“[…] a change in charges for the provision of electronic communications networks or services, resulting from the operation of a price adjustment clause contained in the standard terms and conditions applied by an undertaking providing such services, the term providing that such a change applies in accordance with changes in an objective consumer price index compiled by a public institution, does not constitute a ‘modification to the contractual conditions’ within the meaning of that provision, which grants the subscriber the right to withdraw from the contract without penalty”.
- Court of Justice, Fourth Chamber, judgment of 26 November 2015, case C-326/14 -
- The concrete case
An Austrian consumer association (hereinafter, the “Association”) brought an action for an injunction against one of the biggest provider of electronic communications services, in order to remove from the standard terms and conditions applied, a so-called indexation clause that excluded the right of withdrawal on an exceptional basis in case of tariff changes implemented on the basis of such indexation clause - for alleged infringement of Article 20 of Directive no. 22/2002 EC (hereinafter the "Directive").
Indeed the standard terms and conditions stated that, if the provisions relating to tariffs provided for an indexation, the operator should have the right to increase or decrease tariffs for the following calendar year, according to the increase or the decrease of the national consumer price index.
Moreover, such standard terms and conditions expressly excluded the consumer’s right of withdrawal because tariff changes were based on an agreed index.
- The issue referred for a preliminary ruling
The Austrian Supreme Court referred the following legal question to the European Court for a preliminary ruling: “Is the right, provided for in Article 20(2) of Directive 2002/22, for subscribers to withdraw from their contracts without penalty ‘upon notice of modifications in the contractual conditions’ also to be provided for in the case where an adjustment to charges derives from contractual conditions which, from the time when the contract is first concluded, provide that future charges are to be adjusted (upwards or downwards) in accordance with changes in an objective consumer price index reflecting movements in the value of money?”
As a preliminary point, it should be recalled that the Directive is intended to create a harmonised regulatory framework which secures, in the electronic communications sector, the delivery of a universal service, that is to say, of a defined minimum set of services to all end-users at a reasonable price. According to Article 1, paragraph 1, of the Directive, one of the purposes of the Directive is to ensure the availability throughout the European Union of good-quality publicly available services by means of effective actual competition and choice.
In this context, Article 20, paragraph 1, letter d) of the Directive provides that the contract shall specify in a clear, comprehensive and easily accessible form details of prices and tariffs and the means by which up-to-date information on all applicable tariffs and maintenance charges may be obtained. Moreover, pursuant to paragraph 4 of the same article, “subscribers shall have a right to withdraw from their contracts without penalty upon notice of proposed modifications in the contractual conditions. Subscribers shall be given adequate notice, not shorter than one month, ahead of any such modifications and shall be informed at the same time of their right to withdraw, without penalty, from such contracts, if they do not accept the new conditions”.
- The judgment of the CJEU
According to the judges of the Court of Justice, the Directive is not aimed at allowing the contracting party (whether consumer or professional) to oppose any modification of the terms and conditions implemented by the operator, but at assuring the contracting party’s possibility to receive from the beginning – i.e. from the conclusion of the agreement – any useful and necessary information in order to be aware of contractual terms and conditions and to be able to react, through the right of withdrawal, to modifications of what has been previously agreed.
What one wants to avoid is not the modification of the contract, but the “unexpected” modification of the contract.
So, with reference to price and tariff indexation clauses, what matters is that they are predetermined and disclosed to the contracting party since the conclusion of the agreement, in accordance with the principles of transparency and clarity set out in recital 49 of the Directive.
Therefore, if the operator has carried out all that is necessary to guarantee proper information to the contracting party upon the execution of the contract, there is no need to grant a right of withdrawal to such contracting party since the same was aware from the beginning that the agreement entered into provided for pre-set tariffs subject to variations on the basis of a known and predetermined index.
In conclusion, the Court of Justice has excluded that the modification of the tariff or price of the service derived from the application of a so-called indexation clause provided in the standard terms and conditions may constitute a “change of contractual conditions”, pursuant to Article 20 of the Directive and has therefore decided that in such case the subscriber is not entitled to withdraw.