HomeInsightsFirma EDV v Germany – do companies have feelings too?

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This article was written by Eileen Weinert, Solicitor, Wiggn LLP and first published in the Entertainment Law Review on 6 February 2015.

Firma EDV fur Sie, EfS Elektronische Datenverarbeitung DienstleistungsGmbH v Germany (32783/08)1

*Ent. L.R. 50  Does a legal entity have a right to respect for its private life under art.8 of the European Convention on Human Rights and Fundamental Freedoms? Does a legal entity have a right to respect for its reputation under ECHR art.8? These are crucial questions which the court in the case of Firma EDV v Germany could have answered on the facts. They did not, neatly side-stepping the issues, nevertheless, the judgment contains an interesting summary of how far the ECtHR has got to on these issues.

Background

The applicant company, Firma EDV, distributed software and provided customer services for a database widely used by German medical practitioners.

On May 16, 1997, the Medical Tribune, a journal for medical professionals, published an article warning of a technical security leak and exposing Firma as a “Christusbetrieb” (“Company of Christ”) closely tied to a religious community called “Universelles Leben” (“Universal Life”). It claimed that, although Universelles Leben did not control Firma EDV formally, it did so by informal means, as all employees as well as the management were, by their religious beliefs, affiliated to Universelles Leben. The article also cited negative statements concerning Universelles Leben made by the Bavarian Protestant-Lutheran Church.

On May 18, 1997, the representative of the Bavarian Protestant-Lutheran Church issued a press release entitled “Security Leak in Software for Medical Practices—Patient Data Accessible to Psycho-Sect Universelles Leben”. He warned of the “at least conceivable danger” that Firma EDV might abuse its access to patient data and use it for the purposes of the religious community Universelles Leben. He also referred to the unusual views of Universelles Leben concerning the treatment of illnesses through the application of “cosmic rays” over medicine.

On May 20, 1997, the representative of the Bavarian Protestant-Lutheran Church gave an interview to an independent Bavarian radio station, in which he said that there was a risk to data security, but explicitly stating that neither he nor the Medical Tribune had alleged that Firma EDV had abused its access to patient data in the past. Nonetheless, he considered that Firma EDV was a Company of Christ, tied to Universelles Leben and a “dubious organisation” in view of its unusual views on the treatment of illnesses and called on practitioners to reconsider giving it access to patient data. A representative of Firma EDV was also heard, via an audio recording, in which he rejected the allegations and called the representative of the Protestant Church a “public liar”.

The issue was taken up in the regional and national press, which repeated the fear expressed in the press release as regards the possibility of a security leak.

On May 29, 1997, the company that had licensed Firma EDV to distribute the software and provide customer service terminated its contract, citing the critical press.

Having lost its main source of income, Firma EDV ceased to do business on December 31, 1997.

Domestic proceedings

Firma EDV issued proceedings in the domestic courts. On May 9, 2001, the Munich Regional Court rejected Firma EDV’s claim for damages and a cease-and-desist order. It held that neither Firma EDV’s “personality rights” nor its rights concerning its business (Recht am eingerichteten und ausgeübten Gewerbebetrieb) had been violated by the Bavarian Protestant-Lutheran Church’s representative. The judgment was subsequently upheld by the Munich Court of Appeal on February 8, 2002 and on December 18, 2007, Firma EDV’s constitutional complaint was rejected by the Federal Constitutional Court.

Firma EDV took the case to the ECtHR invoking ECHR arts 8 and 9 and art.1 of Protocol No.1, complaining that by exposing the religious affiliation of its employees and management and questioning their *Ent. L.R. 51  reliability on those grounds, the Bavarian Protestant-Lutheran Church had tarnished its reputation and ruined its economic foundation.

Decision

Violation of art.8

ECHR art.8 reads as follows:

1. “Everyone shall have the right to respect for his private and family life, his home and his correspondence.

2. There shall be no interference by a public authority with the exercise of this right except such as is in accordance with the law and is necessary in a democratic society in the interests of national security, public safety or the economic well-being of the country, for the prevention of disorder or crime, for the protection of health or morals, or for the protection of the rights and freedom of others.”

The main question for the ECtHR was whether art.8, under its “private life” limb, was applicable to a legal person, such as Firma EDV, complaining of a violation of its right to reputation.

The ECtHR recited previous decisions, in which it had held that the private life aspect of art.8 encompassed a natural person’s reputation2; that a legal person’s business premises were included within the broad definition of home in art.8 3 and that business correspondence was included in the definition of correspondence in art.8.4 Further, that the protection of a company’s reputation may be the legitimate aim of a restriction under art.10(2) of the Convention.5

The ECtHR decided that, given these previous decisions, and the fact that the real issue was whether a fair balance had been struck by the German courts between the conflicting rights of Firma EDV and freedom of expression, it could leave open the question of whether the reputation of a company fell within the ambit of art.8. Taking into account the earlier authorities, it therefore proceeded on the assumption that art.8 did indeed apply.

The essential criteria for balancing arts 8 and 10 were whether there was a contribution to a debate of general interest, how well known the person concerned was, the prior conduct of the person concerned and the content, form and consequences of the publication.6 Another element of particular importance was the distinction between statements of fact and value judgments. While the existence of facts can be demonstrated, the truth of value judgments is not susceptible to proof. However, even where a statement amounts to a value judgment, the proportionality of an interference may depend on whether there exists a sufficient factual basis to support it.7

Examining whether a fair balance had been struck by the domestic courts, the ECtHR found that the statements made by the representative of the Bavarian Protestant-Lutheran Church had contributed to a debate of public interest, namely on data security in the sensitive area of medical data protection. Further, the debate had been initiated by a prior publication in the Medical Tribune publication. In addition, the statements, insofar as they referred to the access Universelles Leben had to patient data, relied on facts which were established by the domestic courts to be true. As to the statements concerning the danger of abuse by Universelles Leben of their access to patient data, a value judgment, that statement had a factual basis—Universelles Leben’s access to patient data. Moreover, the representative of the Bavarian Protestant-Lutheran Church had made it clear that he did not allege that Universelles Leben had actually abused its data access.

As for the description of Firma EDV as a “dubious organisation”, the ECtHR found that this negative value judgment had a sufficient factual basis, in that it referred to a company under the de facto control of another religious community whose unusual views on medical treatment had not been contested in the proceedings, and was not abusive.

In addition, the ECtHR said, the domestic courts had taken into account the fact that the statements of the Bavarian Protestant-Lutheran Church representative had had negative consequences on the business of Firma EDV, which had had to discontinue its business. However, they noted that this had been essentially the consequence of a public debate that had already been initiated a by third party, i.e. the Medical Tribune.

The ECtHR held that the German courts had considered all the above factors and had balanced them in a reasonable manner. They could not, therefore, be held to have overstepped their margin of appreciation as regards art.8. Accordingly, the ECtHR found that there was no violation of art.8 and that Firma EDV’s case should be rejected as “manifestly ill-founded”.

Violation of art.9

Additionally, Firma EDV complained that publication of the religious affiliation of its employees violated its rights under art.9 of the Convention (Right to freedom of thought, conscience and religion). The ECtHR said that Firma EDV was a legal person founded exclusively for business purposes. It did not pursue any religious activities; on the contrary, it sought to distance itself *Ent. L.R. 52  from the religious belief of its managers and employees. It could neither exercise the rights of its employees guaranteed by art.9 on their behalf, nor rely on a right of its own stemming from art.9.

Violation of art.1 of Protocol No.1

Finally, Firma EDV complained that publication of the statements at issue had ruined its business and therefore infringed its property rights. The ECtHR said the question as to whether a company’s reputation and goodwill constitute “possessions” within the meaning of art.1 of Protocol No.1 could be left open, since the balancing exercise required would not raise any separate issues from those under art.8.

Comment

Firma EDV’s application to the ECtHR required two stretches of the imagination: the first, that a corporation has a right to privacy under the ECHR and the second, that the right to privacy encompasses a right to reputation. It is unsurprising that it failed.

As for the first, while the court recited cases in which aspects of the rights in art.8 have been afforded to legal entities (namely the right to respect for one’s home and correspondence); it has yet to rule that legal entities have a right to “privacy”.

As Lord Mustill said in R. v Broadcasting Standards Commission Ex p. BBC,8 commenting on the difference between confidentiality and privacy and the right of legal entities to recover damages for their infringement:

“Privacy and confidentiality are not the same. For example, the reading and copying of personal diaries, letters to relatives or lovers, poems and so on could ground not only an allegation of tortious conduct but also an additional complaint that the privacy of the writer and perhaps also the recipient have been intruded upon. No such complaint, would, I believe, be feasible when made by a company, not for the obvious reason that a corporation does not create documents of this kind but because an intrusion into such matters has an extra dimension, in the shape of the damage done to the sensibilities of a human being by exposing to strangers the working of his or her inward feelings, emotions, fears and beliefs, a damage which an artificial ‘person’, having no sensibilities cannot be made to suffer. A company can have secrets, can have things which should be kept confidential, but I see this different from the essential human and personal concept of privacy.”

The ECtHR may have recognised that companies can expect a right to respect for their correspondence (in the sense that the correspondence is confidential) and that a person’s home or “domicile” in the French version can encompass an office, it ought not to make a further leap and rule that artificial “persons” have that essentially human and personal concept of privacy. The ECtHR did not do that here but rather neatly side-step the issue. Given that the facts suited a determination it would have been a useful thing for the court to address the issue and confirm that legal entities do not have rights under the privacy limb of art.8. As it stands, the question is left open and the fight is left for someone else on another day.

The second limb of the application which remains controversial is the suggestion that the art.8 right to respect for private and family life, home and correspondence encompasses a right to reputation. Controversial because a right to reputation was contemplated by the drafters of the ECHR and omitted from the final draft. Nevertheless, respect for the right to reputation appears to have crept in to art.8 through the back door and if that state of affairs is accepted, it is no great stretch to afford the protection to companies who are, after all, entitled to protect their goodwill.

Ent. L.R. 2015, 26(2), 50-52

1. Firma EDV für Sie, EfS Elektronische Datenverarbeitung Dienstleistungs GmbH v Germany (32783/08) (September 2, 2014).
2. Axel Springer AG v Germany (39954/08) [2012] E.M.L.R. 15; (2012) 55 E.H.R.R. 6.
3. Buck v Germany (41604/08) (2006) 42 E.H.R.R. 21
4. Wieser and Bicos Beteiligungen GmbH v Austria (74336/01) (2008) 46 E.H.R.R. 54.
5. Heinisch v Germany (28274/08) [[2011] I.R.L.R. 922; (2014) 58 E.H.R.R. 31 and Steel v United Kingdom (68416/01) [2005] E.M.L.R. 15; (2005) 41 E.H.R.R. 22.
6. Von Hannover v Germany [2012] E.M.L.R. 16; (2012) 55 E.H.R.R. 15.
7. Ferihumer v Austria (30547/03) (2008) 47 E.H.R.R. 42.
8. R. v Broadcasting Standards Commission Ex p. BBC [2001] Q.B. 885 CA.

 

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