15. 3. 2018

The Court of Justice of the European Union did not allow collective action

For a long time now, Schrems has been fighting with a social networking giant, Facebook, whom he accused of violating European data protection law, including the transmission of its data to US intelligence services. In this case, he brought collective action against Facebook before Austrian courts in Vienna (based on the provisions regarding the jurisdiction in case of consumer disputes) in which he represents interests of 25,000 other Facebook users. It is supposed to be the largest private collective action in the EU to date, in which Schrems claims damages for each consumer in the fixed amount of EUR 500.

In case C-498/16, the Court of Justice of the European Union (CEU) replied to two questions for preliminary ruling of the Austrian Supreme Court by following the opinion of advocate general, Michael Bobek. It explained that Schrems, as a user of a private Facebook profile, does not lose consumer status only because he acts as a data protection activist. Furthermore, it ruled that Schrems does not have the capacity to bring the collective action before the court of the place where he is domiciled also on behalf of other consumers domiciled in the same Member State, in other Member States or non-member countries. 

Special EU rules on the jurisdiction in the consumer disputes apply only to individual consumer asserting his own claims from the consumer contract, and not to the collective action on behalf of several such consumers. As a result, Schrems (and all other consumers) may only enforce his own claim against Facebook in his place of residence.

Recently adopted Collective Action Act, which shall enter into force on 21 April 2018, explicitly allows bringing the collective action in case of consumer disputes. However, such action may only be brought by the organisation, which is a legal entity established with the purpose to protect consumers’ rights and interests. Consequently, under the Slovene law and given the general rules on the territorial jurisdiction, any collective action against Facebook would have to be brought before the court in the place of the Facebook’s registered office.
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