This is a vexed question on which the European Court of Justice has provided some welcome guidance. A business trading online can be sued by a consumer in an EU Member State other than where it is based where it directs its sales activity at consumers in another Member State. The ECJ considered the meaning of "directing" sales activities at a Member State in two recent cases.
In the case of Peter Pammer v Reederei Karl Schlüter GmbH & Co KG (C-585/08), the claimant Mr Pammer had booked a voyage by freighter from Italy to the Far East with the German company Reederei Karl Schlüter ("RKS") via its agent's website. Mr Pammer lived in Austria and took his complaint to the Austrian courts. RKS argued that it did not pursue any business activity in Austria and so it could not be sued there.
In the case of Hotel Alpenhof GesmbH v Oliver Heller (C-144/09), the defendant Mr Heller, a German resident, had booked rooms at a hotel after viewing its website. Hotel Alpenhof sued Mr Heller in the Austrian courts for non-payment of his hotel bill. He argued that he could only be sued in the German courts.
Both national courts referred questions to the ECJ for clarification. One question was whether the mere fact that a website is accessible from a Member State on the internet is sufficient to justify a finding that activities are being directed at that Member State.
The ECJ said that the mere fact that a website was accessible in another Member State was not enough. The ECJ went on to mention features on a website which it felt would indicate that a business in one Member State was directing trade at consumers in another Member State and others which would not.
Among those features which the ECJ felt would indicate the directing of sales activity to another Member State were:
- using a language or currency other than that used in the Member State where the business is established
- providing international codes with telephone numbers
- using a domain name of a Member State other than that used in the one where the business is established
- mentioning international clients who are located in various Member States.
Among those features which the ECJ felt would not give any such indication were:
- merely mentioning an email address or contact details for another Member State
- using alternative languages or currencies, if they are also generally used in the Member State where the business is established.
It remains to be seen how national courts will apply the ECJ's judgment, but the ruling and the decisions that will follow should prove helpful for businesses wishing to promote and sell their products or services via the internet but only wanting to attract custom in the Member State in which they are based.
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This briefing is written as a general guide only. It is not intended to contain definitive legal advice which should be sought as appropriate in relation to any particular matter.