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Fifty Shades of (Facebook) Blue – ECJ Renders Decision on Consumer Jurisdiction and Assigned Claims in Case C-498/16 Schrems v Facebook
Written by Tobias Lutzi, DPhil Candidate and Stipendiary Lecturer at the University of Oxford.
Yesterday, the ECJ has rendered its decision in Case C-498/16 Maximilian Schrems v Facebook Ireland Limited. The case will be of interest to many readers of this blog as its facts are not only closely linked to the ECJ’s well-known decision in Case C-362/14 Schrems but also could have come straight out of a conflict-of-laws textbook.
Maximilian Schrems has been litigating against Facebook and the way in which the company uses the personal data of its users since 2011, when he first submitted a range of complaints to the Irish Data Protection Commissioner. In 2013, he submitted another complaint, which ultimately lead to the annulment of the ‘Safe Harbour’ framework between the EU and the US in the aforementioned decision; the proceedings continued with a reformulated version of this complaint and have recently been referred to the ECJ for a second time. Over the course of this litigation, Schrems built a reputation as a privacy activist, publishing two books, giving talks and lectures, and founding a non-profit organisation that uses ‘targeted and strategic litigation’ to enforce privacy and data protection laws across Europe.
The proceedings that gave raise to yesterday’s decision by the ECJ are formally unrelated to the aforementioned litigation. In 2014, Schrems set out to bring a ‘class action’ against Facebook for numerous violations of privacy and data protection laws. For this purpose, 25,000 Facebook users assigned their claims to him. Only eight of these claims, regarding Schrems’ own Facebook account and Facebook ‘page’ as well as the accounts of seven other users from Austria, Germany, and India, formed the object of the present proceedings. The claims were brought at Schrems’ domicile in Vienna, Austria, based on the special head of jurisdiction for consumer contracts in Art 16(1) Brussels I (= Art 18(1) of the recast Regulation).
The proceedings raised two separate questions, which the Austrian Oberster Gerichtshof ultimately referred to the ECJ:
- Can Schrems still be considered a consumer in the sense of Art 15(1) Brussels I, despite his continued activism and professional interest in the claims?
- If so, can he also rely on the privilege of Art 16(1) Brussels I regarding claims that have been assigned to him by other consumers who are domiciled in (a) the same EU Member State; (b) another Member State; (c) a non-member State?
Following the Advocate General’s opinion (reported here), the Court answered the first question in the positive (I.) and the second one in the negative (II.). Both answers are testimony to a nuanced interpretation of the special rules of jurisdiction for consumer contracts (III.)
I. The Consumer Exception
According to the ECJ’s well-known decisions in Case C-269/95 Benincasa and Case C-464/01 Gruber, the assessment of whether a party is a ‘consumer’ in the sense of Art 15(1) Brussels I does not depend on their subjective qualities but on the ‘the position of the person concerned in a particular contract’ (Benincasa, [16]), which must have been ‘concluded for the purpose of satisfying an individual’s own needs in terms of private consumption’ (ibid, [17]); where a contract has been concluded for a purpose that is partly private and partly professional, the professional aspect of it must be ‘so slight as to be marginal’ for the contract to still fall under the provision (Gruber, [39]).
In the present case, this definition raised two questions. The Court first had to decide whether the assessment was to be made only at the moment when the contract was originally concluded or whether subsequent changes of circumstances must also be taken into account. It held that
[38] … a user of [a digital social network] may, in bringing an action, rely on his status as a consumer only if the predominately non-professional use of those services, for which the applicant initially concluded a contract, has not subsequently become predominately professional.
Second, the Court had to decide whether this was the case for Schrems, who had originally entered into a contract with Facebook for private purposes but subsequently developed a professional activity involving litigation against Facebook. According to the Court,
[39] … neither the expertise which [a] person may acquire in the field covered by those services nor his assurances given for the purposes of representing the rights and interests of the users of those services can deprive him of the status of a ‘consumer’ within the meaning of Article 15 [Brussels I].
[40] Indeed, an interpretation of the notion of ‘consumer’ which excluded such activities would have the effect of preventing an effective defence of the rights that consumers enjoy in relation to their contractual partners who are traders or professionals, including those rights which relate to the protection of their personal data. …
Interestingly, the Court put little emphasis on the possible distinction between Schrems’ private Facebook ‘profile’ and his arguably professional Facebook ‘page’ (see [34]–[36]). Instead, it seemed to generally exclude ‘representing the rights and interests of the users’ of a particular service from the range of professional activities that might prevent the contract for this service from being considered a consumer contract. The Court explicitly linked this interpretation to the objective of ensuring a high level of consumer protection in Art 169 TFEU. Thus, its decision might not even have been different had Schrems joined Facebook with the sole aim of enforcing his (and other users’) rights. This way, the Court effectively sidestepped the problems created by the increasingly wide range of uses to which social media and other online platform accounts can be put, which the Advocate General had so colourfully described as ‘fifty shades of (Facebook) blue’ (Opinion, [46]) – and which, for the time being, remain unaddressed.
II. Jurisdiction for Assigned Claims
With regard to using the second alternative of Art 16(1) Brussels I to bring claims that have been assigned to the claimant by other consumers at the claimant’s domicile, the Court held:
[45] The rules on jurisdiction laid down, as regards consumer contracts, in Article 16(1) of the regulation apply, in accordance with the wording of that provision, only to an action brought by a consumer against the other party to the contract, which necessarily implies that a contract has been concluded by the consumer with the trader or professional concerned ….
…
[48] … [T]he assignment of claims cannot, in itself, have an impact on the determination of the court having jurisdiction …. It follows that the jurisdiction of courts other than those expressly referred to by Regulation No 44/2001 cannot be established through the concentration of several claims in the person of a single applicant. … [A]n assignment of claims such as that at issue in the main proceedings cannot provide the basis for a new specific forum for a consumer to whom those claims have been assigned.
This interpretation seems to align well with earlier decisions by the Court, according to which the special head of jurisdiction in Art 16(1) Brussels I is only available personally to the consumer who is party to the consumer contract in question (Case C-89/91 Shearson Lehman Hutton, [23]; Case C-167/00 Henkel), [33]), and according to which the assignment of a claim does not affect international jurisdiction under the Brussels I Regulation (Case C-352/13 CDC Hydrogene Peroxide, [35]–[36]).
An interesting, and arguably unfortunate, side effect of this restrictive interpretation is that it may even exclude the consolidation of the claims of other Austrian consumers in the same forum, considering that the second alternative of Art 16(1) does not only contain a rule of international jurisdiction but also determines local (internal) jurisdiction. In this regard, the Advocate General argued that an additional forum in which such consumer claims could be brought could be created under national law (Opinion, [117]), a proposition that does not appear easily reconcilable with the clear wording of Art 16(1).
Contrary to the claimant’s press release, though, the fact that a consumer is not allowed to avail him- or herself of the privilege in Art 16(1) Brussels I in order to bring the claims 25,000 other consumers that have been assigned to him at his or her domicile does not mean that company’s can ‘divide and conquer’ and ‘block enforcement of consumer rights’. A claimant is free to rely on the first alternative of Art 16(1) Brussels I (which mirrors Art 2(1)) and bring all claims in the defendant’s Member State of domicile, the procedural law of which will then decide on whether the claims may be consolidated.
III. A Nuanced Approach to the Consumer Exception
What seems to emerge from the decision is a nuanced approach to the special provisions for consumer contracts. The Court applies a rather flexible interpretation to Art 15(1) Brussels I, allowing for changes of circumstances to be taken into account but also distinguishing the enforcement of (consumer) rights from other types of professional activities. At the same time, it interprets the special head of jurisdiction in Art 16(1) restrictively, limiting the privilege to each individual consumer and excluding the possibility of other consumers assigning their claims to one who is domiciled in what may appear as a more favourable forum.
Of course, there may well be strong arguments for the existence of such a possibility, especially in cases where each individual claim is too small to justify litigation but the sum of them is not. But it seems questionable whether Art 16(1) Brussels I would be the right instrument to create such a mechanism of collective redress – and, indeed, whether it should be the Court’s role to implement it.
Sharia law in Greece: Blending European values with Islamic tradition
The Hellenic Republic is the sole EU Member State which provides for the application of Sharia law in its territory for more than a century. A recent amendment is granting Greek Moslems the right to opt-out, and resort to domestic civil law. At the same time, the new law respects the right to opt-in for the application of Sharia law, upon the condition of mutual agreement between the parties.
Law 4511/2018 was enacted on January 15. It contains only one article (the second simply declares that the law will be in force upon publication in the State Gazette), which amends the previous status of Sharia courts in Greece. A new Paragraph (4) is added to Art. 5 Law 1920/1991. By virtue of the new provision, the jurisdiction of the Mufti becomes the exception, whereas (until today) it was the rule for Greek Moslems living in the region of (Western) Thrace. The Mufti has jurisdiction for a vast number of family and succession matters, which are listed under Article 5.2 Law 1920/1991. A prerequisite is that the parties have submitted the above matters to Sharia law.
The new law grants the right to each party to seek Justice before domestic courts, and in accordance with Greek substantive and procedural law. The Mufti may exercise jurisdiction only if both parties file an application for this cause. Once the case is submitted to the Mufti, the jurisdiction of national courts is irrevocably excluded.
In addition, the new law paves the path for a more structured procedure before the Mufti: A drafting Committee will be authorized to prepare a decree, which will shape (for the first time) the Rules and Regulations of the Mufti ‘courts’. Signs of a formalized process are already clearly visible in the new law (Article 4.b).
Inheritance matters are also regulated by the new legislation: In principle they are subjected to Greek law, unless the testator solemnly states before a notary public his wish to submit succession matters to Sharia law. A parallel application of Greek and Sharia law is not permitted. However, revocation of the testator’s declaration is allowed, pursuant to Greek succession law provisions embedded in the Civil Code.
The new law has certainly conflict of laws ramifications too, most notably in light of the recent Sahyouni case of the CJEU. In this respect it is important to underline that all decisions rendered by the Mufti are passing through a hybrid process of domestic exequatur, which is rudimentarily regulated under Article 5.3 Law 1920/1991. Failure to submit the Mufti decisions to domestic courts’ scrutiny, deprives them of res iudicata and enforceability. Hence, EU Member States courts, whenever confronted with a request to recognize or enforce Mufti decisions within their jurisdiction, will always have to examine whether a Greek court has granted full faith and credit to the Mufti’s ruling.
Japanese Supreme Court Renders Decision on Hague Abduction Convention
On December 21, 2017, the Japanese Supreme Court rendered a decision on the Hague Abduction Convention. The Court upheld a lower court decision in favor of the Japanese mother, even though she had turned back on her promise to return the kids from a visit to Japan, and even though that same court had earlier issued a return order in favor of the American father. The matter had received international press attention, and even a Congressional subcommittee hearing.
Japan had long refused to join the Hague Convention, and when it did, in 2014, critical observers already expected that courts would find ways to undermine it. Those observers see themselves vindicated.
Colin Jones reports critically on the decision; he has previously written on Japan’s joining the Convention and on reluctance to enforce it. Useful background from the Law Library of Congress is here.
Japanese accession to the Convention has been a frequent scholarly topic, both in Japan and elsewhere. Yuko Nishitani, who had already written about “International Child Abduction in Japan” in (2006) 8 Yearbook of Private International Law 125-143, and who wrote a long report (in Japanese) for the Japanese Ministry in 2010, provided a brief analysis in 2011. Dai Yokomizo discussed the accession in (2012) Revue critique 799; Jun Yokohama did so in the Mélanges van Loon (2013, pp 661-72). Vol. 57 (2014) of the Japanese Yearbook of International Law contains articles by Tatsuki Nishioka and Takako Tsujisaka, Masayuki Tanamura, Masako Murakami, Martina Erb-Klünemann, and Nigel Vaughan Lowe. Takeshi Hamano helpfully explains the Japanese reluctance with regard to the Japanese ideology of the family. Outside of Japanese authors, Barbara Stark and Paul Hanley wrote most recently in the United States; the topic is also addressed in several student notes. The accession was also discussed by Bengt Schwemann (in German) and Francisco Barberán Pelegrín (in Spanish).
News
Webinar “Beyond the Civil – Common Law Divide: Islamic Shari’a Principles in Shari’a Based International Arbitration Disputes”, 14 March 2023
The Centre for Private International Law is organising an online research seminar on Beyond the Civil – Common Law Divide: Islamic Shari’a Principles in Shari’a Based International Arbitration Disputes on 14 March 2023, 14:00 – 15:30 UK time.
With the global growth in the Islamic finance industry, the conclusion of Islamic finance transactions, and the offering of Islamic finance products in non-Islamic states across the globe, intricate legal questions and applicable law issues have become exceedingly pertinent. It is in this context that the speaker, Prof Dr Mohamed Abdel Wahab, proposes to tackle the interplay between Islamic Shari’a principles and the applicable norms governing Shari’a-based contracts and disputes.
Conference on the extension of the jurisdictional heads of the Brussels Ia Regulation (3 May 2023 in Turin)
On 3 May 2023, a conference entitled L’estensione dei titoli giurisdizionali del Regolamento Bruxelles Ibis ai convenuti non domiciliate nell’UE will be held at Palazzo Capris, Via Santa Maria 1 in Turin, Italy.
The conference will focus on the possibility of an extension of the jurisdictional rules of the Brussels Ibis Regulation to non EU-defendants. The topic has also been covered by the 3rd project of the EAPIL Young Research Network and the forthcoming book condensing the results of that project will in fact be presented during the conference.
The conference will be held – for the most part – in Italian.
All are welcome to attend the conference in person. Remote attendance is also possible: the link can be requested at ennio.piovesani@unito.it.
The full programme is available here.
Rivista di diritto internazionale privato e processuale (RDIPP) No 4/2022: Abstracts
The fourth issue of 2022 of the Rivista di diritto internazionale privato e processuale (RDIPP, published by CEDAM) was just released. It features:
Christian Kohler, Honorary Professor at the University of Saarland, Private International Law Aspects of the European Commission’s Proposal for a Directive on SLAPPs (‘Strategic Lawsuits Against Public Participation’)
The Commission’s proposal for a Directive on SLAPPs (‘Strategic lawsuits against public participation’) aims at protecting journalists and human rights defenders who engage in public debates from manifestly unfounded or abusive court proceedings with cross-border implications. Inter alia, it protects SLAPP defendants against judgments from third countries that would have been considered manifestly unfounded or abusive if they had been brought before the courts or tribunals of the Member State where recognition or enforcement is sought, and allows SLAPP defendants to seek compensation of the damages and the costs of the third country-proceedings before the courts of the Member State of his or her domicile. This article examines the conflicts rules in question and discusses the broader private international law context of the proposed Directive, in particular the rules of jurisdiction and the mosaic approach of the CJEU for the interpretation of Article 7(2) of Regulation Brussels Ia. In order to limit the forum shopping potential of the present rules on jurisdiction and applicable law in defamation cases, an intervention by the EU legislature should be envisaged.
Pietro Franzina, Professor at the Università Cattolica del Sacro Cuore, Il contenzioso civile transnazionale sulla corporate accountability (Cross-Border Civil Litigation on Corporate Accountability) [in Italian]
Civil proceedings are brought with increasing frequency against corporations for allegedly failing to prevent or mitigate the adverse impact of their activity on the protection of human rights and the environment. Most of these proceedings are initiated by non-governmental organisations whose activity consists in safeguarding or promoting the collective interests at issue, or otherwise benefit from support provided by such organisations. A cross-border element is almost invariably present in these proceedings, as they often involve persons from different countries and/or relate to facts which occurred in different States. Litigation in matters of corporate accountability is, distinctively, strategic in nature. The aim pursued by those bringing the claim does not consist, or at least does not only or primarily consist, in achieving the practical result that the proceedings in question are meant, as such, to provide, such as compensation for the prejudice suffered. Rather, the goal is to induce a change in the business model or industrial approach of the defendant (and, possibly, of other corporations in the same field or with similar characteristics) and increase the sustainability of their corporate activity at large. The paper gives an account of the factors that determine the impact of the described proceedings, that is, the ability of those proceedings to effectively prompt the pursued change. The analysis focuses, specifically, on the factors associated with the rules of private international law, chiefly the rules that enable the claimant to sue the defendant before the courts of one State instead of another. The purpose of the article is not to examine the latter rules in detail (actually, they vary to a large extent from one State to another), but to assess the strategic opportunities, in the sense explained above, that the rules in question may offer to the claimant, depending on their structure and mode of operation.
The following review and comments are also featured:
Lenka Válková, Researcher at the University of Milan, The Commission Proposal for a Regulation on the Recognition of Parenthood and Other Legislative Trends Affecting Legal Parenthood
The developments in science and changing family patterns have given rise to many problems, including those of non-recognition of parenthood, which affects mostly children of same-gender parents and children in cases of surrogacy. The basic drivers of the current difficulties in recognising parenthood lie in the differences of the national rules on the establishment and recognition of parenthood and the lack of the uniform conflict rules and rules on recognition of judgments in the area of parenthood. Despite the copious case law of CJEU and ECtHR, which plays a crucial role in allowing flexibility in law with regard to parenthood, there is still no legal instrument which provides for a clear framework seeking to outline a consistent and systematic approach in this area. In 2021 and 2022, three important legislative actions have been taken. The Parenthood Proposal for a Regulation on jurisdiction, applicable law, recognition of decisions has been published on 7 December 2022. At the same time, the Final Report of the Experts Group on the Parentage/Surrogacy Project of the HCCH has been issued on 30 November 2022. Moreover, the Report on Review of the Implementation of the European Convention on the Legal Status of Children Born Out of Wedlock has been prepared in November 2021 as a preliminary step to a possible future update of the substantive law provisions of the Convention. All regulatory initiatives are addressed in this article, with a special focus on the Parenthood Proposal. In particular, this article offers a first appraisal of the Parenthood Proposal in light of other two legislative efforts and examines whether the works on international level may eliminate the need for an action concerning recognition of parenthood at EU level.
Stefano Dominelli, Researcher at the University of Genoa, Emoji and Choice of Court Agreements: A Legal Appraisal of Evolutions in Language Methods through the Prism of Article 25 Brussels Ia Regulation
Starting from the consideration that emoji and the alike are becoming increasingly common in computer-based communication, this article transposes current debates in material law surrounding emoji and their aptitude to express intent into the field of choice of court agreement through the prism of Art 25 Brussels Ia Regulation. The aim of this article is to develop some hypotheses and methods for the assessment of emoji in the conclusion of choice of court agreements.
Michele Grassi, Research fellow at the University of Milan, Revocazione della sentenza civile per contrasto con la Convenzione europea per la salvaguardia dei diritti dell’uomo e delle libertà fondamentali (Revocation of a Civil Judgment for Conflict with the European Convention for the Protection of Human Rights and Fundamental Freedoms) [in Italian]
This article comments on the recent reform of the Italian Code of Civil Procedure, with a specific focus on the introduction of the possibility to seek revocation of a civil judgment conflicting with a decision of the ECtHR. The possibility to re-open proceedings in breach of the ECHR was not contemplated by the previous rules applicable to the matter, and the Italian Constitutional Court had excluded that the obligation of Contracting States to conform to the judgments of the ECtHR could imply the need to review national res judicata in civil or administrative law matters. Against this background, this article examines the new mechanism of review of national decisions introduced by the recent reform, pointing out that such mechanism has been designed to apply in limited circumstances and that, consistently with the reparatory perspective adopted by the Italian Constitutional Court, it gives little to no consideration to the obligation of cessation of international wrongful acts consisting in violations of human rights protected by ECHR.
This issue also features an account by Silvia Favalli, Researcher at the University of Milan, Bellini c. Italia: Il Comitato ONU sui diritti delle persone con disabilità si pronuncia sulla situazione dei caregiver familiari in Italia (Bellini v. Italy: The UN Committee on the Rights of Persons with Disabilities on the Situation of Family Caregivers in Italy) [in Italian].
Finally, this issue features the following book review by Francesca C. Villata, Professor at the University of Milan: Louise MERRETT, Employment Contracts in Private International Law, Oxford University Press, Oxford (2nd ed., 2022) pp. XXXII-329.