Fraudulent conduct of the travel organizer and consumer protection

On 16 February 2012 (case C-134/11) the Court of Justice of the European Union (fifth Chamber) ruled with respect to the interpretation of Article 7 of Council Directive 90/314/EEC of 13 June 1990 on package travel, package holidays and package tours.

Article 7 of Directive 90/314/EEC provides that the organizer of the package holiday/travel shall provide security for the refund of money paid over and for the repatriation of the consumer in the event of insolvency.

A German guarantor  denied to refund the money paid by the consumer arguing that it is not required to arrange a refund where the travel has been cancelled solely because of fraudulent conduct on the part of the travel organizer.

The EU Court  has already held (see paragraph 74 of its judgment in case C‑140/97 Rechberger and Others) that Article 7 of Directive 90/314 imposes an obligation of result, that is to say, an obligation to guarantee package travellers the refund of money paid over and their repatriation in the event of the travel organiser’s bankruptcy, and that such a guarantee is specifically aimed at arming consumers against the consequences of the bankruptcy, whatever the causes of it may be.

The Court inferred from this that facts such as imprudent conduct on the part of the travel organizer or the occurrence of exceptional or unforeseeable events cannot constitute an obstacle to the refund of money paid over or to the repatriation of consumers under Article 7 of Directive 90/314.

Therefore Article 7 of Directive 90/314 is to be interpreted as covering a situation in which the insolvency of the travel organiser is attributable to its own fraudulent conduct.

click here for the judgment

More responsible businesses can foster more growth in Europe

My quick overview (in Italian) of the package of measures presented by the European Commission in October 2011 to support entrepreneurship and responsible business.

Click here for the documentation

Unfair contract terms and action on public interest: effects with regard to all consumers

On April 26, 2012 (case C-472/10, Invitel) the Court of Justice of the European Union ruled on whether an unfair contract term is not binding for any consumer, also if they are not party to the proceedings which declared the contract term as unfair.

The EU Court judged that if a consumer organisation files an injunction procedure against a seller/supplier on behalf of damaged consumers, the declaration of unfairness by the national court shall have effects not only for the consumers who were represented in the procedure by the consumer organisation but also to those who concluded a contract with the seller/supplier under the same standard contract terms, also if they were not party to the injunction proceedings. Moreover, the national court should apply, of its own motion, and also with regard to the future, all consequences of unfairness which are provided by national law.

The EU Court judged that:

“Article 6(1) of Directive 93/13, read in conjunction with Article 7(1) and (2) thereof, must be interpreted as meaning that:

• it does not preclude the declaration of invalidity of an unfair term included in the standard terms of consumer contracts in an action for an injunction, provided for in Article 7 of that directive, brought against a seller or supplier in the public interest, and on behalf of consumers, by a body appointed by national legislation from producing, in accordance with that legislation, effects with regard to all consumers who concluded with the seller or supplier concerned a contract to which the same general business conditions apply, including with regard to those consumers who were not party to the injunction proceedings;
• where the unfair nature of a term in the general business conditions has been acknowledged in such proceedings, national courts are required, of their own motion, and also with regard to the future, to draw all the consequences which are provided by national law in order to ensure that consumers who have concluded a contract with the seller or supplier to which those general business conditions apply will not be bound by that term.“

click here for the judgment

The freedom to conduct a business and the EU Charter of Fundamental Rights

On April 16, 2012 the European Commission has published the second annual report on the EU Charter of Fundamental Rights.

In its 2011 report the European Commission underlines that:

“ The freedom to conduct a business (Article 16 of the Charter) is of particular relevance for EU competitiveness and the Commission duly took account of it in the preparation of new legislation on the market for financial instruments, insurance mediation, credit ratings agencies and on recording equipment for road transport (tachographs). Freedom to conduct a business was also a key consideration in the preparation of the Common European Sales Law proposal aimed at removing obstacles resulting from divergences between national contract laws. The Court of Justice recognized the importance of the freedom to conduct a business in its landmark rulings in the Scarlet and Sabam cases. The Court declared that obliging an internet service or hosting provider to install a filtering system in order to prevent an infringement of intellectual property rights would infringe the freedom of the provider to conduct its business, as well as its customers’ rights to the protection of their personal data and to receive or impart information. These rulings underline the importance of taking into account all the fundamental rights involved by a given measure and to ensure its compliance with all these rights.“

click here for the Scarlet case (C-70/10)

click here for the Sabam case (C-360/10)

click here for the EU Charter of Fundamental Rights

An European Foundation Statute

On February 8, 2012 the European Commission presented a proposal for a European Foundation Statute in order  to facilitate the cross-border activities of public benefit purpose foundations and make it easier for them  to support public benefit causes across the EU.

click here for the text of the proposal

The proposal is accompanied by an Impact Assessment.

click here for the Impact Assessment

 

Consultation on the future of European Company Law

Today the European Commission has launched a new public consultation on the European Company Law.

The expiring date to submit contribution is May 14, 2012.

click here for the webpage of the consultation

Online social networking and copyright infringments

On February 16, 2012 the Third Chamber of the Court of Justice of the European Union ruled against the possibility to oblige an hosting service provider (running an online social networking platform) to install a system capable of identifying electronic files containing musical, cinematographic or audio-visual work (case C-360/10, Belgische Vereniging van Auteurs, Componisten en Uitgevers CVBA (SABAM) v Netlog NV).

The Court of Justice ruled in particular as follows:

“ Directives:

–        2000/31/EC of the European Parliament and of the Council of 8 June 2000 on certain legal aspects of information society services, in particular electronic commerce, in the Internal Market (Directive on electronic commerce);

–        2001/29/EC of the European Parliament and of the Council of 22 May 2001 on the harmonisation of certain aspects of copyright and related rights in the information society; and

–        2004/48/EC of the European Parliament and of the Council of 29 April 2004 on the enforcement of intellectual property rights,

read together and construed in the light of the requirements stemming from the protection of the applicable fundamental rights, must be interpreted as precluding a national court from issuing an injunction against a hosting service provider which requires it to install a system for filtering:

–        information which is stored on its servers by its service users;

–        which applies indiscriminately to all of those users;

–        as a preventative measure;

–        exclusively at its expense; and

–        for an unlimited period,

which is capable of identifying electronic files containing musical, cinematographic or audio-visual work in respect of which the applicant for the injunction claims to hold intellectual property rights, with a view to preventing those works from being made available to the public in breach of copyright.”

click here for the judgment

Enhancing e-commerce and online services in the EU Single Market

On 11 January 2012, the European Commission adopted a Communication on  e-commerce and other online services titled ‘A coherent framework for building trust in the Digital Single Market for e-commerce and online services‘.

In this Communication  the Commission sets out its vision for the potential represented by  online services in growth and employment, identifies the principal obstacles to  the development of e-commerce and online services, and establishes 5 priorities.

click here for the provisional text of the Communication

The Communication is accompanied by two staff working papers:

• an analysis of the factors hindering the development of e-commerce and  presents an evaluation of the E-Commerce Directive, titled ‘Online services, including e-commerce, in the Single Market‘
• an analysis of the particular obstacles that have been identified as  particularly relevant for e-commerce in products, titled ‘Bringing e-commerce benefits to consumers‘.

The ‘centre of a debtor’s main interests’ pursuant to Article 3(1) of EC Regulation on insolvency proceedings

On 21 October 2011 the Court of Justice of the European Union (First Chamber) ruled on the interpretation of the term ‘centre of a debtor’s main interests’ (‘COMI‘) provided by Article 3(1) of Council Regulation (EC) No 1346/2000 of 29 May 2000 on insolvency proceedings (case C-396/09).

The EU Court ruled that such term must be interpreted by reference to European Union law.

In particular the EU Court ruled as follows:

“ —  a debtor company’s main centre of interests must be determined by attaching greater importance to the place of the company’s central administration, as may be established by objective factors which are ascertainable by third parties. Where the bodies responsible for the management and super­vision of a company are in the same place as its registered office and the management decisions of the company are taken, in a manner that is ascertainable by third parties, in that place, the presumption in that provision cannot be rebutted. Where a company’s central administration is not in the same place as its registered office, the presence of company assets and the existence of contracts for the financial exploitation of those assets in a Member State other than that in which the registered office is situated cannot be regarded as sufficient factors to rebut the presumption unless a comprehensive assessment of all the relevant factors makes it possible to establish, in a manner that is ascertainable by third parties, that the company’s actual centre of management and supervision and of the management of its interests is located in that other Member State;

—  where a debtor company’s registered office is transferred before a request to open insolvency proceedings is lodged, the company’s centre of main activities is presumed to be the place of its new registered office. “

click here for the judgment

 click here for the opinion (in French) of Advocate General Kokott

Consumer Programme 2014-2020

On 9 November 2011 the European Commission adopted the proposal for a 2014-2020 Consumer Programme.

The objective of the proposal is to place consumers at the centre of the Single Market and empower them to participate actively in the market and make it work for them, particularly by:

• Enhancing product safety through effective market surveillance;
• Improving consumers’ information, education and awareness of their rights;
• Consolidating consumer rights and strengthening effective redress, especially through alternative dispute resolution;
• Strengthening enforcement of rights cross-border.

click here for the proposal

The proposal will now be discussed by the European Parliament and Council of Ministers, with a view to adoption by the end of 2013, to allow for the start of the new health and consumer programmes in 2014.

The proposal is accompanied by an Impact Assessment document.