Europe v Facebook’s class action against Facebook Ireland

Maximillian Schrems v. Facebook Ireland (Vienna Commercial Ct. filed July 31, 2014)

On July 31, 2014, attorney and member of Europe v Facebook, Maximilian Schrems, filed a complaint (available in German) against Facebook Ireland Ltd. (“Facebook Ireland”) in Vienna Commercial Court. The lawsuit, prompted by delays in Schrems’ challenge to Facebook Ireland in the Irish legal system (discussed in our sections on Challenges in Ireland and before the CJEU) complains about Facebook’s alleged participation in the Prism program and also challenges Facebook’s Graph Search feature, tracking of users on external websites (e.g., via “like” buttons), unauthorized passing of user data to external applications, and failure to secure effective consent for many types of data use. The suit also includes tort and unjust enrichment claims.

Taking advantage of a provision of Austrian law that allows individuals to join a lawsuit by assigning their claims to the main plaintiff, Europe v Facebook posted an on line registration app. After approximately 25,000 individuals had registered by early August, participation in the lawsuit was closed so that Mr. Schrems’ attorneys could verify that registrants met the eligibility criteria of being non-commercial adult members of Facebook outside the United States and Canada whose contracts, by contrast to those of Canadian and US members, are with Facebook Ireland, rather than Facebook USA. As of August 21, about 35,000 more people had registered to join should the action be expanded later. The lawsuit seeks damages of £500 for each participant, and Europe v Facebook intends to leave the registration app online until the last possible day for expansion of the lawsuit, which, under Austrian law, is the last day of oral argument.

According to a fact sheet posted by Europe v. Facebook, EU law governs the data protection claims in the lawsuit. Under the Terms and Conditions of Facebook Ireland Ltd, California law governs the tort claims in the lawsuit, except that German law governs for German participants. Under Council Regulation (EC) No 44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters, an Austrian ruling cannot be opposed in Ireland and can be enforced directly without separate recognition in Ireland or implementation in an Irish ruling.

On August 18, 2014, the first procedural barrier was surmounted when the Vienna Court ordered (in German) that Facebook Ireland respond to the complaint within four weeks.

On September 26, 2014, Facebook Ireland refused to accept the complaint, which had been served on it in German, on the ground that no one at Facebook Ireland understood German. Rather than contest that allegation, Europe v Facebook provided the court with a certified English translation of the complaint on October 3. According to Europe v Facebook, EU law only requires the initial filing in a lawsuit to be translated for a defendant who lacks the requisite linguistic skill. The proceedings in the Austrian lawsuit will be conducted in German, and Facebook Ireland will need to be represented in court by an Austrian lawyer.

In a submission on November 25, 2014, Facebook raised numerous procedural challenges to the lawsuit, including, according to Europe v Facebook, that its users were not competent to assign their claims to Mr. Schrems and that the claims against Facebook were solely within the jurisdiction of the Irish Data Protection Commissioner.

After the first hearing in the case was held on April 9, 2015, on July 1, the Viennese Regional Court (“Landesgericht”) held that it had no jurisdiction over the European “class action” because since Schrems used at least one of his Facebook accounts for professional purposes, he was not a consumer. Europe v Facebook intends to appeal the determination of no jurisdiction to the Higher Regional Court (“Oberlandesgericht”). A further appeal would lie with the Austrian Supreme Court (“Oberster Gerichtshof”).

 

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