Case summary

Deciding Body
Austrian Supreme Court
Oberster Gerichtshof
Austria
National case details
Date of decision: 14.12.17
Registration ID: 2 Ob 155/16g
Instance: Cassation (review)
Case status: Final
Area of law
Consumer protection
Data protection
Unfair terms
Unfair practices (BtoC)
Consumer credit
Violation of information duties
Mass media
Other
Safeguards for access to justice
Right to access a court, Right to an effective remedy before a tribunal, Right to a fair trial, Right to a fair hearing by an independent and impartial...
Relevant principles applied
Equivalence, Effectiveness
Preliminary ruling
Judgement of the CJEU (Third Chamber), 28 July 2016, Case C-191/15 Verein für Konsumenteninformation v Amazon EU Sàrl

Life-cycle diagram

  1. 11 April 2014

    Court of first instance decision

  2. 29 July 2014

    Annulment of the decision by the Appellate Court

  3. 9 April 2015

    Referral to the CJEU by the Austrian Supreme Court

  4. 28 July 2016

    CJEU Preliminary Ruling, C-191/15, VKI/Amazon EU Sàrl

  5. 14 December 2017

    National Follow-up Judgment

Identification of the case

Fundamental rights involved
  • Protection of personal data (art. 8 CFREU)
  • Freedom to conduct a business (art. 16 CFREU)
  • Right to property (art. 17 CFREU)
  • Equality before the law (art. 20 CFREU)
  • Consumer protection (art. 38 CFREU)
  • Right to an effective remedy and to a fair trial (art. 47 CFREU)
National law sources
  • § 3 (1), § 8 (1) Datenschutzgesetz (Austrian data protection act)
  • § 5e (1), § 5f (1), § 6 (1), (2) and (3), § 10 (3), § 28, § 29, § 30 Konsumentenschutzgesetz (Austrian consumer protection act)
  • § 471, § 879 (3), § 1000, § 1333 (1) Allgemeines Bürgerliches Gesetzbuch (Austrian General Civil Law Act)
  • § 13, § 18 (1) Fern- und Auswärtsgeschäfte-Gesetz (Austrian Act on distance and outside business premises sales
  • § 3, § 27 (6) Zahlungsdienstegesetz (Austrian Payment Services Act)
  • § 18a, § 24 (1), § 60 (1) Urheberrechtsgesetz (Austrian Copyright Act)
  • § 25 (3) Bundesgesetz gegen den unlauteren Wettbewerb (Austrian Act against unfair competition)
  • § 41, § 50 Zivilprozessordnung (Austrian civil procedural act)
EU law sources
  • Art 3 (5), Art 6 (1) and (2), Art 10 (1) and (2) Regulation (EC) 593/2008 (Rome I)
  • Art 6 (2) Regulation (EC) 864/2007 (Rome II)
  • Directive 2009/22/EC
  • Art 3 (1) Directive 93/13/EEC
  • Art 4 (1) (a) Directive 95/46/EC
  • Art 6 (1) Directive 97/7/EC
  • Art 52 Directive 2007/64/EC

Summary of the case

Facts of the case

The defendant is Amazon EU. It is a company established in Luxembourg belonging to an international mail order group which, among other activities, via a website with a domain name with the extension .de, addresses consumers residing in Austria, with whom it concludes electronic sales contracts. The company has no registered office or establishment in Austria.

The plaintiff is the “Verein für Konsumenteninformation” (VKI). It is an entity qualified to bring actions for injunctions within the meaning of the Directive 2009/22.

VKI brought an action before the Austrian courts for an injunction to prohibit the use of a number of terms in Amazon’s general terms and conditions and for publication of the judgment to be delivered, as it considered that those terms were all contrary to legal prohibitions or accepted principles of morality.

The court at first instance allowed most the claims in the action. It presumed that in principle the Rome I Regulation applies and, on the basis of Article 6(2) of that regulation, held that Amazon’s clause on the choice of applicable law was invalid. The court concluded therefrom that the validity of the terms had to be assessed in the light of Austrian law. Finally, the court observed that only the data protection issues had to be assessed in the light of the relevant Luxembourg law.

The appellate court, to which both parties appealed, set aside the judgment of the first-instance court and referred the case back to it for rehearing.

The VKI appealed against this decision to the Austrian Supreme Court. The Supreme court requested the CJEU’s preliminary judgement and made the final decision. This report concerns that final descision.

The Supreme Court allowed all the claims in the action and set aside the appellate court’s judgement. It decided that Amazon had to stop using the terms for concluding electronic sales contracts with consumers residing in Austria within three months. Furthermore, it prohibited Amazon to use these terms as objections in proceedings regarding contracts that had already been concluded. The VKI was also entitled to publish the Supreme court’s judgement in a newspaper on Amazon’s costs. Finally, Amazon had to reimburse the VKI for all legal costs of all Austrian proceedings and the CJEU-proceeding.

Type of enforcement
  • Civil judicial enforcement
  • Collective enforcement - Consumer association's action
Measures, actions, remedies claimed/applied

Consumer association’s action combating unfair terms and practices (BtoC), dismissal of court of appeal’s judgement, compensation of plaintiff for legal costs, publication of Supreme court’s decision in media on defendant’s costs.

Preliminary questions

(1) Must the law applicable to an action for an injunction within the meaning of Directive 2009/22 be determined in accordance with Article 4 of the Rome II Regulation where the action is directed against the use of unfair contract terms by an undertaking established in a Member State which in the course of electronic commerce concludes contracts with consumers resident in other Member States, in particular in the State of the court seised?

(2) If Question 1 is answered in the affirmative:

(a) Must the country in which the damage occurs (Article 4(1) of the Rome II Regulation) be understood as every State towards which the commercial activities of the defendant undertaking are directed, so that the terms challenged must be assessed according to the law of the State of the court seised if the qualified entity challenges the use of those terms in commerce with consumers resident in that State?

(b) Does a manifestly closer connection (Article 4(3) of the Rome II Regulation) with the law of the State in which the defendant undertaking is established exist where that undertaking’s terms and conditions provide that the law of that State is to apply to contracts concluded by the undertaking?

(c) Does a choice-of-law term of that kind entail on other grounds that the contractual terms challenged must be assessed in accordance with the law of the State in which the defendant undertaking is established?

(3) If Question 1 is answered in the negative:

How then must the law applicable to the action for an injunction be determined?

(4) Regardless of the answers to the above questions:

(a) Is a term included in general terms and conditions under which a contract concluded in the course of electronic commerce between a consumer and an operator established in another Member State is to be subject to the law of the State in which that operator is established unfair within the meaning of Article 3(1) of Directive 93/13?

(b) Is the processing of personal data by an undertaking which in the course of electronic commerce concludes contracts with consumers resident in other Member States, in accordance with Article 4(1)(a) of Directive 95/46, regardless of the law that would otherwise apply, subject exclusively to the law of the Member State in which is situated the establishment of the undertaking in the context of which the processing takes place, or must the undertaking also comply with the data protection rules of those Member States to which its commercial activities are directed?

Reasoning (legal principles applied)

The Supreme Court allowed all the claims in the action. It presumed that in principle the Rome I Regulation applies. As Amazon performed its business activities in Austria also and concluded sales contracts with consumers residing in Austria it stated also, that in principle Art 6 (1) Rome I Regulation would apply stating Austrian law to be applicable. In accordance to answer 2 of the preliminary judgement the Supreme court regarded, on the basis of Article 6 (2) Rome I regulation, the clause on Amazon’s choice of Luxembourg’s law as invalid, because it did not provide information, that consumers would also enjoy the protection of the mandatory provisions of Austrian law, even if Luxembourg’s law would have been effectively chosen. Consequently, the choice of Luxembourg’s law had to be regarded as invalid and the Supreme court applied Austrian law only (according to Art 6(1) Rome I Regulation). Under Austrian law the Supreme Court regarded the respective terms and conditions as unlawful.

Regarding data protection terms the Supreme court provided an additional reasoning: Although according to the preliminary judgement Luxembourg’s law would apply to Amazon’s terms regarding questions of use of personal data, this has no relevance to the case, since according to Austrian consumer law these terms could not be validly concluded. As the terms regarding the use of consumer’s personal data were uncertain, they could not be effectively concluded and could not become part of consumer contracts. The fact, that a use of data as described in the respective terms maybe lawful under Luxembourg’s data protection law, does not change this result, since Amazon did not claim these terms to be necessary according to Luxembourg’s law. So this possible conflict of Austrian consumer protection law and Luxembourg’s data protection law does not need to be solved. In addition, if the use of data as described in the terms would be lawful under Luxembourg’s law anyway, there could even be no legal advantage, if consumers confirm them.

A clause concerning an extra fee of EUR 1,50 in case of payment on receipt regarded the Supreme court as invalid under Austrian law, since such fees for choosing specific payment services are forbidden under Austrian law. The Supreme Court considered the respective Austrian provision to be in line with Art 52 of the Directive 2007/64/EC regarding payment services, since the CJEU (C-616/11, T-Mobile) confirmed a wide margin of discretion of the member states.

Since Amazon used the terms for concluding numerous consumer contracts the Supreme court entitled the VKI to publish its decision in a widespread newspaper on Amazon’s costs in order to inform consumers sufficiently.

Since the VKI won the legal dispute completely the Supreme court obliged Amazon to reimburse all legal costs of all stages of proceeding including the preliminary procedure.

Implementation of preliminary ruling

The Supreme court especially made the following CJEU-judgement effective:

“Article 3(1) of Council Directive 93/13/EEC of 5 April 1993 on unfair terms in consumer contracts must be interpreted as meaning that a term in the general terms and conditions of a seller or supplier which has not been individually negotiated, under which the contract concluded with a consumer in the course of electronic commerce is to be governed by the law of the Member State in which the seller or supplier is established, is unfair in so far as it leads the consumer into error by giving him the impression that only the law of that Member State applies to the contract, without informing him that under Article 6(2) of Regulation No 593/2008 he also enjoys the protection of the mandatory provisions of the law that would be applicable in the absence of that term, this being for the national court to ascertain in the light of all the relevant circumstances.”

Role of the Charter and role of the general principles on enforcement

Relation to scope of the Charter

Neither the CJEU nor the Supreme court provide information whether they regard the charter to be applicable.

Safeguards for access to justice
  • Right to access a court
  • Right to an effective remedy before a tribunal
  • Right to a fair trial
  • Right to a fair hearing by an independent and impartial tribunal previously established by law.
Reference to national provisions

No direct reference to national provisions as legal basis for principles and rights above.

Relevance of CFREU and ECHR articles or related rights

No direct relevance as the Supreme court does not refer to rights laid down in CFREU or ECHR, although such rights as laid down in art 8 and 16 CFREU apply to the case. As the supreme court’s decision is in line with CJEU's preliminary judgements its decision does not infringe charta-rights for sure. The VKI’s legal costs (EUR 30.914,91 including VAT) to be compensated by Amazon are high. Still they do not seem to be excessively high. Amazon’s obligation to bear these costs also seems to be in line with the limits to be derived from fundamental rights (Art 6 and 13 ECHR and Art 47 CFREU). 

Relevant principles applied
  • Equivalence
  • Effectiveness
Principle of equivalence

The Supreme court applied Austrian law implementing art 3 (1) of the directive 93/13/EC as it would have applied law without EU origin also. It also applied the Rome I regulation as effective as purely Austrian law.

Principle of effectiveness

The Supreme court applied Austrian law implementing art 3 (1) of the directive 93/13/EC and the Rome I regulation according to the interpretation given by the CJEU. Thus it made EU law apply effectively.

Elements of judicial dialogue

Vertical dialogue type
  • Direct dialogue between CJEU and National court (preliminary reference)
  • Dialogue between high court - lower instance court at national level
Cited CJEU
  • CJEU, C-618/10, Banco Español de Crédito SA
  • CJUE; C-472/10, Nemzeti Fogyasztóvédelmi Hatóság
  • CJEU, C-616/11, T Mobile
Dialogue techniques

Preliminary reference.

Conform interpretation with EU law as interpreted by the CJEU.

Purposes of using judicial dialogue

To apply Austrian law implementing art 3 (1) of the directive 93/13/EV and the Rome I regulation according to the interpretation given by the CJEU.

Expected effects of judicial dialogue

More clarified legal situation regarding terms of contracts between mail order businesses and consumers.

Additional notes on the decision

Impact on national case law

More clarified and consequently more certain legal situation concerning terms of mail order businesses in consumer contracts.

External links

Case author

Judge Thomas Horvath, Federal Administrative Court

Published by Chiara Patera on 18 September 2019