Thursday, 31 January 2013

Belov (C-394/11) case remains unsolved - CJEU without jurisdiction

In September last year we commented on the AG Kokott's opinion in the Belov case (C-394/11). The case concerned the lack of access of consumers to electricity meters in two Roma districts of a Bulgarian city, Montana. Mr Belov, one of the Roma inhabitants of Montana, complained that he has been discriminated against on the basis of his ethnic origin, since the electricity provider made it more complicated for him than other consumers to check his electricity usage. AG Kokott recognized, indeed, that the case fell within the scope of the Directive 2000/43 on equal treatment and that on the grounds of its provisions there could be indirect discrimination found in this case.

The CJEU issued a judgment today in this case and disagreed with the AG's opinion. The CJEU does not consider itself as having jurisdiction to answer the questions referred to it in this case, due to the fact that the body referring the case could not be considered either as a court or a tribunal. Only national courts and tribunals are allowed to apply for the preliminary ruling from the CJEU, and the body in the mentioned case did not have compulsory jurisdiction nor "sufficient guarantees as to its independence", nor did the proceedings pending before it were "intended to lead to a decision of a judicial nature". (Par. 37)

This was an interesting, and very political question, that was referred to the CJEU and, unfortunately, we will not get an answer to it.

Whatever happens, air passengers need to be cared for - CJEU judgment in McDonagh (C-12/11)

This morning, the Court of Justice of the EU delivered its judgment in the McDonagh case, which concerned air carriers' obligations to take care of passengers whose flights were cancelled as a consequence of the eruption of the Eyjafjallajökull volcano in April 2010. In line with Advocate-General Bot's opinion in the case (on which we reported earlier), the Court finds the following, as summarised in the press release regarding the judgment:

'EU law does not recognise a separate category of "particularly extraordinary" events, beyond "extraordinary circumstances", which would lead to the air carrier being exempted from all its obligations under the regulation, including those to provide care. If circumstances such as those at issue in the present case went beyond, due to their origin and scale, the scope of "extraordinary circumstances", it would in fact mean that air carriers would be required to provide the care referred to in the regulation only to air passengers who find themselves, due to cancellation of a flight, in a situation causing limited inconvenience. On the other hand, passengers who find themselves in a particularly vulnerable state in that they are forced to remain at an airport for several days would be denied that protection.'

Furthermore, 'the regulation does not provide for any limitation, either temporal or monetary, of the obligation to provide care to passengers whose flight is cancelled due to extraordinary circumstances. Thus, all the obligations to provide care to passengers are imposed on the air carrier for the whole period during which the passengers concerned must await their re-routing.'

Finally, 'while the obligation to provide care entails financial consequences for air carriers, they cannot be considered disproportionate to the aim of ensuring a high level of protection for passengers.'

In general this ruling seems to be of a quite consumer-friendly nature, taking into consideration the interests and needs of passengers who experience delays and 'involuntary rerouting' because of volcano eruptions, snowfall or other extraordinary circumstances. However, given the fact that air carriers may pass on the costs incurred as a result of the obligation to take care of stranded passengers to airline ticket prices, it remains to be seen how air passengers will eventually appreciate the consequences of this judgment (as Joasia also pointed out in her earlier comment on the A-G's opinion on this blog).

Monday, 28 January 2013

A year into the Data Protection reform

It has been one year since the European Commission announced its plans to reform the EU's 1995 data protection rules with an aim to strengthening online privacy rights. The issues that need to be addressed in this review are not only the result of the rapid development of the internet in the past years, but also resulted from the diverse implementation measures adopted by the Member States. The 1995 rules were of a minimum harmonisation character which led to fragmentation of online privacy protection measures within the EU and administrative burdens in its enforcement. The current news cycle underlines the aims of the review as well as its potential benefits both to consumers and to businesses. (European Data Protection Day 2013) The draft law is now in the process of being assessed by the European Parliament, that is expected to vote on it in the end of April. The Council also plans to tackle this issue within the current, Irish Presidency, which would mean that the whole process could end successfully by the end of June 2013. (The Data Protection reform - One Year On)

More than words?

The review of the Package Travel Directive has been discussed by the European Commission for quite some time now, and it seems that the debates are not over yet. Another round of talks will take place this week hopefully finally leading to a harmonised approach towards, e.g., regulation of the dynamic packaging in the EU. (Commission examines options)

Friday, 25 January 2013

CESL and Impact Assessment

In view of coming discussions on the proposed Common European Sales Law Regulation, the European Parliament has requested its Impact Assessment Unit to give an appraisal to the Impact Assessment which the Commission has attached to its 2011 proposal. The result of the Unit's work has now been released.

Starting with the document's conclusions, the evaluation would seem very positive: all in all, "The Commission has made considerable efforts to provide a very detailed and transparent impact assessment in which the arguments are clear and logically structured and the limitations and uncertainties of their analysis is acknowledged."

The Commission bases its proposal on the necessity to reduce transaction costs resulting from legal diversity in contract law in order to foster cross-border (online) trade.  As a consequence, the concept of "transaction costs is central to the Impact Assessment (hence IA). 

The EP's document notices that "the way the Commission calculates transaction costs can validly be the object of criticism and is disputed by numerous stakeholders and academics". This criticism, however, must be measured against the fact that "there is [...] no generally accepted definition of the concept of 'transaction costs' and that the method for calculating such costs in contract law is not yet scientifically established."

Is then everything ok? Not really. At the bottom of the conclusions page, the report accompanies praise of the Commission's "transparency" with regard to its methodology with a remark that, however easy to access, eurobarometer surveys are not a great basis for IAs.The more so, in this case, since the respondents in the studies considered were not asked about the CESL but about a "single European contract law"- not quite the same thing (p. 23).
 Furthermore, reading into the report, less "innocent" deficiencies are to be detected. For instance, the IA considers only a limited set of alternative scenarios, and "contrary to the Commission's IA guidelines, the problem definition does not appear to include a scenario describing how the baseline scenario is likely to develop in the future without any new EU action. (p.17).  further, it has ignored the IA Board's invitation to present stakeholders opinions throughout the Impact Assessment and not only in an Annex (p. 25). The report also notices how the statistics used by the commission "could be interpreted differently to demonstrate the contrary", or the very marginal relevance of contract law-related transaction costs to the (under)development of the internal market. 

What then? Even though the Commission's relaxed used of data should be a matter of concern for all those interested in the evolution of European (not only consumer) law, on this spot we can probably agree with the report that, even if the Commission had very badly overestimated the possible impact of the CESL, "given the optional nature of the instrument,  the situation would just be equivalent to the no EU action scenario". Much ado about nothing, but much more fun for lawyers.

Football ≠ money - CJEU judgment in Case C-283/11 Sky Österreich v Österreichischer Rundfunk

This week, the CJEU handed down its preliminary ruling in the Sky Österreich case, concerning the question whether Sky had to grant the Austrian public broadcasting service the right to transmit short news reports on Europa League matches involving Austrian teams, without receiving any compensation in return. In line with A-G Bot's opinion (on which we reported in an earlier post on this blog), the Court held that:

'Consideration of the question raised has not disclosed any factor of such a kind as to affect the validity of Article 15(6) of Directive 2010/13/EU of the European Parliament and of the Council of 10 March 2010 on the coordination of certain provisions laid down by law, regulation or administrative action in Member States concerning the provision of audiovisual media services (Audiovisual Media Services Directive).'

In other words, Sky's rights under the EU Charter of Fundamental Rights do not preclude the compensation which holders of exclusive broadcasting rights may seek from other channels for short news reports from being limited to technical costs.

As regards the right to protection of property, the Court is of the opinion that Sky cannot rely on this right in the present case. Although exclusive contractual broadcasting rights have asset value, 'when Sky acquired those rights by means of a contract (in August 2009), EU law already provided for the right to make short news reports, while limiting the amount of compensation to the additional costs directly incurred in providing access to the signal'.

Following its earlier case law, furthermore, the Court holds that the freedom to conduct a business, on which Sky sought to rely, 'is not absolute, but must be viewed in relation to its social function' (referring to Joined Cases C‑184/02 and C‑223/02 Spain and Finland v Parliament and Council [2004] ECR I‑7789, paragraphs 51 and 52, and Case C‑544/10 Deutsches Weintor [2012] ECR I‑0000, paragraph 54). In the present case, restrictions on the freedom to conduct a business are justified in light of the public interest, in particular the fundamental freedom to receive information and the promotion of media pluralism. According to the Court, the contested legislation strikes a fair balance between the rights and freedoms at issue.

See the CJEU's press release for a summary of the judgment.

Thursday, 24 January 2013

Nationality of food 2

In our previous post on Nationality of Food we mentioned that BEUC gathered consumers' views on origin labelling of food. The survey results have now been published (BEUC consumer survey on origin labelling of food). You may also be interested in shorter summary thereof - BEUC Factsheet.

Insurance mediation

BEUC published a position paper on the plan of the European Commission to review the Insurance Mediation Directive (IMD). Consumers often report problems with regards to insurance being sold to them by intermediaries and they are especially vulnerable when concluding insurance contracts, due to the rarity of situations they encounter when they make use thereof, which prevents them from learning which insurance contract would fit them the best. Obviously, the insurance intermediaries would have a significant influence on consumers and their advice should be careful, well-thought through and of high quality. The improvements that are being sought in the IMD concern, among others: 

  • an inclusion of a duty to act honestly, fairly and professionally, in accordance with the best interests of the customers;
  • upholding the same level of protection regardless the distribution channel of the insurance;
  • providing consumers with clear information about the status and remuneration of the insurance seller;
  • disclosing the nature, basis and structure of the intermediary remuneration;
  • prohibiting of tying practices;
  • compulsory participation in procedures for impartial and independent out-of-court settlement of disputes.

Still, the BEUC considers the proposal not to be sufficiently progressive and argues that additional changes should be introduced, e.g.:

  • broadening the scope of the IMD to cover all intermediaries selling insurances on an ancillary basis;
  • prohibiting contingent remuneration linked to any targets related to the activities run by the intermediary (incl sales volume and number of claims reported);
  • preventing conflict of interests by appropriate design of remuneration schemes and performance evaluations;
  • obligation to disclose any remuneration related to the mediation activity;
  • standardised information disclosure;
  • training intermediaries by independent from insurance companies agencies, approved by competent authorities;
  • obligation for intermediaries to assess their targeted public and suitability of the product for that public prior to distribution of investment insurance products.

Monday, 21 January 2013

EU Licence to Drive

As of this week all European consumers that get a new driving license (or exchange the old one) will receive the same plastic "credit card" with a standard EU format. The harmonisation aims to limit driving license fraud and to improve road safety across the EU.

"Traffic police across Europe are currently expected to recognise more than 100 different types of paper and plastic driving licence. ID photos may be long out of date, the categories for which the driver is licenced unclear and the document may be easy to forge. Fake driving licences are a licence to kill, that is why we need licences which are easy to read, easy to understand and very difficult to falsify". (New European Driving Licence)

Informal Council

Last Friday the EU Ministers held an informal council during which they assigned priority to further works on the Data Protection Reform as well as to the new cross-border Insolvency law. Another subject that was tackled was harmonisation of efforts to fight hate crime and intolerance in Europe. (see more Data Protection reform and cross-border Insolvency law prioritised by EU Ministers)

Friday, 18 January 2013

Carry-on with a carry-on luggage

The Members of the European Parliament also appealed to the European Commission to draft a regulation on carry-on luggage that would end arbitrary policies of some airlines in setting charges and restriction thereon. The European Commission could determine a reasonable hand luggage allowance as well as set a rule that hand luggage would be checked during check-in and not only at the gate. However, the Commissioners don't see it as an issue that needs to be regulated:
"Commissioner De Gucht admitted that hand luggage restrictions vary greatly but said "the Commission sees this as the reflection of diversity in a very competitive market", adding that he was not in favour of more regulatory action." (MEPs urge Commission to draft common rules for carry-on luggage)

Made in China

The European Parliament once again asked the European Commission to prepare a draft regulation that would introduce mandatory "made in" labels on goods imported from third countries. So far, the Member States (and their representatives in the Council) were not able to agree on mandatory origin labels, which harms consumers' interests, weakening their right to make informed choices and enabling traders to mislead consumers. The European Parliament believes, however, that the European Commission should attempt another approach to this issue and not just drop it completely. (EU must require "made in" labels on imports from third countries, say MEPs)

Thursday, 17 January 2013

ECJ in Köck: More on maximum harmonisation in the Unfair Commercial Practices Directive

Today the ECJ published its judgment in the Köck case, on the maximum harmonisation of the Unfair Commercial Practices Directive. Cases like VTB-VAB and Mediaprint already showed us, without much surprise, that Member States are not allowed to go further in protecting consumers from unfair commercial practices than provided by the Directive itself. In particular, this means that Member States cannot prohibit certain trade practices (such as combined sales, see VTB-VAB) as such. The Directive has a black list with a limited number of trade practices that are prohibited, and apart from this list, trade practices can only be forbidden if they are unfair in the meaning of the Directive's general provisions.

The Köck case very much follows the reasoning of VTB-VAB and Mediaprint. The Köck case deals with specific rules on shops' "clearance sales" in the Austrian UWG (Gesetz gegen den Unlauteren Wettbewerb; Austrian Unfair Competition Law). According to Articles 33a-d of this law, Austrian shop owners need to obtain a permit if they want to have a clearance sale. Mr. Köck had a clearance sale without filing for a permit, and was subsequently brought before the court by an organisation safeguarding fair competition. The question before the ECJ is whether the Austrian law breaches Directive's maximum harmonisation, by requiring the permit.

The ECJ firstly determines that "clearance sales" can be seen as "commercial practices", and thus clearance sales fall within the material scope of the Directive (25-57). Secondly, the Austrian rule falls within the scope of the Directive in terms of its objective, as it is meant to offer consumers protection against unfair practices (28-33). Finally, it is determined that the rule offers more protection than provided by the Directive, as it gives a general prohibition on "clearance sales" without having a permit, while these are not generally forbidden by the Directive. In some cases, however, Member States are allowed to have a system of ex ante control with permits, but this does nor apply for the present case:

45 Given that anticipatory or preventive measures on the part of the Member State may in certain circumstances prove more adequate and more appropriate than subsequent measures ordering the cessation of a commercial practice that has already been carried out or is imminent, those national measures may consist inter alia in providing for a system of prior authorisation, with penalties for non compliance, of certain practices whose nature makes such measures necessary with a view to combating unfair commercial practices.
46 However, the system laid down by those national measures, which constitutes the transposition of the Directive, cannot result in a commercial practice being prohibited solely because prior authorisation has not been granted by the competent authority, without there having been an assessment of the practice’s unfairness.
47 First, the Directive precludes national legislation which excludes the review against the criteria set out in Articles 5 to 9 of the Directive of a commercial practice not listed in Annex I to the Directive.
48 Secondly, national legislation under which it is not until after the prohibition laid down for failure to comply with the prior authorisation requirement that the commercial practice is examined as to its unfairness is incompatible with the system established by the Directive, as that practice, because of its nature and in particular because of the time factor involved, is thus deprived of economic sense for the trader.
49 National legislation such as that referred to in the preceding paragraph would amount to enacting a general prohibition of the commercial practices made use of in a particular system even though the possible unfairness of those practices has not even been assessed, in accordance with the case-law referred to in paragraph 35 above, against the criteria set out in Articles 5 to 9 of the Directive.

The case is in line with the previous judgments, but it also raises questions. Most importantly, the question now is: under what circumstances and with what kind of procedures can Member States make use of preventive measures?

Click here for the judgment

Wednesday, 16 January 2013

BEUC argues for no roaming charges

January has been quite so far with news concerning European consumers (from a legal perspective). Perhaps it's due to the winter holiday season, or the flu season, but regardless we find ourselves with less subjects to report on than usually. 

One thing I may announce here is the publication of the response of the BEUC to the public consultation on the revision of the European Commission's Recommendation on relevant markets in the electronic communications sector susceptible to ex ante regulation (which mainly argues for further integration of the EU telecommunications market). The BEUC's response pleads for abolishing of roaming charges, as well as simplifying telecom market, increasing consumers' choice and improving quality of services.

"Ex ante regulation plays an important role as it can prevent abuses by incumbent operators and promote the development of innovative services so that consumers have more choices of telecoms services at affordable price." (p. 2 of the response)

Friday, 11 January 2013

Collective copyrights management

The BEUC published also this week its response to a proposal for a Directive on collective management of copyright, related rights and the multi-territorial licensing for online musical works. In its response the BEUC explains consumers interests in this law (enjoying access to more diverse content, hopefully, under more competitive prices) as well as suggests ways to improve the proposal (esp. with regards to more effective enforcement mechanisms). For the document see here.

Nationality of food

On Thursday 24 January there will be a press briefing by the BEUC presenting results of the survey on origin labelling of food. Not all European consumer are able to answer questions as to what country their food comes from, and it could be information relevant to them. BEUC formulated some recommendations for improved and clear labelling of food that will be presented during the briefing. (Invitation)

Thursday, 10 January 2013

Dwelling in possibility

As a follow-up to the previous post, those of you interested in the design of an adequate system of remedies might like to know about the following upcoming seminars:

- A workshop on 'A new architecture for consumer law' organised in Florence on 18 and 19 January (for which Hans Micklitz's paper on the topic will serve as a starting point)
- A seminar with Christian Joerges in the Dialogue Series of the project 'The Architecture of Postnational Rulemaking' (based on his recent work on 'Europe's Economic Constitution in Crisis')

While looking for inspiration for a paper of my own that has to deal with some foundational issues of European private law, furthermore, I took the time to read up on some more comprehensive views on legal analysis, and concepts and roles of the law. As Zadie Smith once wrote: 'Other people’s words are the bridge you use to cross from where you were to wherever you’re going'. Some people's words that crossed my path (and mind) these days were those of Herbert Hart, a third edition of whose 'The Concept of Law' recently appeared (with an excellent introduction by Leslie Green), Neil Komesar, who wrote a beautiful paper reflecting on his work on comparative institutional analysis, and Melvin Eisenberg, contemplating on 'Basic Contract Law' and teaching.

Are some consumers more equal than others?

In case of a dispute arising from a contract you concluded as a consumer, would you (and: should you) want to have your day in court? Or can your interests be served equally well or maybe even better in arbitration proceedings?

In a recent working paper on 'Arbitration and Access to Justice', Omri Ben-Shahar (University of Chicago Law School) addresses these questions from a law & economics perspective. On the basis of examples concerning product liability, health care, information duties and accommodations for disabilities, he argues that in certain circumstances 'open access' policies may unintentionally have the effect of poor, less sophisticated consumers subsidising access to justice for wealthier consumers. This may be the case if:

'(1) Wealthier sub-groups [of consumers] are more likely to enjoy the benefits of open access; and
(2) Poorer sub-groups pay a share for the funding of the open access that exceeds their proportional benefits.'

The overall results are summarised as follows:

'Mandatory arbitration clauses in consumer contracts are widely regarded as problematic because they limit consumer’s access to judicial forums, to fair procedures, and potentially to any kind of remedy. But rather than looking at consumers as a group, I examine which sub groups of consumers are affected by this limitation more than others. I argue that in most circumstances, access to courts benefits the elite, not the weak. It is a species of open-access policy that has an unintended regressive effect. Paradoxically, rules that limit the use of pre-dispute arbitrations clauses hurt, rather than protect, weaker consumers, as they mandate a regressive reallocation. I also consider the role of class actions, and whether weak consumers are potentially the indirect beneficiaries of class action litigation. This argument has theoretical merit, but it, too, is limited in ways that are often unappreciated.'

The paper offers a very interesting and refreshing view on, in Ben-Shahar's words, the 'seductive logic of the access-to-justice advocacy'. This is of importance for European consumers, too, for instance with regard to the proposal for a Common European Sales Law. As regards the EU context, nevertheless, the conclusion of the paper puzzles me somewhat, insofar as it criticises the 'access justice' model for European private law proposed by Hans Micklitz. If 'access justice' (not to be confused with 'access to justice') is understood as aiming at creating a legal framework that provides weaker consumers with real possibilities to participate in the European internal market, then I have difficulty seeing why a well-designed law of remedies reflecting this concept of justice would necessarily be at odds with Ben-Shahar's conclusions. This is of course not to say that the current practice of European consumer law complies with theoretical insights in all respects... As for mandatory arbitration proceedings for consumers, however, I think that for instance the CJEU's preliminary ruling in the Alassini case might be considered to be in line with both the economic and social justice arguments named here, as well as with fundamental rights argumentation

Tuesday, 8 January 2013

Strengthening data protection in the EU

Today, two draft reports (by Albrecht and Droutsas) were presented in the European Parliament on the reform of the EU's data protection rules (as proposed a year ago by the European Commission). Both reports are positive and support a "a coherent and robust data protection framework with strong end enforceable rights for individuals". (Commission welcomes European Parliament rapporteurs' support for strong EU data protection rules) This support is given both to the objectives set by the European Commission in establishing a new framework on data protection, as well as to the suggested package approach (substantive and procedural rules tackled at the same time). 

There are, of course, also changes that the rapporteurs suggest, such as reinforcement of the right to be forgotten and other individuals' rights (strengthening of explicit consent by making the language easier in privacy policies, anonymous use of data etc.). They also mention the need to replace the Directive with a Regulation as well as the need to establish an independent EU data protection agency that could take legally binding decisions, which would facilitate enforcement of these provisions. 

The LIBE Committee of the EP will discuss these reports on 10 January.