Verein für Konsumenteninformation v Amazon EU Sàrl

28 July 2016

Ruth Boardman, James Mullock

Background

This case concerns an action brought by the Austrian Consumer Information Association, Verein für Konsumenteninformation (VKI), against Amazon EU Sàrl (Amazon), a company established in Luxembourg but which, among other things, offers goods and services to consumers resident in Austria through a website with the domain name extension '.de'. VKI brought an action against Amazon for an injunction to prohibit the use of all terms contained in Amazon's general terms and conditions with such Austrian consumers on the basis that it thought those terms were unfair. One such term stated that the applicable law was that of Luxembourg.

Judgment

The Austrian Supreme Court referred three questions to the CJEU. One concerned the applicable law for data protection purposes, and the others were on how the Rome I and II Regulations should be interpreted to determine the applicable law relating to contractual and non-contractual matters. The data protection question was whether a company, established in one country (Luxembourg), but directing its activities to another country (Austria) must comply exclusively with the data protection law of the Member State in which it is established or must also comply with the data protection rules of the Member State to which its commercial activities are directed.

The CJEU decision referenced Weltimmo (C‑230/14, EU:C:2015:639), noting that the definition of 'establishment' extends to "any real and effective activity, even a minimal one, exercised through stable arrangement". The Court approvingly referenced the Advocate General’s (AG) Opinion, that the lack of a branch or subsidiary in a Member State does not preclude establishment in that Member State. However, the Court concluded that mere accessibility of the undertaking's website from a Member State would not be sufficient as to amount to establishment. In this case, Amazon had no activities in Austria, and mere accessibility of its services in Austria did not make it established in Austria for data protection purposes.

As regards the definition of 'in the context of', the CJEU referenced its previous observation in Weltimmo that, "[Article 4(1)(a)] requires the processing of personal data in question to be carried out not 'by' the establishment concerned itself but only 'in the context of the activities' of the establishment". The CJEU noted that the answer to this question was to be determined by national courts. It did not provide an answer itself, although it did, in passing, note that if there was an Amazon German establishment, that the national referring court could conclude that German was the applicable law rather than that of Luxembourg.

In relation to the remaining questions, the CJEU emphasised the need to distinguish between:

  1. The law applicable to the action for the injunction, on the basis that earlier case law established that injunctions for unfair contract terms concerned were to be considered non-contractual, this must be determined in accordance with Article 6 (1) Rome II Regulation; and
  2. The law applicable to the assessment of the particular contractual term, which must be determined in accordance with the Rome I Regulation.

The judgment is available here.