Jurisdiction: Schrems is a Consumer but No Collective Action

January 25, 2018

In Case C-498/16 Maximilian Schrems v Facebook Ireland
the CJEU has ruled that Max Schrems may make use of the rules as to ‘consumer
forum’ to bring an individual action in Austria against Facebook Ireland but,
as the assignee of other consumers’ claims, he cannot benefit from the consumer
forum for the purposes of a collective action.


Mr Maximilian Schrems, who is resident in Austria, brought
legal proceedings against Facebook Ireland (‘Facebook’) before the Austrian
courts. He claims that Facebook has infringed several data-protection
provisions in relation to his private Facebook account and to the accounts of
seven other users who have assigned to him their claims for the purposes of
those proceedings. Those other users are also consumers and live in Austria,
Germany and India. Mr Schrems seeks, inter alia, a declaration from the Austrian
courts that certain contractual terms are invalid and an order requiring
Facebook both to refrain from using the data in question for its own purposes
or the purposes of third parties and to pay damages.

Facebook takes the view that the Austrian courts do not have
international jurisdiction. According to Facebook, Mr Schrems cannot rely on
the rule of EU law that allows consumers to sue a foreign contracting partner
in their own place of domicile (‘consumer forum’). Facebook argues that Mr
Schrems, by using Facebook also for professional purposes (in particular by
means of a Facebook page designed to provide information on the steps which he
is taking against Facebook), cannot be regarded as a consumer. So far as the
assigned claims are concerned, Facebook submits that the consumer forum is not
applicable to those claims since such jurisdiction is not transferable.

It is in that context that the Oberster Gerichtshof (Supreme
Court, Austria) asks the Court of Justice to clarify the conditions under which
the consumer forum may be invoked.


The CJEU rules that the activities of publishing books,
giving lectures, operating websites, fundraising and being assigned the claims
of numerous consumers for the purpose of their enforcement in judicial
proceedings do not entail the loss of a private Facebook account user’s status
as a ‘consumer’. However, the consumer forum cannot be invoked in proceedings
brought by a consumer with a view to asserting, in the courts of the place
where he is domiciled, not only his own claims but also claims assigned by
other consumers domiciled in the same Member State, in other Member States or
in non-member countries.

So far as the status of consumer is concerned, the Court points
out that the consumer forum applies, in principle, only where the contract
between the parties has been concluded for the purpose of a use of the relevant
goods or services that is other than a trade or professional use. As regards
services relating to a digital social network which is intended to be used over
a long period of time, it is necessary to take into account subsequent changes
in the use which is made of those services.

Therefore, a person bringing legal proceedings who uses such
services may rely on his status as a consumer only if the predominately
non-professional use of those services, for which the applicant initially
concluded a contract, has not subsequently become predominately professional.

Nonetheless, given that the notion of a ‘consumer’ is
defined by contrast to that of an ‘economic operator’ and that it is distinct
from the knowledge and information that the person concerned actually
possesses, neither the expertise which that person may acquire in the field
covered by those services, nor his assurances given for the purposes of
representing the rights and interests of the users of those services, can
deprive him of the status of a ‘consumer’. An interpretation of the notion of
‘consumer’ which excluded such activities would have the effect of preventing
an effective defence of the rights that consumers enjoy in relation to
contracting partners who are traders or professionals, including those rights
which relate to the protection of their personal data.

As far as assigned claims are concerned, the Court notes
that the consumer forum was established in order to protect the consumer as a
party to the contract in question. A consumer is therefore protected only in so
far as he is, in his personal capacity, the applicant or defendant in
proceedings. Consequently, an applicant who is not himself a party to the
consumer contract in question cannot enjoy the benefit of the jurisdiction
relating to consumer contracts. The same also applies in regard to a consumer
to whom the claims of other consumers have been assigned

The full judgment is now available in English: http://curia.europa.eu/juris/document/document.jsf?text=&docid=198764&pageIndex=0&doclang=EN&mode=req&dir=&occ=first&part=1&cid=830540.