Web Sites and Jurisdiction: Pammer/Alpenhof

March 15, 2011

The EU rules on jurisdiction set out in Regulation 44/2001 provide for special rules protecting the consumer as the ‘weaker party’ in a business to consumer transaction. These rules are asymmetrical in the sense that, if they apply, the business can sue the consumer only in the consumer’s domicile whereas the consumer has the choice of pursuing a claim (or counterclaim) against a business in either his or her court of domicile or the place of establishment of the business, according to Article 16(1) and (2).

These rules apply inter alia where the business by any means directs its activities to the Member State of the consumer’s domicile (Article 15(1)(c)). Thus, in deciding whether an e-commerce business must sue a consumer domiciled in another EU Member State in the consumer’s local courts or whether a consumer can sue a business in the consumer’s local courts, the meaning of the word ‘directs’ is crucial.

An almost identical test is contained in Article 6 of the Rome Regulation 593/2008 for determining which law is applicable to a contract in a business to consumer contract. Hence the ruling of the ECJ is of relevance also for applicable law.

The meaning of the directing test has long been unclear and hotly disputed among lawyers (of both the practitioner and scholarly type).[1]  One interpretation was that an e-commerce business directs its activities to a particular Member State on the mere basis that all consumers domiciled there can enter into transactions, in accordance with the (now discredited) Zippo test established in US jurisprudence.[2] Another reading was that the test is more akin to a ‘targeting’ test, looking at a variety of factors. It seems that the ECJ has now adopted this second approach.

Both joined cases concerned German-Austrian conflicts of law. In the first case, Mr Pammer, domiciled in Austria, booked a voyage by freighter from Trieste (Italy) to the Far East organised by the defendant freight company. He booked the voyage through a German intermediary’s web site. Because of allegedly false representations on the web site describing the facilities on board, the claimant consumer did not embark on the voyage and claimed repayment of the money paid, bringing his claim in an Austrian court. The question was whether the Austrian consumer’s local courts had jurisdiction against the German defendant company.

Similarly in Alpenhof, a German domiciled consumer booked a room in the Alpenhof Hotel in Austria through Alpenhof’s web site but left without paying his hotel bill because of alleged misrepresentation. The Alpenhof hotel sued the German consumer in its local Austrian court and the question arose whether the Austrian court had jurisdiction over the German consumer.

The ECJ stated that it was not clear whether the words ‘directs such activities to’ in Article 15(1)(c) of Regulation 44/2001 require that the e-commerce business intentionally turns its activities to a particular Member State or whether it is a de facto test, only considering whether an activity is turned towards a particular Member State regardless of the intention of the e-commerce business (see the judgment at [63]). The Court emphasised (at [71]-[72]) that the mere use of a web site is insufficient to satisfy the ‘directing’ test. The Court found (at [75]) that the business must have objectively manifested its intention to establish commercial relationships with customers from the consumer’s domicile. It held (at [76]) that it was necessary to consider all evidence, which showed that the business was envisaging doing business with consumers domiciled in the forum.

The Court held (at [77]) that contact details such as an e-mail address, dialling code and geographical address were not sufficient to satisfy this test. The Court rejected the distinction between active and passive web sites as the delineation line between jurisdiction in the consumer’s Member State or not. In other words, the mere fact that transactions can be concluded through an active web site was not sufficient for a finding that the web site was directed towards the consumer’s Member State. Thus the ECJ has rejected the application of a test which is similar to Zippo for the EU.

The Court lists (at [81]-[84]), by way of example, the factors which may be taken into account when deciding whether an e-commerce business directs its activities to a particular Member State: (i) an explicit statement that the business is offering goods or services in a particular Member State; (ii) the purchase of keywords from a search engine for searches from a particular Member State; (iii) the international nature of the activity of the business, such as certain tourist activities; (iv) including international dialling codes with telephone numbers; (v) the choice of top-level domain; (vi) the description of itineraries from one or more Member States; and (vii) testimonies by customers from a particular Member State (or mentioning the international nature of its customers) and (viii) the language and currency used, if they differ from the language or currency used by the business.

The last item (viii) is interesting as the Joint Statement of the Commission and Council to Regulation 44/2001 and Recital 24 to the Rome Regulation 593/2008 (on applicable law) state that language and currency are not relevant factors. The Court clearly and firmly has adopted a multi-factor targeting test, rather than a test based on the interactive, transactional nature of a web site.

The judgment in the case can be read in full here.


Dr Julia Hörnle is Senior Lecturer in Internet Law at the School of Law, Queen Mary University of London and Programme Director for the LLM/Diploma in Computer & Communications Law by Distance Learning.



[1] See for example Lorna Gillies, “A Review of the New Jurisdiction Rules for Electronic Consumer Contracts Within the EU” JILT [2001] available at http://elj.warwick.ac.uk/jilt/01-1/gillies.html  or Julia Hörnle Chapter 3 ‘The Jurisdictional Challenge of the Internet‘ in L.Edwards/C. Waelde Law and the Internet (3rd edition Hart 2009) and Margaret Jordan, “Suffocating E-commerce at Birth” European Counsel 15-17 [December 1999/January 2000]

[2] Zippo Mfg Co v Zippo Dot Com Inc 952 F Supp 1119 (WDPa 1997)