The European Court of Justice has ruled against Max Schrems in his attempt to consolidate an EU-wide consumer class action against Facebook Ireland before the Austrian courts.
Mr. Schrems had sought to bring a class action in the Austrian courts against Facebook Ireland for alleged data breaches to him and some 25,000 other users of Facebook. The Austrian courts referred a question to the European Court of Justice (“ECJ”) seeking clarification on whether such a class action could be heard in Austria given that the majority of individuals involved were not based there.
Under consumer law, a consumer is entitled to bring an action against a company in the country that the consumer is domiciled. Generally, when consumers are not involved, any breaches of a contract involving companies would be heard in a competent court where the company is established.
Mr. Schrems maintained that he, as an Austrian consumer, could bring a class action against Facebook Ireland in Austria and was entitled to represent the many other consumers who had assigned their rights to him.
The ECJ ruled that while Mr. Schrems is entitled to bring an action against Facebook Ireland in Austria, he cannot represent other consumers in a class action. The ECJ also dismissed Facebook Ireland’s claim that they could only be sued in Ireland as this is where their international headquarters is located. The court clarified that consumers can sue in their own country should they wish to litigate any issues they have against a company.
It is interesting to note that if this situation were to be revisited after 25 May 2018, when the new regime under the General Data Protection Regulation (“GDPR”) comes into force, such a right to bring a class action may be available. Consumers will soon have the right, subject to certain conditions, to mandate a third party to act on their behalf.
The upcoming GDPR is set to overhaul existing data protection laws for consumers.