Which Information Protection Together With Consumer Constabulary Applies To Amazon? Comments On The Vki 5 Amazon Judgment

Lorna Woods, Professor of Internet Law, University of Essex

The recent CJEU judgment inward VKI v Amazon concerns jurisdiction both inward the context of conflict of laws (applicable consumer laws) together with the Data Protection Directive.  Essentially, the Court of Justice had to determine which Member State’s information protection constabulary should apply where goods are sold across national borders but inside the EU. In this, it forms role of a stream of illustration constabulary (both decided together with pending), dealing alongside the powers of states (and their institutions) to protect those inside their boundaries notwithstanding the digital internal market.

Facts

The illustration concerned Amazon, a well-known large fellowship engaged inward on-line selling. It has a branch established inward Luxembourg.  It has a domain advert ending ‘.de’ together with in that location is a High German linguistic communication page.  It concludes sales alongside customers inward Austria. The fellowship has no registered address inward Austria.  Whenever a client buys goods via Amazon the transaction is governed past times Amazon’s unilaterally imposed measure price together with conditions. One term inward the understanding is that the constabulary applicable to the contract is that of Luxembourg. 

Influenza A virus subtype H5N1 consumer protection trunk inward Republic of Austria (VKI) sought to challenge this: Austrian constabulary provides higher protection for the consumer than the equivalent Luxemburgish constabulary together with it sought to injunct Amazon on the ground of Directive 2009/22/EC on injunctions for the protection of consumers’ interests through an activity brought earlier the Austrian courts. Amazon countered that it has no legal connectedness alongside Republic of Austria – it is non established there.  While in that location were questions regarding the applicable constabulary together with the fairness of the jurisdiction clause inward the contract inward the low-cal of the Unfair Contract Terms Directive, in that location was unopen to other number concerning information protection. There were clauses inward Amazon’s measure price together with weather condition which indicated that information mightiness travel exchanged alongside credit-risk assessment together with fiscal services companies inward Federal Republic of Federal Republic of Germany together with Switzerland.  Again VKI argued that Austrian information protection rules should apply.

Questions Referred

While on the confront of it, the affair mightiness appear to travel 1 of contract constabulary so governed past times the Rome I Regulation on the constabulary applicable to contractual obligations, the shape of relief sought – the injunction – mightiness appear to convey the enquiry inside the Rome II Regulation, which regulates the constabulary applicable to non-contractual obligations – a fact which mightiness touching on the final result inward the case.  The national courtroom asked whether an activity for an injunction cruel inside Rome II together with if so, where the impairment mightiness said to receive got taken house so every bit determine jurisdiction.  Irrespective of the final result to that question, the referring courtroom also asked almost the impact of the Unfair Contract Terms Directive on the jurisdiction clause. It likewise also wanted to know whether the processing of information should travel regulated past times Grand Duchy of Luxembourg alone, or must the processor ‘also comply alongside the information protection rules of those Member United States to which its commercial activities are directed?’

Judgment

The ECJ dealt alongside the questions on Rome I together with II together.  It noted that they should travel interpreted consistently alongside 1 another, every bit good every bit the Brussels I Regulation (which concerns the carve upwards enquiry of which country’s court has jurisdiction inward cross-border cases).  The Court referred to its previous illustration constabulary inward relation to the previous Brussels Convention, together with the Brussels I Regulation replacing the Convention, to conclude that an activity for injunction inside the price of Directive 2009/22/EC (on the protection of consumers’ interests) falls inside the pregnant of a non-contractual obligation for the purposes of Rome II.  Article half dozen of the Rome II Regulation deals alongside unfair competition.  In that circumstance, the constabulary applicable is that ‘of the province where competitive relations or the collective interests of consumers are, or are probable to be, affected’.  The Court followed the Advocate General (Opinion, para 73) to handle that Article 6(1) covers the utilization of unfair price inserted inward measure price together with conditions, every bit ‘this is probable to touching on the collective interests of consumers every bit a grouping together with hence to influence the weather condition of contest on the market’ (para 42). Here the relevant province is that where the consumers to whom the task directs its activities reside together with who are protected past times the relevant consumer protection trunk (para 43).

Article 4(3) of the Rome II Regulation states that the constabulary of unopen to other province applies if it is clear that the tort is apparently to a greater extent than closely connected alongside it.  The ECJ approved the approach of the Advocate General (para 77) where he advised that Article 4(3) is non good suited to unfair competition. Article half dozen is aimed at protecting collective interests together with cannot travel displaced past times private understanding (para 45).  Allowing the term of a contract to constitute ‘closer connection’ for the purposes of Article 4(3) would hateful that such parties would travel able to avoid the weather condition for ‘freedom of choice’ laid downwardly inward Article xiv Rome II.

The enquiry of which constabulary applies to the assessment of the unfairness of the contractual terms, however, falls nether Rome I, whether or non it applies to a collective or private action.

The Court together with so considered the Unfair Contract Terms Directive (Directive 93/13). That Directive contains the regulation that a contractual term which has non been individually negotiated – that is, drafted inward advance past times the seller/supplier - must travel regarded every bit unfair if it causes a important imbalance to the detriment of the consumer. The Court agreed alongside the Advocate General (Opinion para 84) that the price inward number hither cruel inside that Definition (para 63). The enquiry of unfairness is to travel determined on the facts past times the national courtroom inside the compass of criteria determined past times the Court of Justice. Since pick of constabulary clauses are inward regulation permissible, such clauses are only unfair if its wording or context creates an imbalance – so if it is non drafted inward intelligible linguistic communication or if it seeks to deprive consumers of protections from which it would non travel possible to derogate.  Here, this way that inward relation to an Austrian consumer, the national courtroom volition ‘have to apply those Austrian statutory provisions which, nether Austrian law, cannot travel derogated from past times agreement’ (para 70).

The Court together with so turned to Article iv of the Data Protection Directive. Under Article 4, each Member State regulates processing carried out inward the context of activities of an establishment inward that Member State. Essentially the enquiry is whether Amazon was established inward Austria. The Court referred to its recent Weltimmo judgment, discussed here, which ruled that an task does non demand to receive got a branch or establishment.  Rather, it is a enquiry of the stability of the organization together with the effective practise of activities (para 77) that is important.  Further, Article iv does non require that the processing is carried out past times the task itself; the show is whether processing is carried out inward the context of its activities (para 78).  This is a enquiry of fact for the national court.

Comment

In price of the importance of this judgment, nosotros should banking concern annotation that the facts inward number are non uncommon – many on-line businesses receive got headquarters inward 1 Member State but conclude contracts across multiple Member States. 

As regards the questions relating to applicable laws generally, nosotros are right away inward a province of affairs where national courts may receive got to assess questions pertaining to injunctions according to a unlike constabulary from that relating to the contract itself.  This is non surprising, given illustration constabulary inward other fields, but it is the start confirmation of this dot inward the e-commerce context.  As an aside, it is also the start judgment on the Directive on injunctions for the protection of consumers’ interests.  It is worth noting that the Court seemed critical of attempts to bypass the protection inward Article of half dozen Rome II through the notion of ‘manifestly closer connection’ inward Article 4(3).  It also specifically excluded the pick of constabulary clause inward the understanding every bit a determining constituent inward this regard too.

Perhaps the most interesting facial expression is, however, the information protection aspect.  The Court did non become into much item (perhaps signalling behind the scenes disagreement) together with in that location are unopen to curious silences every bit to unopen to points touched upon past times the Advocate General.  The Advocate General had inward fact suggested that Article iv had a ‘dual role’ (Opinion para 110).  So piece Weltimmo mightiness apply to determine applicable law, the wide approach to ‘establishment’ found inward GoogleSpain to determine the outer territorial limit of the Data Protection Directive did non apply to the intra-EU setting.  The driver for the conclusion inward GoogleSpain was a wish to ensure that the Data Protection Directive applied at all; it was so relevant to external processors (Opinion, para 124).  In this case, if the Austrian laws did non apply together with so the laws of 1 of the other Member United States would together with so the extensive approach would non travel necessary.  This distinction was an invention on the role of the Advocate General; it was sure non visible inward Weltimmo inward which the Court relied on its reasoning inward GoogleSpain, together with nor was it apparent from GoogleSpain.  Further, the Advocate General seemed to travel to a greater extent than stringent almost finding ‘establishment’ than the Court inward Weltimmo.  For example, the fact that Amazon may supply an aftersales service inward Republic of Austria on its ain was insufficient inward his catch (Opinion, paras 121 together with 125); he also discounted the possibility that the accessibility of a website was likewise insufficient for this purpose (Opinion, paras 117 together with 120). 

Against this background, the quiet of the ECJ on the internal/external dot is striking, specially given the repeated references to the Opinion through the ease of its judgment.  So is its quiet on the dependent area of GoogleSpain. The Court’s reasoning is grounded only on Weltimmo.  On the 1 hand, nosotros could debate that the Court has non agreed alongside the distinction set forwards past times the Advocate General, but past times non applying GoogleSpain straight here, it has non ruled it out either. Note that the Article 29 Working Party (the advisory trunk gear upwards past times the information protection Directive) had applied the extensive interpretation from GoogleSpain inward its updated Opinion 8/2010. The Court hither also gave no farther guidance on the theme of establishment, taking convenient refuge no doubtfulness inward the dot that its role is to translate European Union constabulary together with non to assess facts.

Photo credit: www.creativeintent.co.uk 

Share this post