Key words: Facebook; data protection rights; consumer rights; professional use of consumer rights; class action; competent court; EEX.
Applicant in main action: [..].
Defendant: Facebook Ireland Limited.
Referring court: Oberster Gerichtshof (Austria).
Deadline for Member States to submit their brief: November 30, 2016.
Questions referred to the European Court of Justice:
The Supreme Court of Austria has referred the following questions, in accordance with Article 267 TFEU, for a preliminary ruling:
l. Is Article 15 of Regulation (EC) no. 44/2001 of December 22, 2000 on the jurisdiction and recognition and enforcement of judgments in civil and commercial matters [hereinafter: “Regulation no. 44/2001”] to be interpreted as meaning that a “consumer” in the meaning of this provision looses that status if he – after prolonged use of his private Facebook account to exercise his rights – publishes books, gives lectures (sometimes for a fee), operates websites, and collects donations in order to exercise his rights, and has numerous consumers transfer their rights to him with the promise that any proceeds of the proceedings, after deducting costs, will be paid to them?
2. Is Article 16 of Regulation No. 44/2001 to be interpreted as meaning that a “consumer” in one Member State, may, together with his own rights arising from a consumer transaction, also exercise at the forum actoris concurrent rights of other consumers, arising from their consumer transactions with the same defendant, in the same legal context, with residence:
a. in the same Member State,
b. in another Member State, or
c. in a third country?
if those rights have been assigned to him and the assignment is not part of commercial or professional activities of the applicant, but have the aim of jointly exercising those rights?
Facts, proceedings and arguments
The applicant has completed his law degree with a specialization in IT and data protection law, and is currently completing his doctoral studies, which deal with civil, criminal and administrative data protection aspects. Since 2008, he has been using Facebook, initially only for private purposes under a fake name. Since 2010, he has been using a specific Facebook account which he only uses for private activities such as sharing photos, chatting and corresponding with about 250 friends. On this account, he spells his name in cyrillic characters so he cannot be found by his name. Furthermore, since 2011 he has also been using Facebook through a Facebook page registered and edited by him, to report on the steps he has taken against Facebook, his lectures, his participation in panel discussions and media appearances, as well as his call to make donations and advertisements for his book.
The steps taken by the applicant against Facebool have been the subject of numerous TV broadcasts on Austrian, German and international channels, numerous radio broadcasts, as well as at least 184 articles in newspapers and magazines (including publications on the Internet), such as the Frankfurter Allgemeine Zeitung, Le Monde, The New York Times, Washington Post, Hong Kong Standard and The Week (India).
As early as August 2011, he served sixteen additional complaints to the Irish Data Protection Commission, and another six in September 2011. This Commission issued an audit report setting forth recommendations for defendant, and then issued a follow-up report. In connection with the spying program PRISM, the applicant filed in June 2013 another complaint (his 23rd) against the defendant, which eventually led to preliminary proceedings before the European Court of Justice regarding the “Safe Harbour” Decision of the European Commission.
In connection with the steps he took for the alleged infringements of his data protection rights, the applicant published two books, gave lectures – sometimes for a speaker’s fee – including for commercial broadcasters, registered several websites (blogs, online petitions, crowdfunding for proceedings against the defendant), founded an association for the exercise of the fundamental right to data protection, received several honours, and had alleged claims from around the world assigned to him so as to enforce them in the proceedings at hand. The applicant argues that his initiative aims to put pressure on Facebook, and his reports cause a flood of media reports.
The Association for the Exercise of Data Protection Rights is not for profit and aims at active enforcement of the fundamental right to data protection, the provision of information and media-activities to support such enforcement, and to create political awareness. Public interest test cases against companies potentialy infringing these rights should receive financial support. Additionally, necessary costs must be funded and donations must be collected, managed and distributed. To that end, one of the above websites (crowdfunding) of the applicant, which is the Association’s sole representative, was registered and managed. Meanwhile, the Association has collected donations amounting to EUR 60 000.
On one of the other websites, over 25 000 people have assigned their rights. On April 9, 2015, 50 000 people were put on a waiting list.
The class action is conducted by a public limited liability corporation which bears the financing costs (in exchange for a compensation of 20% of revenue) and supported by a PR agency. The costs of the Irish proceedings were capped at EUR 10,000. According to the applicant, he does not have to pay his lawyers for this procedure.
To support his activities, the applicant has formed a team of ten people, with a core of five. It could not be determined whether this support team is being paid. The necessary infrastructure is paid for via the applicant’s private account. Neither he nor the Association employs any personnel.
The Applicant works at his mother’s, which is where he earns his income. He receives additional income from renting out an apartment. He also has as of yet undetermined revenues from the sale of his books and from speaking engagements, where he is invited on the basis of his actions against Facebook, currently under the present action. In any event, he has received speaker fees in the past year for three to four lectures in the amount of EUR 100 to 500 each. The Applicant is now also using the huge global media interest in him due to his actions against the Defendant, in connection with his professional activities.
The Applicant asserts that the international jurisdiction of the Austrian Court of First Instance is based on the place where the consumer is domiciled (“Forum consumentis”) [Article 16, paragraph 1, second hypothesis Regulation No. 44/2001, old version]. The Defendant, among other things, raises the objection of lack of international jurisdiction. According to the Defendant, the Applicant cannot invoke its appeal to the “Forum consumentis“, because at the relevant time of filing his complaint, and also at the time of concluding the agreement on November 15, 2013, he was using Facebook for commercial purposes. Due their non-assignability, the “Forum consumentis” does not apply to the assigned rights.
The trial judge has dismissed the claim. The Applicant used Facebook also professionally, so he cannot rely on the “Forum consumentis“. The court that is competent for the transferors will not be the court of the assignee (the Applicant.
Upon appeal of the Applicant, the Court of Appeals has partly modified this judgment in the sense that it rejected the appeal (only) regarding the rights which did not personally relate to the Applicant. For the remaining part, the Court of Appeals, however, rejected the procedural defense of the Defendant. The jurisdiction rules for consumers in Regulation no. 44/2001 can only be of benefit to the consumer when he is personally a party to a lawsuit. Therefore, the applicant cannot successfully invoke Article 16, paragraph 1, second paragraph of Regulation No. 44/2001, old version, when he asserts claims assigned to him.
Both parties in the case have appealed this decision via an appeal in revision. In that regard, the Supreme Court (“Oberster Gerichtshof”) ruled as follows:
l. The appeals in revision are admissible.
2.1. In the present case, Regulation No. 44/2001 is yet to be applied. Pursuant to Article Article 66, paragraph 1, the new version [Regulation (EC) no. 2015/2012] applies only for procedeeings initiated after January 9, 2015.
2.2. Pursuant to Article 15, paragraph 1 of Regulation No. 44/2001, an applicant can only invoke the “Forum consumentis” of Article 16, paragraph 1, second paragraph of Regulation, when the subject of the procedure consists of an agreement or rights under an agreement concluded by the applicant for a purpose which can be regarded as outside his trade or profession. To determine the purpose of an agreement, the circumstances which are objectively recognizable for the counterpart of the consumer are decisive. Contracts with both a private and a trade or professional purpose, will be deemed a consumer agreement, if the commercial or professional aim is so incidental as to play only a minor role in the transaction taken as a whole (judgment of the Court, Gruber/BayWa AG, C-464/01, paragraph 39 and following).
2.3. The parties to the dispute disagree both about whether the Applicant actually is a consumer, so that he can rely on the “Forum consumentis” pursuant to Article 15 et seq of Regulation no. 44/2001, and as to whether the Applicant may invoke that “Forum consumentis” to assert the rights other Facebook users have assigned to him.
2.4. The Applicant bases his action on the following agreements, respectively rights:
° the agreement between the Applicant and the Defendant regarding the Applicant’s private Facebook Account;
° the seven agreements between the transferors and the Defendant regarding their private Facebook accounts, as well as
° the transfer agreements between the Applicant and the seven transferors.
2.5. According to the findings of the lower courts, the Applicant uses a Facebook account opened in 2008 and 2010 only for private purposes. Nevertheless, the parties have different views on the question of whether the other activities of the Applicant suffice to assume a relevant connection with any professional or commercial activity of the Applicant.
2.6. The Oberste Gerichtshof considers – as did the Court of Appeals – that the opening of an account with Facebook should be considered as an independent agreement. Consequently, the fact that the Applicant undertook, at the earliest after opening his (private) Facebook Account, further work which may be considered as a professional or commercial activity, does not lead to the loss of his status of consumer. Furthermore, it should be noted that these other professional and commercial activities have the very purpose of supporting the exercise of the Applicant’s consumer rights, and thus contribute to the achievement thereof. A need for clarification by the European Court of Justice (ECJ)arises in relation to these general questions of interpretation, relating to the temporal delineation and meaning of activities for the general – professional – support of the exercise of consumer rights, as the basis for the loss of the status of consumer within the meaning of Article 15 of Regulation No. 44/2001. The Oberster Gerichtshof holds in this regard that the conclusion of a new agreement by virtue of amending the conditions of use in 2013, as asserted by the Defendant, does not afect the relevance of the earlier date of the opening of the Facebook account, for purposes of the autonomous assessment of the term “agreement” in Article 15 of Regulation No. 44/2001.
3.1. In the judgments of the ECJ in Shearson / TVBC-89/91, and Verein für Konsumenteninformation/Henkel,C-167/00, the ECJ has already dealt with the question of the assignment of consumer rights. According to these judgments, a person acting professionaly or acting as a trader, to whom a consumer assigns his claim prior to the initiation of the action, cannot enjoy the benefits of proceeding as a consumer (judgment of Shearson/TVBC-89/91, paragraph 24; for class actions: judgment für Konsumenteninformation/Henkel,C-167/00, paragraph 33). These decisions, however, relate to the assignment of rights to legal entities. Of crucial importance was the fact that the special jurisdiction rules to protect consumers were not extended to persons who do not need this protection (Case Shearson / TVBC-89/91, paragraph 19). The present case, in contrast, deals with the assignment of rights to an individual, to the extent the applicant is considered as an individual. As a result, the circumstances in the present case differ fundamentally from those which the ECJ has already ruled upon.
3.2. In this context, it should also be noted that, as far as the Applicant is classified as a consumer, the procedure should at least be conducted in Vienna. The same applies to proceedings concerning any law relating to consumers living in Vienna. In that sense, it is no substantial additional burden for the Defendant, if it must also defend itself with respect to the other, assigned rights, in the context of this procedure.
3.3. Against the background of the case law of the ECJ, the interpretation question to what extent a consumer who has other people assign to him consumer rights with the aim to jointly enforce these rights may invoke the “Forum consumentis“, cannot be answered with the required certainty.
4. Until the judgment on this reference for a preliminary ruling in this case, the adjudication of the appeals of both parties in Revision should be suspended.
Oberste Gerichtshof, Vienna, July 20, 2016