Tuesday, 1 November 2011

ECommerce Directive trumps Jurisdiction Regulation (maybe)

The CJEU’s Martinez/eDate judgment (C-509/09 and C-161/10, 25 October 2011) is another significant decision on cross-border internet liability.  In December last year we had Pammer/Alpenhof, which provided much needed guidance on what constitutes cross-border targeting of online activities under the consumer contract provisions of the Brussels Jurisdiction Regulation. 
Now the Court has turned its attention to cross-border tort liability, in two joined cases that raise questions under both the Jurisdiction Regulation and the Electronic Commerce Directive.   
The eDate case involved a claim for violation of personality right, the Martinez case infringement of privacy.  eDate was an Austrian company sued in Germany over statements on its Austrian website.  Martinez sued the English publisher MGN in France, over a publication on its English Sunday Mirror website.   
The most heavily reported aspect of the judgment has been that on jurisdiction.  I will start at the other end, with an aspect that didn’t even make it into the Court’s press release – and yet which has equally far-reaching implications.  This concerns the scope of the country of origin and internal market clauses of the ECommerce Directive.  These are powerful, often overlooked, provisions which can require a court to disapply a Member State’s otherwise applicable local law.
Some have argued that it is at best unclear whether these clauses apply only to restrictions of a public law or regulatory nature, or can also include disputes over private rights.  The judgment confirms that these clauses do apply to private rights. 
The country of origin provision of the Directive (Art 3.1) requires a Member State to ensure that service providers established in its territory comply with its law.  The internal market clause (Art 3.2) prohibits a Member State from restricting the freedom to provide information society services from another Member State.   Both apply only within the ‘co-ordinated field’ of the Directive, and are subject to exceptions such as copyright and industrial property rights. 
One argument in favour of limiting these provisions to regulatory regimes is the reference in the definition of co-ordinated field to ‘requirements with which the service provider has to comply’ – a phrase that does not read easily onto private law rights and obligations.   
The CJEU devotes two paragraphs of its judgment to determining that both the law to which a service provider established in a Member State is subject, and the provisions requiring other Member States to respect the binding nature of that law, include the private law field.  The Court relies on the reference to private law disputes in Recital (25), the reference to excluded private law rights and the reference to liability of service providers in the definition of the co-ordinated field.  The result is that the provisions apply to liabilities such as defamation and privacy infringement.
This should be very significant.  It ought to provide a basis on which to prevent a stringent local law from applying to an online service incoming from another Member State with a more liberal law.
That is exactly what the CJEU went on to hold.  The country of origin and internal market provisions do not amount to a rule of conflicts of law.  But the Member State must ensure that within the coordinated field, and subject to certain permitted derogations in a specific case, the provider of an electronic commerce service is not made subject to stricter requirements than those provided for by the substantive law applicable in the Member State in which that service provider is established.
This is all very positive for cross-border trade and publication on the internet within Europe.  But the last aspect of the judgment, the one that garnered all the headlines, is not.  It allows a person claiming infringement of personality rights to sue under Article 5(3) of the Brussels Regulation in the Member State in which his centre of interests is based (as an alternative to the Member State of the establishment of the publisher), for all the damage caused; or to sue in any Member State where the online content is accessible, only for the damage in that country.  So it is now very easy for a publisher established in one Member State to be sued in another, for the contents of a merely accessible website.  That is bad news for the internet.

It is still tempting to ask “so what?”.   According to the remainder of the judgment, under the ECommerce Directive the court should consider whether its local law is more stringent than that of another Member State in which the defendant publisher is established and, if so, disapply its local law unless grounds for a specific derogation can be established.  That is the theory.  In practice it is difficult to avoid the suspicion that a defendant would be better off arguing in front of its home court, rather than trying to persuade a foreign court to disapply its own local law.

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