On 25 January 2018, the Court of Justice of the European Union (“CJEU”)  issued its judgment on the case C-498/16, Schrems v. Facebook Ireland Limited. In its judgment, the CJEU made the following finding:

“Article 16(1) of Regulation No 44/2001 must be interpreted as meaning that it does not apply to the proceedings brought by a consumer for the purpose of asserting, in the courts of the place where he is domiciled, not only his own claims, but also claims assigned by other consumers domiciled in the same Member State, in other Member States or in non-member countries”

 As we reported in a previous blog, the preliminary ruling arose out of a claim brought by Mr. Schrems, domiciled in Austria, against Facebook, domiciled in Ireland, in which it was alleged that Facebook had committed a number of infringements of the EU data protection rules. The claim was filed by Mr. Schrems before the Austrian Courts and included claims from other consumers domiciled in Austria, other Member States of the EU, as well as non-EU countries, which consumers had assigned their claims to Mr. Schrems.

Following Advocate General Bobek’s opinion, the CJEU has ruled in favor of Facebook, holding that Mr. Schrems was permitted to bring his own claim but not those assigned by other individuals. The CJEU reasoned that, as article 16 is an exception to the general rule of jurisdiction provided under Regulation 44/2001 which confers jurisdiction upon the courts of the Member State in which the defendant is domiciled, it must be interpreted strictly. Consequently, the court reasoned that, as Mr. Scherms was not party to the contract between Facebook and the individuals who had assigned their claims to him, he could not bring proceedings on their behalf on the basis of article 16. According to the CJEU, interpreting Regulation 44/2001 in such a way would remove the predictability of the attribution of jurisdiction provided therein, which was one of the main objectives pursued by the Regulation.

Interestingly, the CJEU has not reflected in its judgment the Advocate General’s dictum in which he stated that a well designed and implemented collective action mechanism could foster judicial consumer protection. The CJEU has therefore decided to avoid entering into policy discussions to solve the case. Nevertheless, it will be interesting to see how this judgment may impact the European Commission’s collective action proposal, which we reported in this blog, and what measures would be proposed, if any, to address jurisdiction issues in the context of collective actions, such as the one raised in this case.




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