On 25 January 2018, the Court of Justice of the European Union ("ECJ") issued its judgment in Case C-498/16 Maximilian Schrems v. Facebook Ireland Limited. The ECJ follows the opinion of Advocate General Bobek (the "AG") to clarify the extent of the consumer jurisdictional privilege (see VBB on Belgian Business Law, Volume 2017, No. 11, p 3, available at www.vbb.com).
Maximilian Schrems is a well-known Austrian activist in the field of technology and electronic privacy. Previously, Mr. Schrems had successfully challenged the transfer of data from the EU to the US through the Safe Harbour regime (see VBB on Belgian Business Law, Volume 2015, No. 9, p. 10 and No. 10, p. 8, available at www.vbb.com).
In the present case, Mr Schrems sued Facebook Ireland, the European subsidiary of Facebook Inc, for alleged violations of his privacy and data protection rights, as well as those of seven other Facebook users. Mr Schrems initiated proceedings in the Austrian courts, relying on the consumer jurisdictional privilege provided for in Article 16(1) of the now repealed Council Regulation (EC) No 44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (the "Brussels I Regulation"). This provision allows consumers (i.e., non-commercial parties) to sue the other party to a contract in the courts of the EU Member State in which the consumer is domiciled. Article 18(1) of the currently applicable Regulation (EU) No 1215/2012 of 12 December 2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (the "Brussels Ibis Regulation") contains similar terms. Article 15(1) of the Brussels I Regulation (reproduced in Article 17(1) of the Brussels Ibis Regulation) limits this jurisdictional privilege to "matters relating to a contract concluded by a person, the consumer, for a purpose which can be regarded as being outside his trade or profession".
Facebook contested the jurisdiction of the Austrian court, which therefore asked for clarification from the ECJ in the form of a preliminary reference. Facebook argued that (i) Mr Schrems was not a consumer, given the public nature of his activities on the site; and (ii) any consumer jurisdictional privilege that Mr Schrems enjoys cannot extend to the claims assigned to him by other Facebook users.
Mr Schrems maintained two presences on Facebook. The first, an "account" was for personal use. The second, a "page", was public and used for promoting his books, lectures, media appearances and fundraising activities. Mr Schrems set up his public "page" in 2011, three years after first opening his personal "account".
The ECJ held that, for the purposes of the Brussels regime, the notion of a consumer must be strictly construed. As a general rule, the status of consumer arises from the nature and aim of the contract at the time it was concluded. Once acquired, therefore, consumer status will normally persist. A subsequent change in use may, exceptionally, transform the user's status. According to the ECJ, the fact of publishing books, giving lectures, operating websites, engaging in fundraising and possessing particular knowledge or expertise in the field covered by the digital services (i.e., online social networks such as Facebook) is not sufficient to deprive claimants of their consumer status. The ECJ added that neither the fact of having been assigned another's claim, nor the assurances given in order to persuade such an assignment removes the jurisdictional privilege from the original personal claim.
By contrast, the ECJ added that the assigned claims do not enjoy the same consumer jurisdictional privilege. The ECJ was clear that a consumer is protected "only in so far as he is, in his personal capacity, the plaintiff or defendant in proceedings". That privilege cannot, therefore, extend to an applicant who is not a party to the contract at issue, or who was assigned the claims of other applicants (each of whom has concluded a separate contract with the service provider). Thus, a vehicle for collective redress which specifically aims to gather litigants and assign their claims to one claimant is incompatible with the consumer jurisdictional privilege. On this point, the ECJ expressly agreed with the AG's concerns that assigned claims could be used to circumvent otherwise predictable rules of jurisdiction.
Thus, the ECJ held that Mr Schrems should maintain his consumer jurisdictional privilege in respect of his personal claims, but not in respect of those claims which had been assigned to him by other parties.
The outcome of the decision may have been different under Regulation (EU) 2016/6791, the General Data Protection Regulation ("GDPR"). This is because Article 80 of the GDPR explicitly recognises the right of a "not-for-profit body, organisation or association" to lodge a complaint and claim compensation on behalf of the data subject "where provided for by Member State law". The GDPR will apply as from 25 May 2018.
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