References: Paris Court of Appeal, judgment rendered on 12 February 2016, docket # 15/08624

In a 12 February 2016 decision, the Paris Court of Appeal ruled that the jurisdiction clause provided for in Facebook’s general terms and conditions (T&Cs), pursuant to which only Californian courts have jurisdiction to rule on disputes that may arise between Facebook and its users, is unfair and therefore invalid under French Consumer Law.

In making its ruling, the Paris Court of Appeal first found that the contract entered into between Facebook and its users is deemed a “consumer contract”.

The Court ruled that, even though Facebook’s services are free, the company generates profits through these services, and is therefore to be considered as a “professional” under French law. Because the plaintiff used the social network for non-professional purposes only, the plaintiff acted as a “consumer” under French law. On these grounds, and also because the contract at hand is a “standard form agreement” that does not allow for negotiation, the Paris Court of Appeal ruled that the contract entered into between Facebook and its users is a “consumer contract” under the meaning of the French Consumer Code. According to the Paris Court of Appeal, therefore, the contract is protected by the specific provisions set out in the Consumer Code that apply to “unfair contractual clauses”. The Court of Appeal then noted that, as Facebook’s T&Cs are a consumer contract, the jurisdiction clause reverting French users to US courts is considered as unfair, and therefore invalid.

Pursuant to Article L.132-1 of the French Consumer Code

In contracts concluded between a professional and a non-professional or a consumer, clauses that aim to create or result in the creation, to the detriment of the non-professional or the consumer, of a significant imbalance between the rights and obligations of the parties to the contract, are unfair. […] Unfair clauses are deemed to be null and void.

Specifically, Article R.132-2 of the French Consumer Code establishes a legal presumption that clauses with the aim, or effect, of cancelling or reducing the consumer’s right to initiate judicial proceedings, are unfair.

In this particular case, the Paris Court of Appeal ruled that the consumer’s obligation to bring any lawsuit only before Californian courts gives rise to substantial costs that are unconscionable and therefore have a dissuasive effect on the consumer. As a result, the Court decided that Facebook’s jurisdiction clause is unfair, and therefore null and void, as it creates a significant imbalance between the parties’ rights and obligations.

On these grounds, the Paris Court ruled that consumers residing in France are not bound by the jurisdiction clause provided for in Facebook’s T&Cs.

It is worth noting that another French Court of Appeal had already reached a similar decision, although based on different grounds. The Pau (in the South West of France) Court of Appeal found on 23 March 2012 (docket # 12/1373) that the Facebook jurisdiction clause was not enforceable against French users as a result of Facebook users’ lack of consent. To reach this conclusion, the Court took into account the facts that the jurisdiction clause was in English, was drafted in small font only, and users were not invited to sign it electronically.

There is concern that the Paris Court’s ruling will be followed by other courts and applied to other social networks or digital data services whose T&Cs contain a similar jurisdiction clause.

It is also possible that Facebook will appeal the Paris Court’s decision before the French Supreme Court.