January 29, 2018

Mr Schrems, an Austrian resident, issued proceedings against Facebook Ireland in the Austrian Courts, alleging that Facebook Ireland had violated his privacy and data protection rights and those of seven other Facebook users who had assigned their claims to him in response to his online invitation. Those users were domiciled in Austria, Germany and India.

Facebook Ireland challenged the jurisdiction of the Austrian Courts. It alleged that Mr Schrems could not be a “consumer” for the purposes of the proceedings due to his professional activities (in particular, due to his use of a Facebook page designed to provide information on the steps which he was taking against Facebook). His use of Facebook was professional, it said, meaning that Mr Schrems could not use the jurisdictional consumer privilege under the Brussels Regulation to sue a foreign entity in his own place of domicile. In addition, Facebook Ireland alleged that the same privilege was strictly personal and could not be used for assigned claims. Facebook submitted that the consumer forum was not applicable to the assigned claims since jurisdiction was not transferable.

The Supreme Court in Austria asks the CJEU to clarify the conditions under which the consumer forum can be invoked.

The CJEU found 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 did not entail the loss of a private Facebook account user’s status as a “consumer”.

However, it said the consumer forum could not be invoked in proceedings brought by a consumer with a view to asserting, in the courts of the place where he was 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.

As far as the status of consumer was concerned, the CJEU pointed out that the consumer forum applied, in principle, only where the contract between the parties had been concluded for the purpose of using the relevant goods or services other than for trade or professional use. As for services relating to a digital social network that was intended to be used over a long period of time, it was necessary to take into account subsequent changes in the use made of those services.

Therefore, the CJEU said, a person bringing legal proceedings using social media services could rely on his status as a consumer only if the predominately non-professional use of those services, for which he/she had initially concluded a contract, had not subsequently become predominately professional.

Nonetheless, given that the concept of “consumer” was defined by contrast to that of an “economic operator”, and that it was distinct from the knowledge and information that the person concerned actually possessed, neither the expertise, which that person might acquire in the area covered by those services, nor his assurances given for the purposes of representing the rights and interests of the users of those services, could deprive him of the status of “consumer”. An interpretation of the concept of “consumer” that 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 that relate to the protection of their personal data.

As far as the assigned claims were concerned, the CJEU noted that the consumer forum was established in order to protect the consumer as a party to the contract in question. A consumer was therefore protected only insofar as he was, in his personal capacity, the applicant or defendant in proceedings. Consequently, an applicant who was not himself a party to the consumer contract in question could not enjoy the benefit of the jurisdiction relating to consumer contracts. The same also applied in relation to a consumer to whom the claims of other consumers had been assigned. (Case C-498/16 Maximilian Schrems v Facebook Ireland Ltd (25 January 2018) — to access the judgment in full, go to the curia search form, type in the case number and follow the link).