR and the e-Privacy Regulation, but also with the updated telecom framework. In the proposed e-Privacy Regulation itself, the concept of ‘electronic communications data’ was introduced, covering both content data and metadata. As before, electronic communications which remain under protection may contain both personal and non-personal data, for example data related to a legal person. From the Commission’s perspective, the new framework should ideally apply from the same day as the GDPR. 

As for now, preparatory works at the Council appear to be at a very early stage. The responsible committee in the European Parliament is the Civil Liberty, Justice and Home Affairs (LIBE). Two weeks ago the committee held a hearing to discuss the proposal. The plenary vote on the committee’s report is expected in October. 

Transatlantic dimension 

Further notheworthy developments refer to data transfers between the EU and the United States. This strand of the debate clearly shows that there is no single, universally recognised approach to data protection and privacy online. As seen from the efforts to ensure extraterritorial application of both GDPR and the proposed e-Privacy regulation, the European legislator would like to see its framework applied also where data of European citizens are processed outside the Union. A similar approach is observed with respect to cross-border data transfers. According to an established rule, dating back to the 1995 Data Protection Directive, personal data of the European citizens may only be transfered to third countries that ensure “an adequate level of protection”. In the United States, home country to the thriving tech industry, the European approach is often regarded as paternalistic. The importance of transatlantic data flows for the international trade forces European and American decision-makers to meet halfway. 

Until October 2015, transfers of personal data between the EU and the U.S. had been governed by the so-called Safe Harbour Decision. Following the Snowden revelations, the decision was, however, successfully challenged before the Court of Justice. In the widely cited Schrems case, the Court confirmed that the Commission's decision, and therefore the underlying agreement with its U.S. counterparts, failed to ensure that the level of personal data protection in the United States was “essentially equivalent” to the one guaranteed within the EU. After renegotiations a new agreement was reached and, in the decision of 12 July 2016, the European Commission reconfirmed the adequacy of the American framework. The so-called EU-U.S. Privacy Shield provides for a number of new safeguards, including the entirely new Ombudsperson mechanism, the functioning of which shall be monitored annually. 

As expected, a few months after the decision came into force, the Privacy Shield was challenged by privacy advocacy groups before the General Court. The Commission is naturally defending its compromise, but the stance taken by the new U.S. administration is not helping its case. Only last week the European Parliament adopted a resolution  voicing its concerns about new U.S. laws allowing National Security Agency to share diverse personal data with other agencies and criticising the rejection of the rules preventing unrestricted sharing of customers’ browsing data. While in the current resolution these issues are discussed only in the context of the Privacy Shield, one may wonder if similar concerns cannot be raised with respect to the Umbrella Agreement - another transatlantic agreement adopted last year, this time in the field of law enforcement. 

Have your say 

As seen from above, the wealth of issues and regulatory approaches to privacy and data protection as well as the pace of new developments are astonishing. Even where new rules have already been developed with all these needs and concerns in mind, they are likely to face criticism and require further modifications. Sceptics argue that the GDPR will be out-dated from day one. For what it's worth, European policy-makers appear to be aware that the struggles over privacy and data protection are bound continue. Most recently, the European Commission launched a series of public consultations as part of its Next Generation Internet Initiative. Over the coming weeks a number of questionnaires will be available online, allowing everyone to share their views. The first questionnaire, entitled “New technologies for disrupting the economy: business, employment and skills”, is available here. We invite our readers to have a say.