Verein für Konsumenteninformation – CJEU Judgment (Austria, 2016)

Amazon EU is a company established in Luxembourg which, among other activities, via a website with a domain name with the extension .de, addresses consumers residing in Austria, with whom it concludes electronic sales contracts. The company has no registered office or establishment in Austria. The VKI, which is an entity qualified to bring actions for injunctions within the meaning of Directive 2009/22, brought an action before the Austrian courts for an injunction to prohibit the use of the terms in Amazon EU's general terms and conditions especially relating to the applicable law for its contracts. The VKI considered them contrary to legal prohibitions or accepted principles of morality. The court at first instance presumed that in principle the Rome I Regulation applies and, on the basis of Article 6(2) of that regulation, held that the clause on the choice of applicable law was invalid, on the ground that the choice of law should not have the result of depriving consumers of the protection afforded to them by the law of their State of habitual residence. The court concluded that the validity of the other terms had to be assessed in the light of Austrian law. The appellate court, to which both parties to the main proceedings appealed, set aside the judgment of the first-instance court and referred the case back to it for rehearing. It considered that the Rome I Regulation was relevant for the determination of the applicable law. It held that Article 6(2) of the regulation did not allow the conclusion that Amazon EU's choice of applicable law was invalid, and that in accordance with Article 10(1) of the regulation that term should instead have been assessed in the light of Luxembourg law. = The Oberster Gerichtshof (Supreme Court, Austria), to which the VKI appealed, is uncertain as to the law applicable in the main proceedings. In those circumstances it decided to stay the proceedings and to refer the following questions to the Court for a preliminary ruling: With questions 1-3 the referring court essentially asked how the Rome I and Rome II Regulations should be interpreted for the purpose of determining the applicable law to an action for an injunction within the meaning of Directive 2009/22 brought against the use of allegedly unlawful contractual terms by an undertaking established in one Member State which concludes contracts by way of electronic commerce with consumers resident in other Member States. With question 4a the referring court essentially asked whether a term in the general terms and conditions of a consumer and e-commerce contract declaring that a contract is to be governed by the law of the Member State in which the seller or supplier is established, is unfair within the meaning of Article 3(1) of Directive 93/13. With question 4b the referring court essentially asks whether Article 4(1)(a) of Directive 95/46 must be interpreted as meaning that the treatment of personal data by an undertaking engaged in electronic commerce is governed by the law of the Member State to which that undertaking directs its activities. = The court found a distinction must be drawn, for the purposes of determining the applicable law, between the assessment of the terms concerned, on the one hand, and, on the other hand, the action for an injunction to prohibit the use of those terms brought by an association such as the VKI to ensure uniform application of the Rome Regulations. Thus the court held, that the Rome I and Rome II Regulations must be interpreted as meaning that the law applicable to an action for an injunction within the meaning of Directive 2009/22 must be determined in accordance with Article 6(1) of the Rome II Regulation (where the market is affected), whereas the law applicable to the assessment of a particular contractual term must always be determined pursuant to the Rome I Regulation, whether that assessment is made in an individual action or in a collective action. = The court held, that a general term or condition of a seller which has not been individually negotiated, under which the contract concluded with a consumer in the course of electronic commerce is to be governed by the law of the Member State in which the seller is established, is unfair in so far as it leads the consumer into error by giving him the impression that only the law of that Member State applies to the contract, without informing him that under Article 6(2) of the Rome I Regulation he also enjoys the protection of the mandatory provisions of the law that would be applicable in the absence of that term. = The court stated, that the processing of data by an establishment is governed by the law of the Member State in whose territory that establishment is situated, an establishment being any real and effective activity exercised through stable arrangements. The court held, that while the fact that the undertaking responsible for the data processing does not have a branch or subsidiary in a Member State does not preclude it from having an establishment there within the meaning of Article 4(1)(a) of Directive 95/46, such an establishment cannot exist merely because the undertaking’s website is accessible there. Rather, the court upheld its judgement in Weltimmo, C‑230/14, both the degree of stability of the arrangements and the effective exercise of activities in the Member State in question must be assessed. The court left it to the national court to determine, whether Amazon EU carries out the data processing in question in the context of the activities of an establishment situated in a Member State other than Luxembourg. Thus the court held, that Article 4(1)(a) of Directive 95/46 must be interpreted as meaning that the processing of personal data carried out by an undertaking engaged in electronic commerce is governed by the law of the Member State to which that undertaking directs its activities, if it is shown that the undertaking carries out that processing in the context of the activities of an establishment situated in that Member State.