What proportion of an online membership should be due when cancelled? CJEU rules on Consumer Rights Directive

October 14, 2020

The Court of Justice of the European Union has ruled in Case C-641/19 EU v PE Digital GmbH on Article 2, Article 14(3) and Article 16(m) of the Consumer Rights Directive 2011/83/EU. The ruling was made in proceedings between EU, as a consumer, and PE Digital GmbH, which operates a dating agency. The dispute concerned the amount owed to PE Digital by the consumer following her exercising her right to withdraw from a contract concluded with PE Digital. 

The Consumer Rights Directive allows consumers to cancel a contract during a 14 day withdrawal period, and as long as the trader has fulfilled certain conditions, the trader can require “an amount which is in proportion to what has been provided until the time the consumer has informed the trader of the exercise of the right of withdrawal, in comparison with the full coverage of the contract”.

PE Digital is a German company and offers a free basic and a paid premium membership. EU entered into a contract with PE Digital for a 12-month ‘premium’ membership for EUR 523.95. PE Digital informed EU of her right of withdrawal and EU confirmed to PE Digital that she wanted to receive the service before the withdrawal period expired. EU then withdrew from the contract during the cancellation period. After EU had withdrawn from the contract, PE Digital charged her a total amount of EUR 392.96 by way of compensation for the service used, including the generation of a personality report. EU brought proceedings seeking the repayment of all the payments made to PE Digital.

The case was referred to the CJEU.

The court ruling

Questions 1 and 2 – proportional reimbursement

The court said that in principle, courts should take account of the price agreed in the contract for the full coverage of the contract and to calculate the amount owed over its full term. As an example, if the contract term was a year but the consumer had only used a week’s services, they could expect a refund of most of the contract price. However, where the contract terms expressly set out that one or more of the services are to be provided in full from the beginning of the performance of the contract and separately, for a price which must be paid separately, that the full price for such a service should be taken into account in the calculation of the amount owed to the trader under Article 14(3). This did not apply to the contract here, because it did not set out that a separate prices was to be paid for the personality report which was sent to a consumer once they had entered into the contract.

How to assess if the total price is excessive

Article 14(3) and recital 50 mean that when assessing if the total price is excessive, courts should consider the price of the service offered by the trader concerned to other consumers under the same conditions and that of the equivalent service supplied by other traders at the time that the contract was entered into.

A personality report is not “digital content” under the Directive

Article 16(m) and Article 2(11) mean that generating a personality report by a dating website on the basis of a personality test carried out by that website does not constitute the supply of ‘digital content’ under the Directive. The court did not explain its reasoning on this issue in any detail. However, the ruling is consistent with the European Commission’s guidance on the Directive, which sets out examples of calculations under Article 14(3).