CJEU in C‑102/20, StWL Städtische Werke Lauf

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Today we would like to recall one of the judgments delivered by the Court still in late 2021 – in case C-102/20 StWL Städtische Werke Lauf. Since many language versions of this judgment were not available until recently (including the English one), it may be helpful to summarise it quickly, while interested readers can now consult the full text of the Court’s decision here. The case is noteworthy as it combines an interpretation of the e-Privacy Directive 2002/58/EC with that of Directive 2005/29/EC on unfair commercial practices (UCPD). 

 Facts of the case

The case involved two competing electricity suppliers in Germany, one of whom commissioned a marketing campaign consisting in displaying ads to the users of a free email service, T-Online. The advertisements appeared in private email inboxes of those users, inserted between the emails received. The entities differed from the incoming emails in three respects: (i) the date was replaced by the word ‘Anzeige’ (advertisement), (ii) no sender was mentioned and (iii) the text appeared against a grey background. The subject of the “message” was of promotional nature, and referred to advantageous prices for electricity and gas services. Upon clicking on it, the user was redirected to the advertiser’s website. 

A competitor of the supplier engaged in this form of promotion considered the practice to be unlawful under German law. Among others, it was argued, the practice violated the provisions on unsolicited email marketing and persistent unwanted solicitation. Since both issues also fall under EU law, the German Supreme Court (BGH), hearing the appeal, decided to stay the proceedings and refer questions concerning the e-Privacy Directive and the UCPD to the Court of Justice.

Judgment of the Court

The CJEU focused on two issues: firstly, the concept of electronic mail, and use thereof, within the meaning of the e-Privacy Directive, and secondly, the reading of the per se prohibition set out in point 26 of the Annex to the UCPD. 

Unsolicited email marketing (e-Privacy Directive)

Pursuant to Article 13(1) of the e-Privacy Directive the use of, among others, electronic mail for the purposes of direct marketing may be allowed only in respect of subscribers or users who have given their prior consent. What the Court had to analyse was, therefore, whether the factual situation in the case at hand qualified as the use of electronic mail covered by the Directive. 

The Court did not seem to have doubts about an affirmative answer to this question. Firstly of all, the fact alone that commercial messages were communicated by means of email inbox was sufficient for the CJEU to conclude that the use of electronic mail referred to in Article 13(1) took place (para. 46). Moreover, the Court opted for a broad reading of direct marketing, whereby selection of recipient remains irrelevant to the qualification of commercial communications as addressed “directly and individually” to that recipient. In other words, the fact that respective communication is sent “on a mass, random basis to multiple recipients” does not disqualify it as direct marketing. A user who obtains access to his or her inbox only after having entered his or her registration data and password and sees commercial messages in that space counts as an individual recipient (para. 51). 

Two extra points

While the response of the Court could be limited to these two points, two additional points are worth considering. Firstly, the Court expressly stated that the list of means of communication, referred to in Article 13(1) of the e-Privacy Directive, is not exhaustive, but instead should be given a broad interpretation, evolving
from a technological perspective (paras. 38-39). The leaves it open what other ways of communicating messages via publicly available electronic communications services, similar to voice calls, fax, SMS/MMS and email, could fall under Article 13(1) – with the consequence that the use of such services for direct marketing would always require user’s prior consent. Messaging apps, such as Messenger or WhatsApp, certainly come to mind. Interestingly, Facebook reportedly intended to insert ads in WhatsApp, but abandoned the idea following public backlash. It now seems that legal reasons would also speak against it, especially in view of the broad reading of ‘direct marketing’ recalled above.

The second point, which the CJEU decided to address without being directly asked about it, concerns the corresponding consent of the user. Not surprisingly, the Court observed that consent must “be indicated, at least, in a manifestation of a free, specific and informed wish on the part of the person concerned”, in line with the conditions which are now extensively defined in the General Data Protection Regulation (para. 57). What seems most interesting in this regard is the reading of “freely given” consent in the context of so-called bundling, i.e. whereby access to a service is conditioned on granting one’s consent. While the judgment did no address this directly, the Court appears to pay attention that two versions of the email service were available to the user – a paid and ad-supported one (para. 58). Arguably, this direction of reasoning can be accepted with regard to freely given consent, provided the conditions of the paid subscription are reasonable – a matter which the CJEU did not explore in the case at hand. Like in the previous case law, the Court devoted more attention to the informed nature of consent, specifying that users should be clearly and precisely informed about the means of adverts distribution, in particular the fact that advertising messages are displayed within the list of private emails (para. 59). While the lack of clear guidance on the freely given consent is somewhat disappointing, it is interesting that consent given to the email service provider is accepted as relevant for assessing the lawfulness of specific commercial messages communicated through this service. Advertisers making use of such services are thus advised to verify the consent mechanisms applied by their providers.

Persistent and unwanted solicitations (UCPD)

In the second part of the judgment the Court turned to consumer law stricto sensu, namely to Directive 2005/29/EC on unfair commercial practices. To recall, point 26 of the Annex to the UCPD establishes a per se prohibition of “making persistent and unwanted solicitations by telephone, fax, e-mail or other remote media except in circumstances and to the extent justified under national law to enforce a contractual obligation”. A question was thus posed if activities considered in the case at issue fulfilled the above criteria.

As was to be expected, the Court found that advertising messages, such as those in the case at issue, consitituted a solicitation of email service users within the meaning of point 26 of the UCPD black list (para. 71). What is surprising, however, is the limited guidance as regards the criteria of “persistent” and “unwanted” nature. As for the former, the focus remained on the messages from a particular advertiser and a broad reading of persistent solicitation was applied, whereby three ads within a period of approx. 1 month were deemed to be persistent (para. 73). The Court did not elaborate, however, if persistence may also refer to the commercial
messages displayed in the email service as a whole. That question,
arguably, remained outside the scope of the present dispute, but is definitely a practically relevant one.

As for the “unwanted” nature of solicitations, the Court connected it to the absence of consent of the user prior to the display of ads. However, what exactly is meant by such “consent prior to the display” is not elaborated. While a connection to the first part of the judgment would make sense at first glance, on a closer look some questions can be posed. If what we analyse are specific commercial messages inserted in the mailbox, can consent to the use of email service really be decisive? And if so, shouldn’t that consent also specify the type of adveritsements which the user does not wish to receive, or at least be conditional on the possibility of screening them subsequently? As a matter of fact, the Court mentioned the relevance of user’s “opposition” to advertising practices, which was supposedly established in the main proceedings – this, nonetheless, is not apparent from the recalled facts of the case. Overall, the reading of the UCPD in case C‑102/20 disappoints and further guidance on the notion of persistent and unwanted solicitations will certainly be needed.

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