Taking a chance on a game of chance - AG Sharpston in Pfleger (C-390/12)

14 November 2013: AG Sharpston in Pfleger (C-390/12)

Another opinion issued yesterday and related to consumer protection concerned authorisation of gaming machines in Austria. Currently, only a limited number of licence holders may organise games of chance in Austria, and other operators who are prohibited from offering such services may object against it by claiming unjustified restriction on the freedom to provide services as guaranteed by art. 56 TFEU. (Par. 51) By the way, questioning the national policy under art. 56 TFEU seems more reasonable than what parties in these proceedings have done - operating gaming machines without a licence, getting caught, being held criminally liable for it, and then trying to get out of it under the TFEU provisions.

The CJEU considered earlier that certain justifications are allowed to restrict provisions of gambling services, e.g., consumer protection (incl. protecting players from gambling addiction) and crime prevention, as long as they are proportionate, while some other reasons don't suffice, e.g., increasing tax revenue. The Austrian court will need to determine what the objective was in the given case and to adjudicate accordingly. (Par. 54-55) In general, however, the AG Sharpston reminds the national court that a limitation of number of licence holders automatically limits opportunities for gambling, and therefore seems proportionate to achieve the objectives of consumer protection and crime prevention.(Par. 57) There are, however, many factors that only a national court may take into account in trying to establish Austrian authorities' objective, like, scope of a gambling problem in Austria, intensity of controls applied to licensed establishments etc. At the same time, it may be an argument against Austrian government's claim that they pursue consumer protection, the fact that license holders are currently engaging in aggressive advertising campaigns to promote positive image of games of chance and encourage active participation.

"While the Court has recognised that moderate advertising may be consistent with a policy to protect consumers, that is only where the advertising is strictly limited to what is necessary to channel consumers towards controlled gaming networks. Advertising that encourages gambling by trivialising it, giving it a positive image or increasing its attractiveness aims to expand the overall market for gaming activities rather than channelling the existing market to certain providers. Such an expansionist commercial policy is plainly inconsistent with an aim of achieving a high level of protection for consumers. As the Court stated in Dickinger and Ömer: ‘A Member State is not … entitled to rely on reasons of public policy related to the need to reduce opportunities for gambling in so far as the public authorities of that State incite and encourage consumers to participate in games of chance so that the public purse can benefit’." (Par. 60)

Silence is golden - AG Sharpston in OSA (C-351/12)

14 November 2013: AG Sharpston in case OSA (C-351/12)

This case may concern copyrights but its effects will impact consumers in some Member States that is why we will briefly mention here recent opinion of AG Sharpston in it. 

Imagine you are in a health spa, trying to relax while bathing in medicinal springs and enjoying spending days in the provided by the spa accommodation, which includes TV and radio sets in your room. Obviously, in order to relax you may want to listen to your favourite bands on the radio or watch a nice movie, TV show, etc. What may stand in the way of that luxury are, however, high fees that the organisations who protect copyright in the given Member State claim from the health spa for transmitting their works. In Czech Republic OSA has a right to collect such fees and the health spa was obliged to obtain a licence from them. Czech law excludes from the need to pay such fees transmission that take place in patients' rooms when providing health care in health establishments, which could encompass a health spa. OSA claims that this exception is contrary to the Copyright Directive 2001/29 and AG Sharpston agrees therewith (classifying it as communication to the public - par.28). 

What may follow the judgement of the CJEU in this matter is either an increase in prices of health spa establishments or an increase of health spa meditation establishments, where silence is golden.

"Sir, please, leave your mobile ON."

The European Aviation Safety Agency (EASE) made a press release yesterday promising to publish by the end of this month new guidance, which will finally (!) allow air passengers to use their personal electronic devices (PED), such as mobile phones, e-book readers, tablets, mp3 players, etc., during all phases of a flight (EASA allows use of Electronic Devices on board). The devices will need to be set to a 'flight mode', but it's a huge progress over current state of affairs. For safety reasons, bigger PEDs such as laptops will still need to be stowed during taxiing, take-off and landing. But there will be no more need to stop reading your book on your Kindle just when it is getting interesting. These changes will need to be adopted by European airlines. Yay for technology progress! Or for getting rid of unnecessary bureaucratic requirements, since as Toby Ziegler once said: "We're flying in a Lockheed Eagle series L1011. It came off the line 20 months ago. It carries a Sim-5 Transponder tracking system. Are you telling me I can still flummox this thing with something I bought at Radio Shack?"

"As important as a daily glass of milk!" - AG Wathelet on health claims in Ehrmann (C-609/12)

14 November 2013: AG Wathelet in Ehrmann (C-609/12)

We have been writing more often recently on the importance of health claims' regulation (see e.g., our comments on recent CJEU case concerning health claims - Green Swan). Today the AG Wathelet issued an opinion in a German case regarding further interpretation of health claims as regulated in Regulation No. 1924/2006. 

Ehrmann is a producer and seller of diary products, including a fruity quark ("Monsterbacke") that is being sold as a six-pack of 50g each, mostly as a children healthy snack. The six-pack's packaging contains a nutrition label on its side listing nutrition value for 100g of this product. It is important to mention that 100g of the quark has, among others, 130mg of calcium and 13g of sugar, while the same amount of cow milk would have maybe the same amount of calcium but way less sugar (4,7g of sugar). Why am I making this comparison between the quark and the milk? Because the producer included in 2010 a slogan on top of each packaging stating something along the lines of: "As important as a daily glass of milk!" (I'm translating this from a Polish language version of the AG's opinion since the English one isn't available yet). Obviously, it could be claimed that this slogan was misleading since it did not mention the difference in sugar level in both products. What was interesting, and referred to the CJEU, was the possibility of this slogan being classified as a 'health claim' under the Regulation and, therefore, not being in compliance with its art. 10.

Art. 10 of the Regulation states, among others, that health claims are prohibited unless they are authorized and fully informative, and that health claims can only be permitted if they include on the label statements indicating importance of a varied and balanced diet and a healthy lifestyle, as well as the quantity of the food and pattern of consumption required to obtain the claimed beneficial effect. This article has not been fully complied with in the given example. While the national courts asked the CJEU for interpretation of some temporal law issues regarding the entry into force of this provision (AG decides that art. 10 requirements should apply as of 1 July 2007, like the rest of the Regulation), for us it is more interesting to look at the assessment of the slogan as a health claim adopted by the AG Wathelet.

Health claim is defined broadly in the Art. 2(2)(5) Regulation as:

"any claim that states, suggests or implies that a relationship exists between a food category, a food or one of its constituents and health".

As the CJEU previously decided (Deutsches Weintor) there are no limitations set in this definition as to whether the link between a product or its ingredient and health needs to be direct or indirect, how close this link needs to be or for how long it should be present. This means that this link could be easily found. (Par. 40) The slogan used by the company Ehrmann clearly indicates that their product is in the daily nutrition at least as important as a glass of milk. (Par. 47) An average consumer would presume, and the AG is basing this opinion on academic surveys, that milk has a beneficial influence on his health, especially on children's health. (Par. 48) If such a presumption wasn't common, then it would not make sense for the producer of dairy products to place this slogan on them. (Par. 49) Additionally, the slogan's wording 'as important as' indicates the link between the product and the information on it about a daily consumption of milk. (Par. 50) The slogan may, therefore, convince an average consumer (diligent and informed to a usual degree) that consuming these fruity quarks may be as beneficial to health as milk consumption. (Par. 51) Therefore, this slogan should fall within the scope of a health claim definition since it creates an impression that there is a link between consumption of this product and health. (Par. 52, 57)

CJEU once again on jurisdiction in consumer cases: C-478/12 (Maletic)

In a judgement delivered today, Armin and Marianne Maletic v lastminute.com GmbH, TUI Österreich GmbH, C-478/12, the Court added another brick to the implementation of the consumer protection project envisaged by Regulation 44/2001. It did so by declaring that in contract which the consumer enters with a travel agent and, indirectly, with a tour operator, the fact that the former business is established in a country different than the one of which the consumer is a resident suffices to make the regulation applicable to the tour operator, as well. This means, concretely, that the consumer can sue both companies before the "courts for the place where the consumer is domiciled" (art 16(1), Regulation 44/2001)

The question that the CJEU had to answer concerned a package holiday which had not gone as smoothly as the claimants, an Austrian couple, had hoped. The tour operator had reserved a room in a different hotel than the one which the Maletics had selected on the travel agent's website, so the couple had to pay a considerable surcharge to "upgrade" to their original choice once they found out about the mistake- which only happened when they reached Egypt!

Once back, Ms and Mr Maletic sued both the travel agency, lastminute.com, established in Germany, and the tour operator, TUI, which has a registered office in Vienna, Austria. For Regulation 44/2001 to apply, the legal relation concerned has to entail an "international" element. It was obvious that, under the Regulation, the couple could sue the "foreign" service provider before their local court of Bludenz; the lawyers assisting TUI however, claimed that all the (national) lawsuits against the company had to be filed in Vienna. Should proceedings in cases like this one be brought separately before different courts, then?

The Court of Justice held (par 30) that an interpretation allowing "split" jurisdictions in cases such as that at hand would both water down the protection that article 16(1) of Regulation 44/2001 offers to consumers and contradict one further objective of the Regulation, namely that of avoiding conflicting decisions. It is irrelevant, to this regard, whether the whole economic operation should be considered as made of one or two contracts. The fact that one of the two counterparts (and namely, in this case, the one with which the consumer has originally come in contact) was established in a different Member State is enough for the Regulation to be applicable to cases filed against both.

Users of lastminute.com and similar services should feel happy to know that this judgement makes them a little better-insured against
bad surprises- and therefore hopefully more confident, which is very likely exactly what the Court wants.

Looking for the heart

Many topics of European consumer law have by now been harmonised through EU Directives. Still, as many (or maybe even more) questions related to consumer contracts in the Internal Market remain subject to rules of national laws, e.g the boundaries of what is enforceable under the law (incl. immorality of contracts) and the meaning of parties' agreement (interpretation of contracts). Insofar as national rules yield similar results, a basis for further harmonisation of laws may be found. 

In the coming days, a discussion of the similarities and differences of European laws on a variety of matters of private law will take place at the 19th meeting of the project on 'The Common Core of European Private Law' in Torino. For more information, see the website and conference programme.

"Ethical" food labels and ritual slaughter

In contemporary markets, different sorts of labelling have become common. While we reflect on the merits of more "traditional" labels, new sources of consumption concerns gain ground. In particular, amidst the debate on ritual slaughter* the question of labelling can have multiple facets. Not only consumers who adhere to faiths commanding a certain slaughtering technique might find "religious" labelling useful. As a matter of fact, some consumers might also want to avoid meat derived from ritual slaughter out of ethical concerns: animal rights groups tend to have a quite negative outlook on the point. Should then the concerned products be required to bear labels which are also informative for "outsiders" to the concerned communities, hinting at the way the product has been obtained?

This is what some MEPs seem to believe. In particular, this form of labelling is presented as a midway between total non-interventionism and the prohibition of ritual slaughter. The issue remains controversial because going beyond mentioning the "halal" or "kosher" brands into "descriptive" labels (such as "meat from slaughter without stunning") is likely to immediately associate a negative image to the product and the groups to which it is primarily addressed. At the same time, it might a contrario create a sort of presumption that the means adopted for non-ritual slaughter are not only less controversial but also intrinsically "better". Such labels were also discussed, and finally discarded, during the process that led to the adoption of the recent Regulation on food information. But the discussion does not seem to have ended yet.

* The European Convention for the Protection of Animals for Slaughter requires in principle that animals should be stunned before being killed, but allows member states to enact or keep in place exceptions based on the respect of religious beliefs. The situation in the MS is varied, with some allowing ritual slaughters, some having prohibited it in more or less recent times and some trying to avoid taking an open position.

Putting an (effective) label on energy

BEUC published today a new study "Lessons learned from past mistakes" (accessible through here) evaluating the Energy Label. The Energy Labelling Directive 2010/30/EU needs to be reviewed by the European Commission by the end of 2014 and the last year's review of Ecodesign Directive showed that there are some improvements that could be argued for. Consumer studies that have been conducted assessing the clarity, comparability, credibility, consistency and simplicity of the Energy Label suggest that consumers' understanding of this label is currently still not full. The BEUC appeals to the European Commission to consider a few changes.

First, the "A plus" classes should be eliminated from the rating scale of the Energy Label. Consumers seem to be more inclined to buy more energy efficient products if the scale is closed between A-G scales rather than when it is broadened by addition of "A plus" classes. National legislators tend also to misapply these classes by awarding them to currently most energy efficient appliances in a given category, which means that they do not leave any room for technological development and improvement. Consumers tend also to believe that the whole range of classes showed on a product should be available to them, even though many labels may show empty classes, where products are not yet on the market since there is no corresponding technology.

Second, disclosure of consumer-relevant information, affecting costs and performance, should be more transparent and comprehensible. The Directive requires the unit of "kilowatt hours per annum" to be displayed on the Engery Label, while survey showed that more than 70% tested German consumers did not understand the meaning of "per annum" on the label. Some research suggests also that consumers may prefer the label to express energy consumption per usage, i.e., "per cycle". More empirical evidence is needed as to which label is more transparent to consumers.

Lastly, BEUC believes that there is a need to reassess the relationship between the energy label, the calculation formula on which it is based and the appliance size. BEUC worries that the Directive may be promoting larger appliances, sine it is easier to receive a higher rating for a larger appliance, and the calculation formula for the energy efficiency classes takes size into account. This is a consumer-unfriendly trend since consumers may prefer to buy a bigger appliance with a higher energy-efficiency class, not understanding that they would end up spending more energy (and more money) due to the larger size of the appliance.

Plastic (bag) is not fantastic!

The multitude of European consumer protection rights in consumer sales sector aims to encourage Europeans to, well, go shopping. However, if we shop and purchase something we need to transport it back to our homes often in a shopping bag. If that shopping bag happens to be a plastic bag and upon coming home we immediately discard of it (since we may not want to start a collection of plastic shopping bags), what we may not realize is that it will take hundreds of years for the environment to get rid of that lightweight plastic bag. (Commission proposes to reduce the use of plastic bags) Therefore, yesterday the European Commission adopted a proposal of a Directive to reduce lightweight plastic bag consumption in the EU, which will amend the existing Packaging and Packaging Waste Directive. It will be left to the Member States to choose appropriate measure that would lead to the reduction of plastic bag consumption, e.g., charges or bans (some Member States already have such measures in place).

Landmark cases

Studying case law is a great way to learn about European consumer law matters. A book that has recently been published in honour of Professor Jules Stuyck collects essays on a number of leading EU judgments in the field. The editors summarise the book's contents as follows:

'This unique book tells the story of the coming of age of EU consumer law, a legal domain that hasn’t ceased to expand in depth and scope during the last 20 years.

However, this book has not been conceived by the editors as an exercise in nostalgia. The contributions offer ample food for thought about the challenges awaiting consumer law in the years to come. The selected cases in this book are therefore without exception landmark decisions. What this volume doesn’t offer however, is an exhaustive overview of EU consumer law jurisprudence. It doesn’t aspire to be a textbook covering all aspects of consumer law. Rather, the authors have approached the cases – some of which have been commented upon quite extensively in legal doctrine already – from a novel and personal perspective, sometimes coloured by the contributor’s particular background, concerns and interest. Very often, the cases have been used as a point of departure to point out a development in EU and / or national consumer law.

The result of the contributors’ efforts does not only read as splendid anthology but it will be read and continued to be read by anyone interested in EU consumer law.'

Readers interested in Jules Stuyck's work might also wish to look up his editorial in the latest issue of consumer law journal euvr.