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Marianne Roth[*]
The internet enables products and services to be marketed worldwide, to an extent never previously experienced. Today, even small enterprises regard it as important to present themselves on their own websites, while at the same time, more and more individuals are using the internet from their computers at home. Accordingly individuals can easily obtain information, choose from a wide range of goods and services and then, with a mouse click, enter into a contract, without being restricted by national borders. And this is precisely where the problem often arises. Together with the increase in international business activities on the internet, the potential for conflict in this area is also increasing. What should the buyer do if the foreign seller either fails to deliver, or delivers defective goods or engages in unfair business practices? In the last instance, as elsewhere in business life, the only course left is legal action.
Of course, the question that arises is which court is competent for these proceedings? Who may sue at home and who will be obliged to go through the arduous process of commencing litigation abroad? Then, when this question has been answered, the next stage is to determine the applicable law: what substantive law must the court apply in practice, the lex patriae of one party or the law of the other party, or perhaps a third legal system?
In the following, I will pursue these questions. First, I shall consider electronic contracts entered into between enterprises (business-to-business) and, secondly, I shall discuss the special features of consumer contracts (business-to-consumer). The questions that arise are dealt with from a European and, in particular, from an Austrian point of view, while the subject of international jurisdiction also offers the chance for a comparative-law perspective on US law. On the basis of the attempts here described to restrict the legal reach of internet activities, I will finally address the question of the universal nature of the internet in European consumer transactions and the parallel problems with regard to electronic competitive practices.
In Austria, international jurisdiction in matters involving the member states of the European Union (EU), with the exception of Denmark, is governed by the Brussels I Regulation, which entered into force on 1 March 2002.2 This replaced the European Convention on Jurisdiction and Enforcement (Brussels Convention),[3] which was in force before that date and now only applies in relation to Denmark.[4] In dealings with the European Free Trade Association (EFTA) states, Iceland, Liechtenstein, Norway and Switzerland, international jurisdiction is governed by the Lugano Convention,[5] which is almost identical in content to the Brussels Convention.
Outside the international area of application of the Brussels I Regulation and the two European Conventions, for example in relation to the internet market leader USA, relations are governed by the respective autonomous rules of the state where legal action is sought. In Austria, for example, local jurisdiction is governed by the rules of the Austrian Jurisdiction Act (Jurisdiktionsnorm, referred to below as JN), which also apply to international jurisdiction with necessary changes.[6] The Hague Conference on Private International Law has for a considerable time been endeavouring to extend the area of application of the European Conventions, the Brussels Convention and the Lugano Convention, by creating a worldwide Hague Jurisdiction and Enforcement of Judgments Convention.[7] To date these efforts have failed, above all as a result of resistance from the US.[8] I will discuss this problem area in connection with the comparative treatment of US law later.
The substantive law applicable to internet contracts, in Austria and in the EU in general, is determined by the EC Convention on the Law Applicable to Contractual Obligations (also known as the Rome Convention on the Law Applicable to Contractual Obligations) which contains uniform conflict-of-laws
provisions for all matters with a foreign element. Thus, the Rome Convention applies regardless of whether the foreign connection is to a contracting state or to a non-contracting state.[9] Since the implementation of the Electronic Commerce Directive, however, in business-to-business contracts10 within the EEA (EEA),[11] the conflict-of-laws principle of the country of origin contained in Article 3(1) and (2)[12] has overridden the applicable Rome Convention rules for determining the proper law.13 As a result, it is now necessary in business-to-business contexts to distinguish between matters outside and those within the EEA. However, this will not play a big role in practice, since the main conflicts provision of the Rome Convention in the business-to-business context, the standard reference to the seller’s law of establishment, largely overlaps with the connecting factor under Article 3(1) and (2) of the E-Commerce Directive; only in exceptional cases, there may be certain deviations.
In Austria the E-Commerce Directive was implemented by the E-Commerce Act (E-Commerce-Gesetz, referred to below as ECG),[14] which came into force on 1 January 2002; s 20 ECG is almost identical word for word to Article 3(1) and (2) of the E-Commerce Directive.
The principle of the country of origin as a conflict-of-laws provision in the E-Commerce Directive and the Austrian ECG is of crucial importance, on the other hand, in the international law of fair trading. Here too a distinction must be made: internet sellers with their place of business inside the EEA are subject to the country-of-origin rule in Article 3(1) and (2) of the E-Commerce Directive and s 20 of the ECG, with regard to their competitive behaviour within the EEA; while in other respects for EEA sellers in outside markets and for sellers from non-EEA countries the relevant conflict-of-laws rule is found in the autonomous law of the state where legal action is sought. In Austria, for example, the relevant rule is located in the Act on Private International Law (Internationales Privatrechtsgesetz, referred to below as IPRG), which differs markedly from the ECG.
The question as to jurisdiction may appear at first sight to be merely a formal matter, but it is very important for those affected. Above all in international dealings, it makes a great difference and may even decide the outcome of the case whether a party can institute legal proceedings in its home country or whether it has to litigate in a foreign court whose language it does not understand, whose rules of procedure it does not know and which may perhaps use a different substantive law than the domestic court would. So what options are available to the parties for disputes relating to internet contracts that they enter into in the course of their professional or commercial activities?
Claims under internet contracts may in all events be pursued at the general place of jurisdiction of the defendant, that is, at the residence of a natural person or at the seat of a juristic person.[15] Under autonomous Austrian law, even habitual residence of a party in Austria establishes jurisdiction.[16] However, in practice this general place of jurisdiction is not of great significance, since the parties often make a choice of forum agreement in advance and thus exclude it from the outset.
In contrast, the jurisdiction of the place of performance is of great practical importance. Both European legal sources and autonomous Austrian law provide for this jurisdiction as an alternative to the general place of jurisdiction.[17]
Under s 88 JN, to create a jurisdiction of the place of performance, it is necessary for the parties to the contract to agree on the matter;18 in the case of sales of goods between businesspersons, the unilateral declaration of the seller on the invoice, which must be supplied at the latest together with the goods, is sufficient.[19] The place of performance is then determined by the agreement or by the place stated in the invoice. The courts of the place of performance, determined in this way, have jurisdiction for all actions for a declaratory judgment as to the existence or non-existence of the contract, its termination and compensation for nonperformance or defective performance.[20]
There are no formal requirements for the agreement on a place of performance. It may be entered into electronically, but in the case of dispute, or if in exceptional circumstances an official review of jurisdiction is admissible,[21] it must be ‘proved by documentary evidence’ to the court.[22] In principle, a paper printout of the relevant electronic texts, incorporating the ideas in writing, would satisfy the definition of a document (Urkunde).[23] However, case law requires the jurisdiction clause of s 88(1) of the JN to be confirmed by the signature of at least the party that is disputing in court the agreement on the jurisdiction of the place of performance.[24] The requirement of a personal signature in e-commerce, however, is satisfied only by a special encoding technology that fulfils particular security standards with regard to the authenticity and integrity of electronic data (s 2(3) of the Signature Act 1999). In addition, the Signature Act (Signaturgesetz, referred to below as SigG)25 refers to a safe electronic signature and expressly states that it is equivalent to a personal handwritten signature (s 4(1) SigG).
If, therefore, case law requires the signature of one party to prove the existence of an agreement on jurisdiction, it will probably require such a securely signed electronic document in the case of internet transactions. In these cases, however, ‘documentary proof’ of the agreement cannot be a mere printout of the securely signed electronic document, for the printout embodies not a document that has actually been signed, but an encoded document,[26] which must therefore be treated as an unsigned document.[27] Instead, the electronic document itself must be presented to the court, for instance stored on a disk. Electronic documents are actually seen as items of visual evidence,[28] because they are not embodied in a physical medium (such as paper, clay, wood or metal), although s 4(3) SigG expressly extends the particular evidentiary value of signed private documents to include securely signed electronic documents. As a consequence, under s 294 of the Code of Civil Procedure, these documents are considered to present the full proof, binding the court, of the genuineness of their contents and are therefore treated as equal in value to signed private documents in the law of evidence in civil procedure.[29]
Unlike the autonomous Austrian law, provisions of the European jurisdiction grant the jurisdiction of the place of performance by operation of law, that is, irrespective of any agreement between the parties.[30] However, if the parties have entered into an agreement on the place of performance, the jurisdiction again is primarily determined by the agreement of the parties.[31] Failing this, the following distinctions must be made, depending on the applicable law.
Under the Brussels Convention and Lugano Convention, the place of performance is determined by the law that is applicable to the contract in question, under the provisions of private international law.[32] Without anticipating the question of what law is applicable, it can be stated that internet contracts are normally governed by the legal system of the country in which the seller has his or her normal residence on the date when the contract was entered into or, if the seller is a juristic person, its establishment.[33] For example, if an Austrian internet user takes up the offer of goods or services of a foreign seller on the internet, the transaction is normally governed by foreign law, and that foreign law usually decides where the place of performance is.
Under most legal systems, unless otherwise agreed, goods are obligations to be performed at the place of business or residence of the seller, as is the case under s 905 Austrian Civil Code and ss 269 and 270 German Civil Code.34 The same is true if the UN Convention on Contracts for the International Sale of Goods applies and is the uniform substantive law, thus removing the need for a connecting factor under conflicts law:[35] If the contract does not require the goods to be shipped, there is an obligation to be performed at the place of business or residence of the seller. Where the buyer purchases goods provided online by downloading,[36] the place of performance is therefore the place where the seller had its establishment when the contract was entered into.[37] In contrast, orders on the internet necessitating conventional shipping are to be performed at the place where the seller transfers the goods to the first independent carrier for transport.38 In both cases, whether with or without contractually agreed shipping, the place of performance is normally not in the country where the internet user has his or her residence or establishment. Thus even if the UN Convention on Contracts for the International Sale of Goods is applied, the internet user will not have access to domestic jurisdiction.
Under those legal systems most usually encountered, services are to be performed at the place determined by agreement of the parties or the nature of the service. Although the internet user calls upon the services from his or her computer, the real service consists in entering the data, and this is usually done at the residence or establishment of the seller.[39] As a result, even those who enjoy services via the internet will normally not have a domestic jurisdiction.
If the internet seller wants to sue for payment, its jurisdiction under Article 5(1) of the Brussels Convention and the Lugano Convention will be based on the place of performance where the obligation to pay money arises. Where the UN Convention on Contracts for the International Sale of Goods applies, art 57 provides for a place of performance favourable to the plaintiff, in the case of debts with regard to the purchase price, at the seller’s place of business, in our context at the internet seller’s place of business.[40] Furthermore, the place of performance of the obligation to pay money must also be determined under conflicts of laws provisions.41 Depending on which national law applies in the individual case, payment obligations must be performed at the debtor’s place of business (as is the case in Germany, Austria, France, Belgium, Luxembourg and Greece) or at the creditor’s place of business (as is the case in Switserland, the Netherlands, Denmark, Sweden, Italy and the United Kingdom).[42] As a result, the courts have jurisdiction both at the internet user’s place of business or those at the seller’s place of business.
In order to avoid such a laborious procedure for establishing the place of performance under conflict of laws provisions, Article (5)(1)(b) of the Brussels Regulation now contains an independent definition of the place of performance for the purposes of determining jurisdiction: In the absence of an agreement to the contrary, the place of the performance is the place where, under the contract, the goods were delivered or should have been delivered. In the case of services, the place of performance is the place where, under the contract, the services were provided or should have been provided. So here, reference is made to a purely factual criterion, that is, performance in conformity with the contract, without having to have resort to any national law. The place of performance established in this way also applies to all kinds of claims, including the agreed financial consideration and any secondary claims, this is a genuine simplification in contrast to the Brussels and Lugano Conventions.[43]
Apart from this, the new provision for internet contracts brings scarcely any changes. Where, in internet contracts, conventional shipping of the goods ordered is agreed on as an ancillary obligation, the seller fulfils its obligation in the meaning of art 5(1) of the Brussels Regulation when it delivers the goods to the postal service, railway or other transporter. Thus the place of performance is normally the seller’s place of business.
The situation is to be judged in the same way if the goods ordered online are to be delivered by way of the internet, such as by downloading the desired software. The seller feeds its performance into the internet from its place of business by handing the goods to the transporter internet, from which the customer receives them by downloading them via his or her terminal, in the same way as he or she collects postal consignments from the mailbox. Here it makes no difference, in my opinion, whether the seller, when it performs its side of the contract, has to take into account the specific customer data (that is, the seller’s performance is given with reference to the client’s system, as in the case of browser software to access an online service) or whether the seller makes standard contract packages available to be called on.44 In both cases, the seller acts exclusively from its place of business.
Services that are rendered over the internet, for example information on timetables or directory enquiries, are also normally fed into the internet at the service provider’s place of business, and this feeding into the internet constitutes the service. The user then makes use of the services from his computer, but the actual performance consists in the seller entering the data, and therefore the place of performance here is also to be seen as at the internet seller’s place of business.
In summary, it can be stated that the various sources of law, despite all their differences, do at least agree in their result when they establish the place of performance: the internet user, who buys goods or services over the internet, will not normally have access to a domestic jurisdiction.
In addition to the places of jurisdiction named above, the parties also have the possibility of agreeing between themselves upon the court with jurisdiction over their case. In their general terms of business, internet sellers often include a choice of jurisdiction clause that provides for a particular court, or at least for courts of a particular country to have jurisdiction and usually this is the country where they have their place of business.[45] The admissibility of such a choice of jurisdiction clause is to be examined under the procedural law applying at the place of the court. In Austria, this occurs under Article 23 of the Brussels Regulation or Article 17 of the Brussels Convention and the Lugano Convention and in relation to nonmember countries this occurs under s 104 of the JN.[46]
Under European law, a choice of forum agreement must normally be in writing or at least confirmed in writing;[47] although the declaration need not be signed.[48] In addition to this, Article 23(4) of the Brussels Regulation expressly states that electronic communications which make it possible to record the agreement in a permanent form are treated in the same way as agreements in writing.
In contrast, autonomous Austrian law, which applies in relation to countries that are not EU or EFTA member states, is stricter. Section 104 of the JN requires only an express declaration by the parties, which is subject to no formal requirements. However, this declaration, just like the agreement on a jurisdiction of place of performance discussed above,[49] in the case of dispute or in the course of an official review of jurisdiction, ‘must be evidenced by documents’.[50] Since signatures are important in the law of evidence, it is also the unanimous opinion here that the declaration of the parties to be evidenced must be supported by the personal signature of at least the later party disputing this.[51] However, as stated above, in e-commerce only a secure electronic signature satisfies the requirement of a personal signature.[52] Where electronic choice of forum agreements have to be documented in legal proceedings, they are therefore recognised only if their contents are confirmed by a secure electronic signature.
Choice of forum agreements, however, as a general rule also give rise to international jurisdiction in the country of the internet seller’s place of business. Overall, in the case of legal relations without consumer involvement, it can be stated that only as an exception will places of jurisdiction for actions against a foreign internet seller be established in the user’s own country. In business dealings between business persons, however, this result is quite acceptable.
Similarly to international jurisdiction, the parties may, as a general rule, freely decide on the law governing their contract.[53] This freedom of choice of law also applies to EEA matters which are principally governed by the E-Commerce Act (see above). Section 21(5) of the E-Commerce Act expressly excludes the freedom of the parties to a contract to choose the governing law from the principle of the country of origin of the E-Commerce Act.54
Sellers who operate globally have an interest in maintaining all their transactions on a uniform legal basis and therefore general terms of business often contain such choice-of-law clauses.[55] In cross-border internet dealings, in particular, it is quite customary to provide that the law of a third country shall apply and such a choice of law is also valid.56 It is only if both parties to the contract have their establishments in Austria that the agreement is to apply foreign law. However, in the opinion of some this is regarded as invalid.[57]
Since the E-Commerce Act entered into force, where the parties have made no choice of law, a distinction must be made between matters faced by member countries and non-member countries. Article 4 of the Rome Convention provides that the contract is governed by the law of the country with which it has the closest connections. Article 4(2) of the Rome Convention assumes that these connections are closest with the country in which the party owing the characteristic performance has its habitual residence, or place of business, at the date when the contract is entered into. The characteristic performance, however, is normally that of the internet seller, whereas the customer is obliged only to make the payment; one need only think of the contracts of sale or for services that are common on the internet. In consequence, Article 4 of the Rome Convention normally refers to the law of the internet seller and in the case of transactions with foreign sellers this will be the foreign law in question.[58]
Article 4(5) of the Rome Convention offers a possibility to correct this fundamental principle. It provides that the assumption described above is deemed to have been refuted if the totality of the circumstances suggests a closer connection to another country. In internet transactions, such a closer connection to another country will exist only as an exception, but at least the notion is conceivable. Let us assume that a seller has its place of business in Germany, but advertises in Austria using an Austrian internet address containing the letters ‘at’. This Austrian website does not create a place of business in Austria, but if, for example, by the use of appropriate sales and delivery restrictions they are directed solely at the Austrian market,59 then by way of the escape clause in Article 4(5) of the Rome Convention, one could possibly assume that the contract was more closely connected to Austria and thus achieve the application of Austrian law.[60] If virtual shops merely make use of domestic suppliers or transport enterprises, however, this does not affect the basic assumption[61] and the applicable law remains that of the residence or place of business of the internet seller. Similarly, the installation of automatically downloaded programmes, such as browser software to connect to an online service, does not justify assuming a closer connection to the customer’s country of residence or place of business. This is the case even if the automatic downloading needs to be specifically adapted to the customer’s system.[62] Admittedly, the seller had to adapt the individual customer computer so it can be connected to the online service, but it provides this service over the internet, that is, from its own place of business. The situation here is therefore no different from the situation in other cases where an enterprise provides individual services at the request of a specific customer. The basic principle of choice of the law of the seller’s place of business therefore remains here as well.
Where the Rome Convention refers to the law of the seller’s place of business, therefore, the result coincides with the principle of the country of origin in the E-Commerce Act, which applies to transactions inside the EEA.[63] Unlike Article 4 of the Rome Convention, the principle of the country of origin of the ECG is not a connection to the rebuttable presumption of closest connection, but a strict reference to the law of the country of origin, which is applicable even if the particular circumstances of the transaction indicate a closer connection to another country. This is because s 20 of the ECG has no escape clause comparable with Article 4(5) of the Rome Convention.[64]
In conclusion to the investigation above, it can be stated that: in the business-tobusiness context, where there is no agreement to the contrary between the parties, it is the courts at the place of business of the internet seller that normally have jurisdiction over any litigation. In substance too, the dispute is decided under the law at the seller’s place of business. However, this only applies when substantive uniform law, such as the UN Convention on Contracts for the International Sale of Goods, does not displace it in advance, removing the need for a connecting factor under conflict of laws provisions.
In contrast to business persons, the situation is different when a private consumer uses the internet as a medium, given that consumers cannot automatically be expected to conduct legal proceedings abroad. Furthermore, the application of foreign law occasionally appears problematic regarding consumer contracts. At least in the European context, such contracts are subject to special provisions which grant the consumer a special jurisdiction in the country of his or her residence[65] and, with regard to substantive law, declare that the law of his or her normal residence applies.66 Unlike the objective connecting factor under the Rome Convention, which also applies in relationships to non-member states, the consumer’s forum of the European jurisdiction provisions applies only if the enterprise has its place of business in an EU or EFTA country, or at least has an agency or branch there.[67]
Autonomous Austrian law, which governs the international jurisdiction of disputes with enterprises from non-member states, has no comparable consumer jurisdiction.[68] At first glance, this appears to be a serious gap in legal protection. However, if one considers that a judgment obtained in the consumer’s country may possibly be unenforceable in the enterprise’s country for lack of an enforcement convention, this puts the deficiency into perspective. In the following, it will be considered how far the provisions of private international law and international procedural law can be relied on for internet transactions.
Both the consumer jurisdiction and the special conflict rule for consumer matters presuppose a contract entered into by a person for a purpose that cannot be attributed to its professional or commercial activities. In order to assume that a consumer contract exists, therefore, the performance under the contract must serve private purposes of the consumer.[69] This is not decided solely by the intention of the consumer. Instead, the specific circumstances are important for consideration, in particular, the private purpose must be recognisable to the other party to the contract.[70] If the enterprise cannot recognise that the buyer’s intention is to use the performance only privately, then there is no consumer contract in the legal sense. An enterprise that clearly directs its website only towards commercial customers need therefore not defend itself against any accusations that it fails to uphold consumer protection provisions, even if in the last instance a customer uses its performance for the customer’s private purposes.
Not all contracts that are entered into for private purposes justify special treatment in jurisdiction and applicable law. Under the European Brussels Convention/Lugano Convention and the Rome Convention, this applies to contracts in connection with internet transactions, which relate to the performance of a service or the delivery of movable property. This is the case provided that the making of the contract in the consumer’s country was preceded by an express invitation or advertising by the enterprise and that the consumer undertook the legal acts necessary to enter into the contract in this same country.[71] Under these provisions the consumer protection, with regard to the provisions of jurisdiction and conflict of laws, benefits only what is known as the ‘passive’ consumer, who
is addressed by an enterprise or the advertising of that enterprise in his or her home country and thus enters into a contract, without going to a foreign country to enter into the contract. The courts of such a passive consumer’s own country have jurisdiction in this case, and therefore must apply the law of the consumer’s own country.
The terms ‘invitation’ and ‘advertising’ respectively refer not only to binding offers to enter into a contract and invitations to treat, but in general to all acts promoting sales made by the seller in the consumer’s country,[72] including setting up a website that can be accessed from the consumer’s country, with information on the enterprise and the products on offer. A consumer surfing the internet will typically travel the world only virtually, that is, he or she will make a contract declaration (an offer or acceptance) online from a computer at home,[73] and therefore all the elements of the European Conventions are similarly satisfied in internet transactions.
However, the revised text of the Brussels Convention in the form of the Brussels I Regulation does now have slightly altered elements, specifically relevant with regard to internet technology. It is in fact quite clear that the internet, by its nature, is not merely ubiquitous, present everywhere, but also aterritorial, that is, not specially established in one particular country. The distinction between ‘active’ and ‘passive’ consumers is therefore not really appropriate in the case of internet transactions.
For the area of application of the Brussels I Regulation, there is a consumer contract that gives rise to jurisdiction at the consumer’s residence if the enterprise exercises professional or commercial activities in the consumer’s country of residence or at least directs such activities in some way to this country (or to more than one country, including the consumer’s country) and the contract is within the scope of these activities.[74]
If one compares the wording of the European Conventions - the Brussels Convention, Lugano Convention, but also the Rome Convention - with the text of the new regulation, the first striking point is that two requirements have been omitted without replacement: first, the restriction to contracts whose subject is providing a service or delivering movable property; and, secondly, the requirement that the consumer must have undertaken the legal acts necessary to enter into the contract in his or her home country, that is, that the consumer must have made a contract declaration in his or her home country.
These extensions of the area of application were made specifically in view of the new technologies. It is true that the requirement that the contract declaration be made in the consumer’s home country is normally fulfilled without difficulty in the case of internet contracts, for a consumer surfing the internet will typically travel the world only virtually, making contract declarations online from a computer at home.[75] However, in times of increasing personal mobility, there are more and more often situations in which the consumer makes the contract declaration while travelling, for example from his or her laptop computer, when the consumer is not in the home country at the time of making the relevant legal act, nor in the seller’s country, but in a different country. Such situations, without justification, escape the consumer protection of the European Conventions, which make no difference with regard to the need for consumer protection, whether the consumer is at home or travelling in countries outside Europe. Admittedly, the broad wording of the text of the new regulation extends its protection to all contracts, without a geographical restriction, including contracts entered into in the seller’s country, thus protecting the ‘active’ consumer. The criticism based on this[76] must, however, be rebutted with the fact that on the internet it is sometimes difficult or even impossible to determine the place from where the consumer has made its legal acts relevant to entering into the contract, with the result that these acts are not capable of creating a connection between the contract and the consumer’s country. Article 15(1)(c) of the Brussels Regulation rightly uses, as a sole basis, the directing of the enterprise’s activities to the consumer’s country.[77]
The second extension of the text of the regulation relates to the types of contract covered by consumer protection. Under the Brussels Convention, the Lugano Convention and the Rome Convention, if the types of contracts covered are only contracts for the performance of services and contracts for the delivery of movable property, then this restriction has now been removed in the Regulation, allowing any type of contract entered into to give rise to a consumer jurisdiction, as long as the further elements discussed below are present. This extension appears advisable, above all, in regard to the various opinions on the legal classification of online deliveries. In saying this, the only point on which there is agreement relates to standardised online deliveries, such as the delivery of standard software and the confirmed view today is that these constitute movable property.[78] On the other hand, in the case of individualised online deliveries that have to be specially adapted to the needs and circumstances of the customer, it is heatedly disputed whether these are property. They are generally regarded as not being property in the case of what is known as information downloading, that is, making use of online information which can be used even without being stored on a hard disk.[79] Of course, those who are not prepared to classify online services, that are not embodied in a concrete form, as movable property ought to consider subsuming them under the category of services, and in this way the European consumer protection provisions would nevertheless apply.[80] The new regulation, with its deliberately broad wording, rightly avoids all these points of dispute, particularly since the consumer seems no less worthy of protection in the case of individualised services or supply of information over the internet.
However, I turn now to the real core of the European consumer protection provisions, ‘directing professional or commercial activities’ to the consumer’s country or,[81] as the Brussels Convention, the Lugano Convention and the Rome Convention put it, the requirement of an ‘invitation’ or ‘advertising’, which must have preceded the conclusion of the contract in the consumer’s country. Just as running a website with information on the enterprise and the products on offer is an ‘invitation’ or ‘advertising’, in the meaning of European Conventions, so too does it also constitute the element of ‘directing professional or commercial activities’ at the consumer’s country.
Websites on the internet can be accessed globally and therefore an internet seller, on an objective reading of the above provisions, does indeed offer its goods for sale and advertise them all over the world,[82] or in the last instance directs its commercial activities to all states in the world in which its website can be accessed. By reason of this omnipresence of the World Wide Web, the internet seller is confronted with an incalculable multitude of consumer jurisdictions and consumer legal systems. Nevertheless, many enterprises use the internet precisely because it is global, in order to increase their customers, both internationally and at home. This raises the question as to whether, in view of the technologically unrestricted scope of internet offers and advertisements, it is in fact to be assumed the enterprises that use the World Wide Web within the area of application of the above jurisdiction and conflict of laws provisions are obliged to accept every court location and comply with all consumer legal systems? Before I return to this question, I would like to deal with the possibility of agreements between the parties. Indeed, if the parties could freely exclude the above consumer protection provisions relating to jurisdiction and applicable law, this would considerably modify the problems indicated.
The European international civil procedure law, however, regards as inadmissible agreements on jurisdiction that, before legal proceedings are commenced, exclude a jurisdiction that exists to protect the consumer.83 Autonomous Austrian law also places restrictions on choice of forum agreements for actions against consumers whose residential or habitual residence is in Austria or who are employed in Austria. In these cases, a choice of forum agreement is admissible only to the extent that the jurisdiction agreed on is one in which the consumer has his or her residential or habitual residence or pursues his or her employment.[84]
As with choice of forum agreements, choice-of-law clauses to protect the consumer are not admissible without restriction. A choice of law may not lead to a situation where mandatory legal provisions, at the habitual residence of the consumer, are excluded to the consumer’s detriment.85 Furthermore, the choice of the law of a country that is not in the EEA is to be disregarded if this law, in a number of points specifically laid down, is more disadvantageous to the consumer than the law of a country in the EEA that would apply were it not for the choice of law (Austrian Consumer Protection Act, Konsumentenschutsgesets, KSchG).[86] Finally, the Austrian provisions on the admissibility of particular contract clauses, above all those in general terms of business,[87] apply as statutory requirements for intervention, notwithstanding the law otherwise invoked, if the contract arose in connection with an activity of the seller that was exercised in Austria and directed towards entering into such contracts.[88]
As an intermediate conclusion, it can thus be stated that neither a choice of forum agreement nor a choice of law give the seller a sufficient possibility to escape the consumer protection provisions under private international law and international procedural law. For international jurisdiction and the applicable law, therefore, the key question remains: in what states does the internet seller advertise, or to what states does it direct its commercial activities? Consumer protection, that is, jurisdiction in the consumer country and the application of the consumer’s legal system, depends on the answer to this question. Before I turn to this question in the European context, it is useful to take a look at US law, particularly since the wording of the Brussels I Regulation was specifically chosen on the basis of US law.
Under US law, natural or juristic persons who are outside the territory of the forum state may be sued in the courts of a US state if in the individual case there are specific minimum contacts between these persons and the forum state, this is called personal jurisdiction.[89] Such minimum contacts to the forum state are necessary in order that the jurisdiction of the court appears reasonable in view of the constitutional requirement of due process, that is, in view of fair proceedings. These rules are laid down in many US states as long-arm statutes, but over the years they have become more specifically defined and further developed by way of case law.[90]
Thus the Supreme Court, in the well known decision Worldwide Volkswagen Corporation v Woodson, stated with regard to personal jurisdiction that acts give rise to jurisdiction above all if their object is ‘purposeful commercial activities in the forum state’.[91] This decision was the starting point for the varied US case law on electronic commerce, which admittedly is not quite uniform but nevertheless allows[92] general tendencies to be identified.[93]
At first the American courts were liberal in granting jurisdiction where there was an internet presence in the forum state,[94] however they have now changed their approach and examine very strictly whether the defendant had directed its commercial activities to a particular extent at the forum state.[95] Above all, a distinction is made between purely passive websites and interactive websites.[96] Whereas the seller with a purely passive website is not normally exercising any business activities that are directed at specific individual states,[97] running an interactive website, above all combined with the exchange of goods or other digital services, may very well give rise to jurisdiction in those states where the website can be accessed.[98]
In specific cases, however, the courts take a very cause-based approach. The acceptance of orders,[99] the shipping of software packages100 or passwords,[101] but also communication by email102 have all been regarded as sufficient connecting factors to create jurisdiction. On the other hand, the opinion in the US is increasingly that the fact that a website is interactive is not in itself enough to create jurisdiction in a specific state; rather it is necessary, in addition, for inhabitants of this state actually to use the website.[103] To this effect, for example, a court in Virginia held that it did not have jurisdiction for a lack of special relations of the defendant to the forum state, although the defendant had a website with contact information, such as a toll-free 1-800 telephone number, a commentary section, a hyperlink for direct email and an interactive form for any orders.[104]
It is striking that the American approach does not distinguish between consumer contracts and other transactions when determining jurisdiction. On the contrary, the general practice today is extremely restrictive. US courts are less and less willing to accept jurisdiction merely on the basis of a website that is accessible in the forum state. What is increasingly important is whether the defendant had particularly directed its business activities to the forum state. This is considered the case if the website has a certain amount of interactiveness. While contact information and hyperlinks alone probably are not sufficient to establish jurisdiction in a consumer state, address and order forms that can be filled out are far more likely to do so, above all if the seller does in fact supply the orders. A European internet seller that sells its products in the USA by way of a website with interactive elements must therefore certainly expect a US court to be granted jurisdiction.[105]
In order to exclude the remaining risk of being sued in foreign countries, US law does permit the internet seller to avoid foreign jurisdiction in advance by entering into a choice of forum agreement.[106] This possibility of agreeing freely in advance on the international jurisdiction for any disputes is in principle also available in the business-to-consumer context in the US, that is, in the case of transactions with consumers. This is an attitude that is completely at odds with European consumer protection.
However, US law does recognise limits to the admissibility of choice of forum agreements, and these apply above all in the consumer context. Thus, choice of forum agreements are regarded as invalid if they violate the constitutional
concepts of fairness and notice.[107] This has been assumed above all where the balance of power between the parties is unequal or the agreement is unjustifiably disadvantageous to a party in another way, in particular if the agreement de facto deprives a party of the possibility of asserting its claims in court[108] However, this is subject to the strict requirement that the party must prove that the agreed forum is indeed unacceptable.109 When weighing the various interests, the US courts also take into account the procedural certainty of the law that normally accompanies choice of forum agreements and, above all the interest of sellers in a uniform jurisdiction for all disputes arising from their business activities and the associated saving of costs, which also benefits customers in the shape of lower prices.110
There are indeed considerable differences in opinion between the USA and Europe, specifically in the law of jurisdiction and enforcement. These were in part responsible for work coming to a stop on the planned global Hague Convention on Jurisdiction and Recognition and Enforcement of Foreign Judgments in Civil and Commercial Matters.[111] The discussion was particularly heated when it came to the question of an exclusive consumer jurisdiction in internet contracts, as is provided by Article 7 of the draft Hague Convention,[112] following the Brussels Convention and the Brussels I Regulation.[113]
In order to bring the different viewpoints closer together, there has recently been talk in Europe of permitting choice of forum agreements in consumer contracts. For, so the argument goes, what is the use to the consumer of convenient proceedings in the consumer’s home country if he or she, in the absence of a relevant convention, cannot enforce a judgment in his or her favour against the seller with a place of business outside the EEA? Moreover, a mature consumer is said to be adequately protected against thoughtless statements, provided the permission for choice of forum agreements is subjected to strict formal requirements. In particular, the consumer is required to make a separate declaration expressly accepting the jurisdiction outside the state of his or her domicile.[114] For example, the consumer might be required to enter a preformulated clause manually into a particular text field.115
However, this argument must be countered with the fact that a consumer who wants to take advantage of an enticing offer on the internet will accept every choice of forum clause without reservation, regardless of the formal requirements. The consumer will simply not expect ever to need to take legal action with regard to this purchase because the seller offers the consumer a faultless, high-quality product. As in every form of advertising, website offers suggest only the best, and therefore even strict formal requirements are not sufficient to protect the consumer effectively against a hasty choice of forum agreement. However, the consequence of a validly agreed choice of forum clause would be that in the case of dispute the consumer would have to take legal proceedings at a foreign court, a fact that in practice normally presents an insurmountable obstacle on account of the associated costs and effort. In the last instance, therefore, choice of forum agreements would often lead to a situation where the consumer would lose all legal protection.
If, on the other hand, we consider the position of the seller, it is one of its typical tasks to weigh up the cost and benefit of opening up new markets. However, this also includes carefully considering the legal circumstances of the sales area in question. If the seller has the impression that a foreign judicial and legal system is not trustworthy enough, it will have to avoid transactions with consumers in that country. However, if the profit attainable from deliveries to this area proves to be greater than the associated risk, the seller will and can become involved in transactions in such areas. This very cost-benefit analysis, however, is typical of enterprises and should therefore not be taken away from the internet seller who consciously makes use of the most cost-effective sales possibilities of the new medium.
In Europe, therefore, we would be well advised to hold on to our previous consumer protection, even if the provisions are different in the US. The enforcement problems mentioned would have to be overcome by alternative methods of resolving conflicts, which I will discuss below.
As with jurisdiction, the law applicable to the case can also be freely agreed in the US. This also applies to electronic legal relations. In the exchange of information and software, this is expressly codified in the Uniform Computer Information Transactions Act[116] (UCITA).117 However, in the business-to-consumer context
such a choice of law cannot be enforced to the extent that it would violate mandatory law of the legal system that would apply, if there had been no choice of forum agreement.[118]
If there is no choice of law, this Act provides that, in the case of online deliveries, the law to be applied is that of the state in which the seller had its place of business at the date when the contract was entered into.119 A consumer contract for the delivery of a physical data medium, on the other hand, is subject to the law of the state in which the goods were delivered to the consumer or should have been delivered to the consumer.[120] In all other cases, the governing law is that of the state with which the contract has the closest connection.[121] The individual circumstances of the conclusion of the contract, such as the location of the contract negotiations or the conclusion or performance of the contract and the domicile or place of business of the parties, play an important role.[122] Where these provisions result in the application of foreign law, however, it is applied only if the degree of protection is substantively equal to that of US law to the person, not resident, or having a place of business in the territory of this foreign law.[123]
Therefore, unlike choice of forum agreements, choice of law clauses are subject to a certain degree of consumer protection even under US law, at least where the exchange of information and software is concerned. In the case of the above business-to-consumer transactions, although choice of law is in fact possible, it is restricted by the priority of the mandatory provisions of the legal system objectively invoked. The latter is, at all events in contracts relating to physical data media, the legal system in the consumer’s domicile.
Following this excursion into US law, if we return to the question of where the internet seller advertises, this being the element relied on by the European Conventions,[124] or to what states the internet seller directs its business activities, as in the Brussels I Regulation,[125] then it can be established that in Europe there are also endeavours legally to restrict the scope of internet activity. This in itself is technically unrestricted, in order to protect internet sellers from an unmanageable multitude of consumer jurisdictions and consumer legal systems.126
In the literature, the argument is frequently encountered that often the mere design of a website, such as the language used and the nature of the product offered for sale, support the assumption that the offer is intended only for a restricted group and therefore the elements of European consumer protection with regard to jurisdiction and applicable law are satisfied only for the states so intended.[127]
The following case serves as an example.[128] A German holidaymaker who speaks Portuguese buys a Portuguese domestic train ticket over the internet for his next visit to Portugal by filling out a web form in Portuguese. From a technical point of view it is clear that the Portuguese seller must expect its details to become known in Germany too, but the law provides that this is not enough to satisfy the element of prior advertising in the consumer’s home state (in the meaning of the Brussels Convention, the Lugano Convention and the Rome Convention) or of directing business activities (in the meaning of the Brussels Regulation). The German customer, in such a case, is therefore not able to rely on jurisdiction in Germany, nor on German consumer law, if something is not in order with regard to the purchased ticket. The Portuguese-language advertising for transport services to be rendered only in Portugal, it is argued, is directed clearly only to interested persons who are actually in Portugal.
Much as I agree that the technically universal scope of websites may be regionally restricted, I do equally disagree with the suggested solution, which assumes in advance, on the basis of language and subject of a contract made through a website alone, that there is a particular limited number of addressees. In our global communication and information society, cases are scarcely conceivable in which only a restricted circle of persons is to be addressed solely on the basis of language and subject of contract. The example given also shows this very clearly; there may be many people outside Portugal who speak Portuguese and can be addressed by Portuguese websites. In addition, the subject of the contract, a train ticket for a journey inside Portugal, may be of interest to a number of people outside Portugal. Why should one not save the costs of travel agents and book one’s next holiday trip via the internet? At a time when, thanks to modern means of transport, it is possible to reach foreign countries and cultures easily, such services intended for a particular area may be of interest to everyone, no matter where they usually live. This applies both to Portuguese train tickets and to Austrian ski boots that are ordered via the internet by a purchaser who lives in the tropics.[129]
Thus, it is unanimously accepted that when a seller deliberately seeks contact with foreign customers, it will be held that the seller is also advertising for this purpose in the states in question.[130] If, for example, tickets for the Salzburg Festival are offered over the internet, it is plain that such an offer is directed to all those interested, irrespective of their normal residence and their nationality, even if the offer is in German and the performances can be attended only in Salzburg. However, how is this example to be distinguished from that of the Portuguese railway? How is a consumer to know whether the internet seller only wants to address customers in a particular region or also other interested persons? The Portuguese railway may perhaps be offering the tickets in Portuguese only because it has no translator and has therefore not yet had a German or English version of its website prepared. How are we to decide if the railway route is a popular tourist attraction? May a potential holidaymaker then not assume that the Portuguese railway company also wants to sell tickets to him?
Indeed, in our society no item that is the subject of a contract can be found that justifies a legal assumption that the group of persons addressed is restricted in advance.[131] The same applies to the remainder of the design of a website, above all for the language used, but also the currency listed there, for with the payment methods customary on the internet debts in foreign currency can be paid without difficulty. I therefore take the view that the technically universal scope of the internet in principle also entails universal legal consequences with regard to jurisdiction and applicable law.
The view I express above that rejects a presumed restriction of the scope of internet sites on the basis of criteria regarding content, such as language, currency or subject of contract, is confirmed by a the Joint Declaration of the Council and the Commission of the EU on Article 15 of the Brussels Regulation.[132] Supporting the promotion of electronic commerce, which is recognised as serving economic growth, the Council and the Commission emphasise that only particular interactive websites give rise to the use of the consumer’s jurisdiction. At the same time they expressly point out that the language used in a website or the currency quoted are not significant in this context. From this point of view, the accessibility of a website alone does not constitute directing business activities to particular consumer states. Instead, it is necessary that the ‘website also invites [the consumer] to enter into a distance sales contract’, that is, that it is an interactive website and that ‘such a distance sales contract has in fact been entered into, by whatever means’[133] , for example using a telephone number given on the website.
This restrictive interpretation of directing business activities at the consumer’s state sufficiently defines the scope of internet activities in the business-toconsumer context. There is no need for a further restriction of the group of persons addressed by way of language, currency or subject of the contract, even from the declared intention of the European legislator.134 This interpretation of Article 15(1)(c) of the Brussels Regulation must, in my opinion, also have an effect on the interpretation of the relevant consumer protection provisions in the Brussels Convention, the Lugano Convention and the Rome Convention.[135] As for the Rome Convention, in the course of the planned revision, which will also put the European conflict of laws provisions into the form of a Regulation, the wording of the special conflict of laws provision (at present Article 5 of the Rome Convention) will be adapted to the wording of Article 15 of the Brussels Regulation.[136]
Notwithstanding this, the entrepreneur is at liberty expressly to restrict the regional scope of its interactive web pages if it wishes to address only a specific group of consumers with its products. For example, it can make remarks such as ‘this offer applies only for Austria and Germany’ or ‘no delivery outside the EEA’ and thus easily restrict the territorial application of its website and thus avoid undesired jurisdictions and unknown law.[137] However, if the seller fails to do so or does not do it in a way that is recognisable to the customer, then its interactive website will have universal validity. An entrepreneur who places advertisements or invitations on the World Wide Web knows that these can be accessed all over the world. Often, it will actually want to reach potential customers all over the world; at least it willingly accepts this possibility. So those who use such a universal medium must in principle permit the whole of the area of dissemination of this medium to be seen as the location of their sales activities in the meaning of Article 15(1)(c) of theBrussels Regulation, Article 13(1)(3) of the Brussels Convention and the Lugano Convention and Article 5(2) Alternative 1 of the Rome Convention.[138]
It is therefore incumbent on the internet seller to prove in the proceedings that it did not advertise to a particular state and that this was recognisable to the consumer, for example because of a sales restriction. However, even if the seller can rely on such a restrictive statement on its website, the consumer is at liberty, for example as part of evidence in rebuttal, to submit that the seller, despite its verbal restrictions, has already entered into contracts with other customers in the consumer’s state. In these circumstances a mere rhetorical restriction would appear to be an invalid protest that is at variance with the facts (protestatio facto contraria).[139] However, the consumer need not provide full evidence of the contracts he or she claims were entered into; he or she need only arouse doubts in the judge as to the restricted application of the website. It is then the task of the seller to prove that it did actually comply with the postulated sales restrictions. If this is not successful any remaining doubts as to the scope of the seller’s internet activities will be held against the seller. In order to avoid such difficulties in evidence, the internet seller should be advised to ask its customers where they are domiciled before it enters into any contract,[140] for example by use of a form integrated in the website.[141] If, however, it happens that a customer deceives the seller as to the customer’s true residence, this may not be permitted to work to the detriment of the seller, since such conduct is outside the seller’s control.[142]
In summary, it can therefore be established that the technically universal scope of the internet in the business-to-consumer context also has universal legal consequences with regard to jurisdiction and applicable law. Exceptions to the global reach of an interactive website must be proved by the seller and the organisation of the internet activities lies in the seller’s sphere of influence. The burden of proof is therefore borne by the person in whose sphere the evidence is and who is therefore in a position to give evidence.
In the following I will investigate how far the legal universality of the internet in the law of international consumer contracts described above also shapes international competition law. One of the topics here is that of Austrian sellers whose internet activities violate foreign competition law; the other is foreign sellers who come into competition with Austrian sellers in Austria. These foreign competitions normally fulfil the legal requirements of their country of origin, but frequently they violate stricter competition provisions in Austria.
In such a situation, the question arises whether the Austrian competitors and customers involved have the possibility of a jurisdiction in Austria where they can take legal action against the foreign entrepreneur. In addition, the question arises as to what legal system governs any claims to damages or for an injunction under competition law, that is, whether Austrian or foreign competition law will be applied to substantive questions. If one considers that the substantive law of fair trading protects not only competitors acting in a market, but also customers and consumers against unfair practices of individual sellers, then the questions as to international jurisdiction and the applicable law are particularly important, just as they are in international consumer contract law.
Under European jurisdiction law, a person with a seat or residence in an EU member country may, in the case of a delict or quasi-delict which includes violations of competition law, be sued before the court of the place where the harmful event occurred.[143] For proceedings based on unfair competition on the internet this wording creates a practically universal jurisdiction for all courts in whose area of jurisdiction the unlawful website can be accessed. In this connection the term ‘flying’ jurisdiction of the place of effect is used.[144]
This universal reach of the internet is new, even if the problem that there may be a discrepancy between technical reach and addressees for whom it is intended also arises in a rudimentary form in the case of traditional media.[145] In connection with the use of publications, the Court of Justice of the European Community held that there was a jurisdiction under Article 5(3) of the Brussels Convention in the state in which the publication was distributed in accordance with its intended use and not merely by chance.[146] As a result, those states in which the individual printed works arrive completely unpredictably, for example because they are brought by holidaymakers, are excluded as a location for the proceedings. However, it is enough to establish dissemination in accordance with intended use if the publication reaches a place where the publisher must expect it to be distributed.[147] The same applies to acts of infringement via television. When the seller knows how far the broadcasts are transmitted, it can also be presumed that the products were distributed in accordance with their intended use in the broadcasting areas involved.[148] The internet now extends the technical possibilities to a universal reach. A seller who uses the World Wide Web must expect its websites to be seen in every state in the world. In consequence, therefore, there is jurisdiction for competition matters in every state where the offending web page can be called up.
The same also applies under autonomous Austrian law. Section 83c(3) of the JN makes the international jurisdiction of Austrian courts available for all competition-law actions relating to a statement published via internet in Austria. If an anti-competitive practice ‘is effected by the contents of writings or printed works or by other items that are sent from abroad to Austria, then for purposes of jurisdiction every place in Austria where the item arrived or was delivered or distributed shall be deemed the place where the tort was committed’. Here too, the defendant’s mere knowledge of the distribution in Austria is sufficient to create jurisdiction under s 83c(3) of the JN.[149]
However, the literature requires further elements creating jurisdiction apart from the possibility of the offending web page being called up in Austria: for example, it must be recognisable that the anti-competitive behaviour was directed at and influenced one or more particular national markets. In this case, jurisdiction is created no longer by the act, but by the location of the market, which also serves as a connecting factor for applicable law in other connections.[150]
To the extent, therefore, that sellers or customers feel they have been harmed by websites of foreign competitors, specifically including those outside Europe, that can be called up in Austria, they may assert their claims before Austrian courts under the law of fair trading under Article 5(3) of the Brussels Regulation or Article 5(3) of the Brussels Convention/Lugano Convention or s 83(3) of the JN.
The competent court must examine, under its private international law, what competition law it is to apply in the matter. As in the international jurisdiction law, the Austrian private international law bases its decision on the place of effect or, to put it more precisely, on the place ‘on whose market the competition takes effect’.[151] Claims based on competitive behaviour in relation to a market[152] are therefore governed by the legal system of the place where the market is located. This marketplace rule or principle of effect is followed by Austria and Germany,[153] and also by most of the other European states154 and the unofficial draft of an EU Regulation on the Law Applicable to Non-Contractual Obligations, known as the Rome II Regulation.[155]
The prerequisite for the application of the marketplace law is that the competitive behaviour is capable of ‘perceptibly’ disadvantaging the interests of the competitors, customers and consumers in a particular national market.[156] Consequently, it is the only place where the competitive struggle for customers and market shares actually takes place that are sufficiently suited to make their
competition law, and according to some also their courts,157 available for competition law disputes.[158] Evidence that electronic competitive practices are directed at and influence particular markets include for example, as in international consumer contract law, the language used, payment and shipping arrangements, the scope of the products on sale and log files.[159]
However, in e-commerce, as set out above in connection with international consumer contract law, it is often impossible to determine a particular market to which the marketing is directed, and therefore the seller is normally confronted by a multitude of applicable competition laws with dauntingly diverse legal consequences.[160] In order to advertise its products on the internet with a good conscience despite this, the seller must review all potentially affected competition law systems and as a result base its conduct on the strictest law in each case.[161] In particular for small enterprises, therefore, an internet presence entails high costs and considerable risk.
Admittedly, an internet seller can adapt its competitive behaviour by region by making appropriate restrictions on sale and delivery and in this way, as in international consumer contract law, avoid undesired jurisdictions and undesired law.[162] From the point of view of fair trading law too, the internet seller should therefore be advised to ask its customers interactively where their domicile is,[163] and enter into no contracts with customers from undesired states.[164]
Above all in the case of online deliveries, however, as set out above, the seller is not protected against its customers obtaining goods or services surreptitiously by making false statements in relation to their domicile. Since internet sellers have no influence over statements made by their customers, such contracts entered into on false pretences cannot be allowed to work to the detriment of the seller from the point of view of either jurisdiction or conflict of laws: individual business contracts which the seller has tried to prevent by the use of reasonable means can therefore have no relevant market effect.[165]
Although the possibility of controlling the internet seller ’s competitive behaviour by region is certainly not too arduous for the seller, the marketplace rule is often attacked as anti-seller. In particular on the internet, it is said to prevent cross-border offers and thus to stop a global internet market coming into being.[166] In addition, it is said that where offers are made in several countries, this normally leads to an inadmissible restriction of fundamental rights in the EU single market.167
It is quite in the interests of business, therefore, that the E-Commerce Directive, and the E-Commerce Act which was passed to implement it, break open the marketplace rule in the European single market: where sellers active online have their place of business in a state in the EEA, their competitive practices in markets in the EEA are subject to the law of their place of establishment.[168]
This principle of the country of origin makes the situation easier for EEA sellers in contrast to the marketplace rule that would otherwise apply, but it disadvantages competitors and consumers who will often find it difficult to determine that seller’s place of business and, even if they succeed in doing so, have difficulty estimating what claims they have under foreign law.[169] In addition, the principle of the country of origin leads to distortions of competition: it clearly favours sellers in member states with a lenient competition law, while those in states with a strict law, which includes Austria, are at a disadvantage. Such states with a strict competition law therefore become increasingly unattractive as a location for industry. However, in order to prevent an exodus of enterprises to countries with a more lenient law, these states will have a tendency to adjust their legal systems in the direction of the more lenient competition laws: what is known as a race to the bottom is inevitable.[170]
Apart from this, it cannot be justified that violations of competition via the internet should have a special privileged position in contrast to other multinational competitive practices. The associated disregard of consumer protection in electronic competition stands in contrast to the previous consumer policy of the EU and is also suspected of being in violation of equality of opportunity.[171] While the EU Council and Commission state quite clearly in the Brussels I Convention that internet contracts also enjoy full consumer protection,[172] the interests of the consumers using the internet are largely neglected in international competition law.173
In addition, the introduction of the principle of the country of origin by the E-Commerce Directive is criticised for a number of other reasons:174 in view of the
starkly diverging national protection standards in substantive fair trading law, the country of the marketplace cannot be expected to recognise foreign law. The conflict of laws principle of the country of origin also makes it harder to enforce rights, because the competent court in the place of effect or the marketplace is obliged to apply foreign law. Finally, the E-Commerce Directive principle of the country of origin leads to a multiple fragmentation of law: for the question of applicable law it is necessary to distinguish not only between e-commerce and conventional transactions, but also between facts in the EEA and facts in other countries. Even within the EEA, electronic commerce is subject to the country of origin principle only in specific areas of law, for example fair trading law and other tort law, but not, for example, with regard to product liability, the violation of industrial property rights or of copyright; the situation therefore remains that a large number of legal systems are applicable.
The dispute between country of origin principle and marketplace rule, which is also pursued vehemently within the EU Commission,[175] should from the point of view of future statute law be given a uniform comprehensive solution covering all multinational conduct and the whole of tort law. The final version of the planned Rome II Regulation on the international law applicable to non-contractual obligations, known as the Rome II Regulation, is therefore awaiting with excitement.[176]
In addition, there is a need for action on the level of substantive law.[177] At least inside the EEA, the protection standards under fair trading law should be harmonised as far as possible;[178] here, care should be taken to ensure that the uniform level of protection to be achieved is appreciably higher than the present minimum protection. Only subject to this condition could the principle of the country of origin be accepted in fair trading law at all.[179]
If, in summary, we compare the US and European legal position with regard to jurisdiction for internet contracts, then at first glance they are not very different. In the US, the element especially relied on is ‘directing’ business activities to the state where the court is located, a formulation that is included in the new Brussels I Regulation. However, on closer investigation it becomes clear that the courts in the US, when they examine personal jurisdiction, do not distinguish between consumer contracts and other transactions. In Europe a jurisdiction arises in the internet user’s state of domicile only if the user enters into the contract for private purposes, that is, as a consumer. If this is not the case, the internet user may have to take legal action abroad and, in this case, it is normally foreign substantive law that applies.
The lack of consideration for consumers in the USA explains the different treatment of the elements of ‘directing’ business activities, an element that both systems share. While US case law links jurisdiction strictly to an accessible interactive website that has already been visited by more than one customer from the state where the court is located, the European Council and the European Commission favour a somewhat broader interpretation. For them, the requirement for a special consumer jurisdiction (and by analogy, for the application of the consumer’s law) is also the existence of an interactive web page, which invites the consumer to enter into a distance contract, but consumer protection will be given if even one such distance contract has been entered into, without any requirements for further customer contacts. Moreover, the contract need not even have been entered into via the internet; the use of any other distance selling medium named on the website is sufficient.
Some Austrian and German academics additionally attempt to restrict the universality of the internet presence of a seller by way of other content criteria, mainly regarding the language and subject of the web page used. This criterion, like the practice of the US courts, which is not uniform in practice, cannot be employed in a uniform way and thus leads to a fragmentation of law and legal uncertainty.[180]
An entrepreneur who benefits from the international marketing of its products must in principle also accept the risk of foreign proceedings based on foreign substantive law. If the entrepreneur does not want this, it can protect itself against the undesired legal consequences. This can be achieved by restricting the validity of its website by designing the website to make this restriction quite clear, for example, by stating express restrictions on delivery. However, if the internet seller does not take any such precautions, and if it accepts every order no matter where it comes from, then it is not unjust that it should be subjected to a foreign jurisdiction and the application of foreign law.
Unlike under international contract law, the consumer in internet matters enjoys general protection under international competition law only with regard to the jurisdiction. With regard to the applicable law, a distinction must be made as to whether the entrepreneur has its place of business in a state in the EEA or one outside it. Entrepreneurs in the EEA need not take any account of the competition law of the consumer’s state, that is, the marketplace law, their conduct will be judged, under the principle of the country of origin, exclusively on the basis of their own legal system. The situation is different when it comes to entrepreneurs from outside states. They must adapt their competitive conduct to the law of the marketplace involved. Thus, in the case of business activities on the internet, they are confronted by a large number of competition law systems. If, in such a situation, internet sellers do not want to adapt their competitive behaviour to satisfy the strictest legal system, then they are well advised to restrict their competition by region to avoid this. Only in this way can they avoid undesired law such as international consumer contract law and also undesired jurisdictions.
The introduction of the principle of the country of origin for particular aspects of electronic business dealings, even within the EEA, has led to an unjustifiable fragmentation of law which in future laws should be countered by a unified drafting of international tort law, including international competition law. In addition, the already visible beginnings of a substantive-law harmonisation of the various protection standards in fair trading law of the individual member states must be developed further, not least for reasons of consumer policy.
The real weak point of international consumer protection in internet matters, however, lies in the fact that it is usually necessary to enforce a judgment abroad. There are difficulties at the enforcement stage not only, as already mentioned, in relation to the US and other states outside Europe, but certainly also within Europe. The European law of jurisdiction and enforcement guarantees mutual recognition and enforcement of judgments from EU and EFTA states, but carrying out enforcement proceedings often fails because of the associated costs. In consumers matters the probable enforcement costs are often many times the actual value in dispute. This cost gap is particularly great in internet transactions, which make it possible to satisfy even small everyday needs by cross-border business. In order, therefore, to make consumer protection more effective, above all in internet transactions, the European Council has already considered providing for costs alleviation in the enforcement of disputed low value consumer matters.[181]
In addition, however, alternative methods of dispute resolution such as online mediation and online arbitration[182] should be developed further and in particular made available for fair trading disputes. In the law of fair trading, the parties do not have the kind of contractual relationship with each other that would suggest the agreement on a mediation and or arbitration clause at the date when they enter into the contract, but the parties here are also at liberty to agree on an extrajudicial form of dispute resolution at the time when the dispute occurs. In order to make such a step attractive, however, forms of dispute resolution proceedings
specially adapted for electronic competition disputes, online or using conventional procedures, must be established.[183]
An improvement in consumer protection is also made by the certification models of various providers, which are also voluntary. These encourage the enterprises registered with them to observe certain consumer protection standards and sanction disregard of these standards. Using such providers acts as a kind of stamp of quality for the internet seller that consumers can rely on.[184]
All these alternative methods of dispute resolution and dispute avoidance have in common the fact that they offer solutions that need no judicial enforcement; on the contrary, they are normally carried out voluntarily. It is therefore urgently necessary for the present beginnings in this area to be extended.[185] Only effective legal protection systems can strengthen the trust of market participants in the internet medium and thus do justice to the globally increasing significance of electronic commerce.
* Doctor Juris, LLM (Harvard), Vice-Dean and Professor of Law, Paris Lodron University Salzburg, Austria.
[2] Council Regulation (EC) 44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters, [2001] OJ L012.
[3] 1968 Brussels Convention on jurisdiction and the enforcement of judgments in civil and commercial matters, [1968] OJ C027, in Austria in force since 1 December 1998 as amended by the 4th treaty of accession, Federal Law Gazette (Bundesgesetzblatt, referred to below as BGBl) BGBl III 1998/167 (treaty of accession) and BGBl III 1998/209 (consolidated version).
[4] Preamble 21 and 22, Brussels Regulation.
[5] (Parallel) Convention on jurisdiction and the enforcement of judgments in civil and commercial matters, [1988] OJ L319, in Austria in force since 1 September 1996, BGBl 1996/448. On the differences between the Brussels Convention and the Lugano Convention, see Kohlegger, Ein Vergleich zwischen EuGVÜ und LGVÜ, ÖJZ 1999, 41 (41ff); Klauser,Abgrenzung und Unterschiede zwischen EuGVÜ und LGVÜ, ecolex 1999, 679 (679ff).
[6] Since the Erweiterte Wertgrenzennovelle 1997 (statute raising limits of value in dispute giving right to appeal), this has been the general opinion. Matscher, Die Neuregelung der inländischen Gerichtsbarkeit durch die WGN 1997, JBl 1998, 488; Simotta in Fasching, Kommentar zur ZPO, Band I2 (2000) § 83c JN marg no 38; Rechberger/Simotta, Zivilprozessrecht[5] (2000) marg no 64ff.
[7] On the existing draft of 30 October 1999, see Hague Conference on Private International Law, Preliminary Draft Convention on Jurisdiction and the Effects of Judgments in Civil and Commercial Matters, http://www.hcch.net/e/workprog/jdgm. html.
[8] In the first instance, therefore, it is intended that a convention restricted to certain central points will be drawn up. On this, see the working paper of August 2002, Preliminary Document No 19; http://www.hcch.net/e/workprog/jdgm. html.
[9] 1980 Rome Convention on the law applicable to contractual obligations, [1980] OJ C027, ABl 1998 Nr C 27, S 34 (re-announcement); in force in Austria since 1 December 1998, BGBl I 1999/18.
[10] Consumer contracts are expressly excluded from the principle of the country of origin (s 21 no 6 ECG). On the relevant provision of the Directive, see Article 3(3) in conjunction with the annex to the E-Commerce Directive.
[11] The decisive factor is that the entrepreneur has its place of establishment within the EEA and offers goods or services in another EEA country (ss 1(2), 3 no 7 in conjunction with s 20 ECG). See also Explanatory Notes to the Parliamentary Bill (Erläuternde Bemerkungen zur Regierungsvorlage, referred to below as EBzRV) (817 BlgNR XXI GP) on s 1 ECG point 2.
[12] Directive 2000/31/EC of the European Parliament and of the Council of 8 June 2000 on certain legal aspects of information society services, in particular electronic commerce, in the Internal Market (Directive on Electronic Commerce) [2000] OJ L178/1.
[13] On the view of these provisions as a conflict-of-laws rule, see the detailed account in Lurger/Vallant, Die österreichische Umsetzung des Herkunftslandprinzips der E-Commerce-Richtlinie, MMR 4/2002, 203 (207ff) with further references.
[14] Federal Act containing provisions on particular legal aspects of electronic commerce and legal transactions, BGBl I 2001/152.
[15] Articles 2 and 3 Brussels Regulation and Articles 2 and 3 Brussels Convention/Lugano Convention, sections §§ 66, 75 JN; Schauer, E-Commerce in der Europäischen Union (1999) 256; Köhler/Arndt, Recht des Internet2 (2000) 136; Härting, Internetrecht (1999) 39.
[16] Section 66(2) JN.
[17] Article5(1)1 Brussels Regulation, Article 5(1) Brussels Convention/Lugano Convention, s 88
JN.
[18] Section 88 (1) JN.
[19] Section 88 (2) JN, Jurisdiction of the invoice.
[20] For more detail see, for example, Mayr, in Rechberger, Kommentar zur ZPO2 (2000) § 88 JN
marg no 1, 5, 8 with further references.
[21] See s 41(2) JN. Cf OLG Innsbruck EvBl 1988/136.
[22] Section 88(1) last sentence JN.
[23] The concept of an ‘Urkunde’ does not require a signature by the declarant. See also EBzRV (1999 BlgNR XX GP) on s 4 SigG point 3. But cf AG Bonn 25 October 2001, JurPC Web-Dok 332/2002, http://www.jurpc.de/rechtspr/20020322.htm, which does not attach any probative value to the printing out of exchanged emails in view of the fact that the text of the emails may have been subsequently altered.
[24] OGH ZBl 1912/163, EvBl 1968/306 = JBl 1969, 563 (Matscher), SZ 47/146, RZ 1977/135, JUS Z/514 = RdW 1990, 408; OLG Innsbruck EvBl 1988/136 ua.
[25] In force since 1 January 2000, BGBl I 1999/190; implementation of Directive 1999/93/EC of the European Parliament and of the Council of 13 December 1999 on a Community framework for electronic signatures (Signature Directive), [2000] OJ L13/12.
[26] Mayer-Schönberger/Pilz/Reiser/Schmölzer, Signaturgesetz (1999) 10ff.
[27] EBzRV (1999 BlgNR XX GP) on s 4(3) SigG at the end. On this problem area in general seeKuhn, Rechtshandlungen mittels EDV und Telekommunikation (1991).
[28] EBzRV (1999 BlgNR XX GP) on s 4(3) SigG at the end. Menzel, Elektronische Signaturen (2000) 170.
[29] EBzRV (1999 BlgNR XX GP) on s 4(3) SigG; JAB (2065 BlgNR XX GP); Mayer-Schönberger/Pilz/Reiser/Schmölzer, Signaturgesetz (1999) 78. Cf, on the other hand, Menzel, Elektronische Signaturen (2000) 171ff, which proceeds from the basis that safe electronic signatures are only partly equivalent to signatures on private documents, since s 4(2) SigG expressly refers only to s 294 ZPO, but not in addition to s 312 ZPO. Here, however, Menzel proceeds on the incorrect assumption that s 312 ZPO - just like s 294 ZPO - contains a shifting of the burden of proof. But this is not the case: it is universally believed that s 312 ZPO does not contain a statutory presumption of genuineness, but restricts the court’s free assessment of evidence only to the extent that, if the opposing party does not challenge the genuineness of the document or of the signature thereon (under s 298(3) ZPO, the party opposing the party presenting evidence is called upon to make a statement), the court regards this failure to challenge as equivalent to admission. The court will then as a general rule have no further occasion to doubt the genuineness of the document (eg Rechberger in Rechberger, Kommentar zur ZPO [2000], § 312 ZPO marg no 1). But if, exceptionally, there are doubts, the court could certainly require the party submitting evidence - as part of the normal distribution of the burden of proof - to supply proof that the document or signature is genuine.
Even if, with Menzel, one assumes that s. 312 ZPO is not applicable to safely signed electronic documents, the allocation of the burden of proof with regard to the genuineness of the signature is no different from that in the case of signed private documents. The assessment of the genuineness of an electronic signature is then admitedly subject to the unrestricted free evaluation of evidence of the court. However, if the other party fails to contest the evidence, the court will in general have no reason to doubt its genuineness: it is precisely the characteristic of the safe electronic signature that it permits a reliable conclusion as to the signatory (see s 2(3) SigG; EBzRV [1999 BlgNR XX GP] on s 4 (3) and (4) SigG). However if in the individual case there are doubts as to the genuineness of the signature (for example, if there are indications that the signature creation data were compromised), then, as in the case of signed private documents, the usual rules as to burden of proof come into play.
The question as to whether s.312 ZPO applies (by analogy) to safely signed electronic documents, is not of great practical importance, in view of what has been said above. However, the history of the legislation indicates that there is an unintended gap in s 4(3) SigG, which states that only s 294 ZPO applies to safely signed electronic documents, but not s 312 ZPO. For the bill originally, in s 4(3) SigG, even contained a (rebuttable) presumption of the genuineness of safe electronic signatures. However, in the last instance, at the intervention of the Austrian Federal Supreme Court, this provision was omitted, in order that safe electronic signatures were not put in a better position than handwritten signatures (in the case of which there is no such presumption). But it was most certainly intended to put safely signed electronic documents on the same footing as signed private documents. (EBzRV [1999 BlgNR XX GP] on s 4(3) SigG). The unintended gap in the legislation must therefore be closed by way of analogy, as a result of which s 312 ZPO applies also to safely signed electronic documents.
[30] Note, however, Luxembourg’s reservation to the jurisdiction of the place of performance (Article I Additional Protocol to the Brussels convention and Article I Protocol no 1 to the Lugano Convention); the Swiss reservation to Article 5(1) Luxembourg Convention ended on 31 December 1999 (Article Ia Protocol no 1 to the Lugano Convention); Burgstaller/Ritzberger in Burgstaller, Internationales Zivilverfahrensrecht (2000) marg no 2.56; Geimer/Schütze Europäisches Zivilverfahrensrecht (1997) Article 5 marg no 100f.
[31] The mere abstract agreement on a ‘place of performance’, where there is no intention actually to perform, is not sufficient if this serves only to establish the place of jurisdiction. Instead, the agreed place of performance must have a connection to the reality of the contract, or else there is an inadmissible circumvention of Article 17 of the Brussels Convention; European Court of Justice 20.2. 1997, C-106/95 - Mainschifffahrts-Genossenschaft/Les Gravières Rhénanes - Slg 1997 I, 911 = EuZW 1997, 209; Czernich, DerErfüllungsgerichtsstand im Lugano-Übereinkommen, AnwBl 1996, 426 (427); Czernich/Tiefenthaler, Die Übereinkommen von Brüssel und Lugano (1997) Article 5 marg no 11; Burgstaller/Ritzberger in Burgstaller (fn 25) marg no 2.60.
[32] The place of performance is not therefore to be decided independently under the BrusselsConvention/Lugano Convention; Tiefenthaler, LGVÜ: Gerichtsstand am Erfüllungsort desBereicherungsanspruchs?, ÖJZ 1998, 544 (545); Czernich, Der Erfüllungsgerichtsstand imLugano Übereinkommen, AnwBl 1996, 426 (428); Burgstaller/Ritzberger in Burgstaller (fn 25) marg no 2.59f; Musger, Das Übereinkommen von Lugano: Internationales Zivilverfahrensrecht für den Europäischen Wirtschaftsraum, RZ 1993, 192 (195); but see Jayme in Gerichtshof der EG (ed), Internationale Zuständigkeit und Urteilsanerkennung in Europa (1993) 68; Schack, Internationales Zivilverfahrensrecht3 (2002), marg no 269ff with further references.
[33] Art 4 Rome Convention
[34] Czernich/Tiefenthaler, Die Übereinkommen von Brüssel und Lugano (1997) Article 5 marg no 17ff; Geimer/Schütze, Europäisches Zivilverfahrensrecht (1997) Article 5 marg no 91f; Rüßmann, Internationale Zuständigkeit für die Durchsetzung von Ansprüchen aus Geschäfts- und Wettbewerbshandlungen im Internet, JurPC Web-Dok 108/1998, para 23, can be downloaded at http://www.jura.uni-sb.de/jurpc.
[35] United Nations CISG, Convention on Contracts for the International Sale of Goods of 11 April 1980, in force in Austria since 1 January 1989, BGBl 1988/96; Kropholler, Europäisches Zivilprozessrecht, Kommentar zum EuGVÜ und Lugano-Übereinkommen[6] (1998) Article 5 marg no 22.
[36] It is the prevailing opinion that software that is not stored on a data medium is also covered by the CISG definition of goods; Karollus, UN-Kaufrecht (1991) 21; Diedrich, Anwendbarkeit des Wiener Kaufrechts auf Softwareüberlassungsverträge, RdW 1993, 441; cf also OLG Koblenz 17 September 1993, 2 U 1230/91, http://www.jura.unifreiburg.de/ipr1/cisg/urteiletext/91.htm, which, with reference to the concept of goods, which must be interpreted broadly, applied CISG to a contract for the creation and supply of a logo. Contra Czerwenka, Rechtsanwendungsprobleme im internationalen Kaufrecht (1988) 147f.
[37] Article 31(c), CISG.
[38] Article 31(a) CISG; Karollus, UN-Kaufrecht (1991) 108ff; Wilhelm, UN-Kaufrecht (1993) 13.
[39] See Mankowski, Internet und besondere Aspekte des Internationalen Vertragsrechts (Teil 1), CR 1999, 512 (515) with further references, on the problems of the ‘closest connection’ in private international law, which are similar in nature. See also below.
[40] Czernich/Tiefenthaler, Übereinkommen, Article 5 marg no 31; Klauser, EuGVÜ und EVÜ (1999)135; Neumayr, EuGVÜ, LGVÜ: Österreich und die europäischen Zuständigkeits- und Vollstreckungsabkommen (1999) 31.
[41] Burgstaller/Ritzberger in Burgstaller (fn 25) marg no 2.62f; Czernich, Erfüllungsgerichtsstand, AnwBl 1996, 426 (428); Musger, Übereinkommen, RZ 1993, 192 (195); but see Schack, IZVR3, marg no 272 with further references.
[42] Czernich/Tiefenthaler, Übereinkommen, Article 5 marg no 26ff.
[43] Commission of the European Communities, Analysis of the draft rules for a Council Regulation (EC) on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters, of 14 July 1999, 99/0154 (CNS).
[44] Mankowski, Internet und besondere Aspekte des Internationalen Vertragsrechts (Teil 1), CR 1999, 512 (515) with further references. Contra Koch, Internet-Recht (1998) 52 on the similar question in private international law: to which state has the contract the closest connection? On this, see also below at fn 51.
[45] See Löhning, Die Einbeziehung von AGB bei Internet-Geschäften, NJW 1997, 1688; Kuner, Internationale Zuständigkeitskonflikte im internet, CR 1996, 453 (457).
[46] On the area of application of Article 17 of the Brussels Convention/Lugano Convention and s 104 of the JN, see Burgstaller, Probleme der Prorogation nach dem Lugano-Übereinkommen, JBl 1998, 691 (691f). On Article 17 of the Brussels Convention/Lugano Convention, see Burgstaller/Ritzberger in Burgstaller (fn 25) marg no 2.147; Saenger,Internationale Gerichtsstandsvereinbarungen nach EuGVÜ und LugÜ, ZZP 1997, 477 (485); Schlosser, EuGVÜ (1996) Article 17 marg no 19.
[47] Article 23(1)(a) Brussels Regulation, Article 17(1)(a) Brussels Convention/Lugano Convention.
[48] Geimer/Schütze, Europäisches Zivilverfahrensrecht (1997) Article 17 marg no 105, 109 with further references; Rüssmann, Verbraucherschutz im internet, K&R 1998, 129ff (132).
[49] Section 88 of the JN.
[50] On the requirement of documentary proof, see above in connection with agreeing on a jurisdiction of place of performance under s 88 JN.
[51] Eg Simotta in Fasching, Kommentar zu den Zivilprozessgesetzen I (2000) s 104 JN marg no 55, 60, 68 with further references; Fasching, Lehrbuch des österreichischen Zivilprozessrechts2 (1990) marg. no. 196; Mayr in Rechberger, Kommentar zur ZPO (2000) s 104 JN marg no 6 with further references; OGH EvBl 1975/644; OGH ZBl 1931/45. This is overlooked by Lurger, Zivilrechtliche Aspekte des E-Commerce unter Einschluss des Verbraucherrechts und des Kollisionsrechts, VR 2001, 14 (17ff).
In particular, for an agreement on a jurisdiction under s 104 of the JN - unlike under the Brussels Regulation, Brussels Convention and Lugano Convention - a general reference to general terms of business that are merely enclosed is not to be sufficient, even between business persons. Instead, case law requires that the general terms of business containing the jurisdiction clause should be confirmed by a handwritten signature. OGH EvBl 1963/488 = RZ 1963, 1999; OGH EvBl 1951/19; Mayr in Rechberger, Kommentar zur ZPO (2000) § 104 JN marg no 6 with further references.
[52] Section 4(1) SigG.
[53] Article 3 of the Rome Convention.
[54] The authority for this in the Directive is in Article 3(3) in conjunction with the Annex to the
E-Commerce Directive.
[55] Schauer, E-Commerce in der Europäischen Union (1999) 113ff; Mehrings, Internet-Verträge und internationales Vertragsrecht, CR 1998, 613 (615). The law governing the form of such agreements is determined under Article 9 of the Rome Convention.
[56] Klauser, EuGVÜ und EVÜ in Kraft getreten, ecolex 1998, 903 (906); Heiss in Czernich/Heiss,EVÜ, Das Europäische Schuldvertragsübereinkommen, Kommentar (1999) Article 3 marg no
[4] .
[57] Schwimann, Internationales Privatrecht einschließlich Europarecht[3] (2001) 104 with further references. Contra Heiss in Czernich/Heiss, EVÜ (1999) Article 3 marg no 4 and the prevailing opinion in Germany arguing in favour of validity, eg Klauser, EuGVÜ und EVÜ in Kraft getreten, ecolex 1998, 903 (906); Mehrings, Internet-Verträge, CR 1998, 613 (616). However, domestic enterprises cannot agree between themselves on the application of the CISG, since this presupposes that parties have their establishments in different countries (Article 1 CISG).
[58] Czernich, Kauf- und Dienstleistungsverträge im Internet, ecolex 1996, 82 (84); Mehrings, Internet-Verträge, CR 1998, 613 (617). There are special provisions for contracts relating to the transportation of goods and to real property (Article 4(3) and (4) of the Rome Convention).
[59] On the difficulty in establishing that a website is directed to a particular market, in the absence of express restrictions on sale and delivery, see below.
[60] Mehrings, Internet-Verträge, CR 1998, 613 (617); Pfeiffer, Die Entwicklung des internationalen Vertrags-, Schuld- und Sachenrechts in den Jahren 1995/96, NJW 1997, 1207 (1214).
[61] Mankowski, Internet (Teil 1), CR 1999, 512 (516).
[62] Ibid, 515 emphasising the work of organisation and controlling that the seller carries out from its seat. Contra Koch, Internet-Recht (1998) 52, who states that the seat of the seller can be decisive only for a standardised object of performance such as a text file, a work of music or a standard software programme. In other cases in which performance has to be adapted to the individual circumstances of the customer, in particular to the customer’s computer, the focus of the activity is, according to Koch, at the customer’s seat, even if the seller in reality operates from its computer.
[63] Section 20 in conjunction with s 1(2) of the ECG.
[64] The exceptions from the principle of the country of origin contained in ss 21 and 22 of the ECG have other purposes: s 21 ECG excludes certain areas of law - in contract law above all the freedom of choice of law and consumer contracts - from the principle of the country of origin from the outset, and s 22 of the ECG - observing a precisely prescribed notification procedure (s 23 ECG) - admits exceptions in individual cases to protect general interests such as public order, health or consumers. On the authority for this in the Directive, see Article 3(3), (4) and (5) and Annex of the E-Commerce Directive.
[65] Articles 15 and 16 Brussels Regulation, Articles 13 and 14 Brussels Convention/Lugano Convention. The consumer need only allow himself to be sued in his country of residence (mandatory jurisdiction, Article 16(2) of the Brussels Regulation or Article 14(2) of the Brussels Convention/Lugano Convention). If the consumer appears as the claimant, however, he has the choice between conducting litigation in his country of residence or in the country of residence of the internet seller (Article 16(1) of the Brussels Regulation or Article 14(1) of the Brussels Convention/Lugano Convention). In addition, he can also sue the seller at the site of a branch establishment, agency or other establishment, provided the litigation relates to the operations of this (Article 15(2) in conjunction with Article 5(5) of the Brussels Regulation, Article 13(2) in conjunction with Article 5(5) of the Brussels Convention/Lugano Convention).
[66] Article 5(2) and (3) of the Rome Convention.
[67] Articles 2, 3, 15(2) and 60 of the Brussels Regulation and Articles 2, 3, 13(2) and 53 of the Brussels Convention/Lugano Convention.
[68] Czernich/Tiefenthaler, Neue Aspekte im internationalen Verfahrensrecht durch den BeitrittÖsterreichs zum EuGVÜ, JBl 1998, 745 (746ff); Schoibl, Die Zuständigkeit für Verbrauchersachen nach europäischem Zivilverfahrensrecht des Brüsseler und des LuganeÜbereinkommens (EuGVÜ/LGVÜ) (Teil 2), JBl 1998, 767 (770ff). The same applies to autonomous German law; Rüßmann, Verbraucherschutz im Internet, K&R 1998, 129 (133); Thorn, Verbrauchergerichtsstand nach EuGVÜ und örtliche Zuständigkeit, IPRax 1994, 426ff; LG Konstanz 24 August 1992, IPRax 1994, 448ff.
[69] The concept of the consumer must be defined within the context of the contract and be restricted to private end users; it largely corresponds to the definitions of consumers in Article 5(1) of the Rome Convention and s 1 KSchG; cf. EuGH 19 January 1993 -Shearson/TVB - NJW 1993, 1251; Czernich/Tiefenthaler, Übereinkommen, Article 13 marg no 6; Kropholler, Europäisches Zivilprozessrecht, Kommentar zu EuGVO und LuganoÜbereinkommen[7] (2002) Article 15 marg no 4ff; Schlosser, EuGVÜ (1996) Article 13 marg no 3ff; Schoibl, Zuständigkeit (Teil 1), JBl 1998, 700 (704).
[70] Czernich/Tiefenthaler, Übereinkommen, Article 13 marg no 7; Mehrings, Internet-Verträge, CR 1998, 613 (617ff).
[71] Article 13(3) of the Brussels Convention/Lugano Convention, Article 5(2) alternative 1 of the Rome Convention; The other alternative requirements in Article 13 of the Brussels Convention/Lugano Convention and Article 5 of the Rome Convention are of no practical relevance to the internet area. However, some authors want to apply Article 5(2) alternative 2 of the Rome Convention to internet contracts too; this provision applies the law of the consumer’s country even if the entrepreneur (or the entrepreneur’s agent) received the consumer’s order in the consumer’s normal country of residence. To this effect see, for example, Mehrings, Internet-Verträge, CR 1998, 620, if the consumer was able to rely on being protected by his domestic law as a result of the concrete initiation of the transaction by the other party to the contract (by reason of language, currency, naming of domestic service providers etc). However, it is not necessary to take such a broad interpretation of this provision, which was passed with trade fairs and similar sales events in mind. The cases that may possibly fall under this provision may as a general rule be subsumed under Article 5(2) alternative 1 of the Rome Convention - the requirement that an offer or advertising has already been made (on this, see immediately below in text). See Kronke, Electronic Commerce und Europäisches Verbrauchervertrags-IPR, RIW 1996, 988, who rejects the application of Article 5(2) alternative 2 of the Rome Convention to internet contracts putting particular emphasis on the fact that the receiving of the order in the meaning of Article 5(2) alternative 2 of the Rome Convention requires the seller to be physically present.
The exception provided in Article 5(4) of the Rome Convention for services that are to be performed exclusively outside the consumer’s normal state does not fit services by internet, which typically cannot be allocated to any particular place ‘exclusively’. Mankowski, Das Internet im internationalen Vertrags- und Deliktsrecht, RabelsZ 63 (1999) 203 (254ff); Schu, ‘The applicable law to consumer contracts made over the internet - consumer protection through private international law?’, International Journal of Law & Information Technology 5 (1997) 192 (218).
[72] Czernich/Tiefenthaler, Übereinkommen, Article 13 marg no 17 with further references; Heiss in Czernich/Heiss, EVÜ (1999) Article 5 marg no 29ff with further references.
[73] Rüßmann, Internationale Zuständigkeit für die Durchsetzung von Ansprüchen aus Geschäfts- und Wettbewerbshandlungen im Internet, JurPC Web-Dok 108/1998, para 23, http://www.jura.uni-sb.de/jurpc; Mehrings, Internet-Verträge, CR 1998, 613 (619) referring to the fact that the location of the server is not decisive.
[74] Article 15(1)(c) of the Brussels Regulation.
[75] Rüßmann, Internationale Zuständigkeit für die Durchsetzung von Ansprüchen aus Geschäfts- und Wettbewerbshandlungen im Internet, JurPC Web-Dok 108/1998, para 23, http://www.jura.uni-sb.de/jurpc; Mehrings, Internet-Verträge, CR 1998, 613 (619) with reference to the fact that the location of the server is not decisive.
[76] Boele-Woelki, Internet und IPR: Wo geht jemand ins Netz?, in Dicke (ed), Völkerrecht und Internationales Privatrecht in einem sich globalisierenden internationalen System -Auswirkungen der Entstaatlichung transnationaler Rechtsbeziehungen (2000) 31ff, 33 ff; Kohler, Die Revision des Brüsseler und des Luganer Übereinkommens über die gerichtliche Zuständigkeit und die Vollstreckung gerichtlicher Entscheidungen in Zivil- und Handelssachen - Generalia und Gerichtsstandsproblematik, in Gottwald (ed), Revision desEuGVÜ - Neues Schiedsverfahrensrecht (2000) 1 (20). See also Jayme/Kohler, Europäisches Kollisionsrecht 1999 - Die Abendstunde der Staatsverträge, IPRax 1999, 401 (405ff) with further references, above all on the criticism from the seller’s point of view.
[77] Proposal for a Council Regulation (EC) on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (COM (1999) 348 final, pp 17-18.
[78] Mankowski, Internet (Teil 1), CR 1999, 513 (515) with further references, who rightly undertakes an interpretation comparing the conventions, including CISG; Kaiser/Voigt, Vertragsschluss und Abwicklung des Electronic Commerce im Internet - Chancen und Risiken, K&R 1999, 445 (451); Thorn, Verbraucherschutz bei Verträgen im Fernabsatz, IPRax 1999, 1 (3); Klimeck/Sieber, Anwendbares Recht beim Vertrieb digitalisierbarer Waren über das Internet am Beispiel der Softwareüberlassung, ZUM 1998, 902 (904, 906ff) with a descriptive summary of the state of the arguments. Contra Koch, Internet-Recht (1998) 53; Heiss in Czernich/Heiss, EVÜ (1999) Article 5 marg no 16, who, like the prevailing opinion on s 90 of the German Civil Code, requires that the software be incorporated on a physical data medium; cf Heinrichs in Palandt, BGB61 (2002) § 90 marg no 2; Junker/Benecke, Computerrecht2 (2000) 113 with further references. However, as Heiss too shows, the concept of movable property in Article 5 of the Rome Convention and in Article 13 of the Brussels Convention/Lugano Convention is to be defined within the context of the contract.
[79] Koch, Internet-Recht (1998) 53 with further references.
[80] Non-physical online transfers are regarded as services, for example in England and Finland and in some communications and legal acts of the EU (eg E-Commerce Directive, [2000] OJ L178/1). See Cox, ‘Chaos versus uniformity: the divergent views of software in the International community’, 4 The Vindobona Journal of International Commercial Law and
Arbitration, 2ff.
[81] To quote the wording of the Brussels I Regulation.
[82] Mankowski, Das Internet im internationalen Vertrags- und Deliktsrecht, RabelsZ 63 (1999) 203 (234ff) with further references; Mehrings, Internet-Verträge, CR 1998, 613 (619); Kronke, Electronic Commerce, RIW 1996, 985 (988); Moritz, Quo vadis elektronischer Geschäftsverkehr?, CR 2000, 61 (65). Prevailing literature requires advertising directed specifically at the consumer’s country; in the case of the medium of the Internet, this is in general satisfied for all countries, since those who use the World Wide Web at least accept the risk that their advertising will be read all over the world (on this, see below). On the requirement of directed conduct, see Guiliano/Lagarde, Bericht zum Übereinkommen über das auf vertragliche Schuldverhältnisse anzuwendende Recht, ABl 1980 Nr C 262, S 24; Hoffmann in Soergel, BGB, 10. Band, EGBGB (1996) Article 29 EGBGB marg no 18 with further references.
[83] Article 17 of the Brussels Regulation, Article 15 of the Brussels Convention/Lugano Convention
[84] Section 14 (1) KSchG;The consumer has a general place of jurisdiction in these locations in any event. For more detail, see Apathy in Schwimann, ABGB-Praxiskommentar[2] (1997) § 14 KSchG marg no 1ff.
[85] Article 5(2) of the Rome Convention; Heiss in Czernich/Heiss, EVÜ (1999) Article 5 marg no 58ff.
[86] For details, see s 13a(1) of the Austrian Consumer Protection Act, Konsumentenschutzgesetz, KSchG.
[87] Section 6 KSchG and ss 864a, 879(3) Austrian Civil Code.
[88] Section 13a(2) KSchG; Schwimann, Internationales Privatrecht einschließlich Europarecht3 (2001) 125ff; Holzhammer/Roth, Einführung in das Bürgerliche Recht mit IPR[5] (2000) 398ff.
[89] The minimal contacts test, developed by the US Supreme Court in its decision International Shoe v Washington, [1945] USSC 158; 326 US 310 (1945) for interlocal relationship between the US states, is subject to particularly strict requirements in the international context, that is, in relationship to other countries. On international jurisdiction, see also sections 401, 421(1) and (2) Restatement Third of the Foreign Relations La; Rau, ‚Minimum Contacts’ und ‚Personal Jurisdiction’ über auswärtige Gesellschaften im Cyberspace 2000, 761 (765ff).
[90] For more detail, see Bettinger, Der lange Arm amerikanischer Gerichte: Personal Jurisdiction im Cyberspace, GRUR Int 1998, 660ff; Koch, Internationale Gerichtszuständigkeit und Internet, CR 1999, 121 (125ff); Developments in the Law - The Law of Cyberspace, Harvard Law Review 112 (1999) 1575 (1697ff); Lejeune, ‚Personal Jurisdiction’ über ausländische Firmen nach amerikanischem Zivilprozessrecht, RIW 1998, 8ff; Donohue, Litigation im Cyberspace, http://www.perkinscoie.com/aba/usjuris.htm; Kaufmann-Kohler in Boele-Woelki/Kessedjian (ed), Internet - Which Court Decides?, Which Law Applies? (1998) 136 above all on the practice of American courts with regard to interlocal jurisdiction.
[91] [1980] USSC 12; 444 US 286 (1980).
[92] See above fn 7.
[93] However, this is quite typical of the American procedural system, in particular since the individual states have both federal courts and also their own state courts, and since the long-arm statutes vary in detail from state to state.
[94] In Inset Systems v Instruction Set Inc 937 F Supp 161 (D Conn 1996), for example, the court stated that it had jurisdiction because the defendant could reach all the internet users in the forum state with its internet advertising, and moreover, the defendant’s website gave a toll-free 1-800 telephone number. Contra Rannoch, Inc v The Rannoch Corporation, 1999 WL 450824 (ED Va 30 June 1999); on this, see below in text at fn 85.
[95] Thus, in Millennium Enterprises, Inc, dba Music Millennium and Millennium Music v Millennium Music, LP, Millennium Music, Inc, 33 F Supp 2d 907/24, Civ No 98-1058-AA (D Or 4 January 1999), http://www.bna.com/e-law/cases/millen.html, the court denied its jurisdiction on the basis that it was possible over the Internet to order a CD from any state, because the element of ‘purposefully directed at this forum’ was missing. See also Hanson v Denckla, [1958] USSC 165; 357 US 235 (1958): ‘purposeful availment’; Asahi Mental Industries Co v Superior Court, [1987] USSC 18; 480 US 102 (1987): ‘purposeful direction’; for a critical view of this, see Juenger, Amerikanische Praxis und europäische Übereinkommen, in Basedow/Hopt/Kötz (eds), Festschrift für Ulrich Drobnig zum siebzigsten Geburtstag (1999) 299ff.
[96] Kunert, Internationale Zuständigkeitskonflikte im Internet, CR 1996, 454ff; Koch, Internationale Gerichtszuständigkeit und Internet, CR 1999, 121 (126); eg, Millennium Enterprises Inc, dba Music Millennium and Millennium Music v Millennium Music LP, Millennium Music Inc, 33 F Supp 2d 907/24, Civ No 98- 1058-AA (D Or 4 January 1999), http://www.bna.com/e-law/cases/millen.html; Bernhard M Resnick, V Angel Manfredy, John Manfredy, Jeffrey H Brown and D’Ancona & Pflaum, 1999 WL 257751, 4 (ED Pa 22 April 1999), http://www.bna.com/e-law/cases/resnick.html. Cf also CompuServ, Inc v Patterson, Case No. C2/94/91, (SD Ohio 11 August 1994).
[97] E.g., Cybersell Inc v Cybersell, Inc, [1997] USCA9 3689; 44 USPQ 2d 1928 (9th Cir, 2 December 1997), http://www. bna.com/e-law/cases/cybersell.html.
[98] Eg, American Network Inc v Access American/Connect Atlanta Inc, 975 F Supp 494 (SDNY, 1997), http://www. bna.com/e-law/cases/amnet.html; CompuServ Inc v Patterson, Case No C2/94/91, (SD Ohio, 11 August 1994).
[99] Mieczkowski v Masco Corp, No 5: 96cv 286, 1998 WL 125, 678 (ED Tex, 18 March 1998).
[100] American Network Inc v Access American/Connect Atlanta, Inc, 975 F Supp 494 (SDNY, 1997), http://www. bna.com/e-law/cases/amnet.html.
[101] Zippo Manufacturing Comp v Zippo Dot Com Inc, 952 F Supp 1119 (WD Pa, 1997), http://www.bna.com/e-law/cases/zippo.html.
[102] Resuscitation Technologies Inc v Continentanl Health Care Corp, 1997 US Dist LEXIS 3523, 17, 1997 WL 149567, http://www.bna.com/e-law/cases/resus.html; Cody v Ward, 954 F Supp 43, 44 (D Conn, 1997), http://www.bna.com/e-law/cases/cody.html; Edias Software Int LLC et al v Basis International Ld, 947 F Supp 413, 420 (D Ariz, 1996), http://www.bna.com/e-law/cases/edias.html; Hall v LaRonde, 66 Cal Rptr 2d 399, 402 (Cal Ct App, 1997).
[103] Advanced Software Inc v Datapharm, Inc, Case No CV 98-5943 DDP (CD Cal, 11 March 1998); Archdiocese of St Louis and Papal Visit 1999 v Internet Entertainment Group Inc, Case No 4:99CV27SNL (ED Mo, 1999), http://www.bna.com/e-law/cases/pope99.html; International Star Registry of Illinois v Bowman-Haight Ventures Inc, 1999 WL 300285, 6 (ND, III), No 98C6823, May 6, 1999, http://www.bna.com/e-law/cases/starreg.html; Zippo Manufacturing Comp v Zippo Dot Com Inc, 952 F Supp 1119 (WD Pa, 1997), http://www.bna.com/e-law/cases/zippo.html; Maritz Inc v Cybergold Inc, 947 F Supp 1328, 1334 (ED Mo, 1996), http://www.bna.com/e-law/cases/cybgold.html. Cf also The Hearst Corp v Ari Goldberger, No 96 Civ 3620, 1997 WL 97097 (SDNY, 26 February 1997), where the court took the view that neither the website that could be accessed in New York nor the emails sent to selected customers constituted ‘doing business’ in the meaning of the New York long-arm statute.
[104] Rannoch Inc v The Rannoch Corporation, 1999 WL 450824 (ED Va, 30 June 1999).
[105] Arter/Jörg/Gnos, Zuständigkeit und anwendbares Recht bei internationalen Rechtsgeschäften mittels Internet unter Berücksichtigung unerlaubter Handungen, AJP/PJA 3/2000, 277 (282ff).
[106] Bremen v Zapata Offshore Co, 407 US 1, 10 (1972); CompuServ v Patterson, 89 F 3d 927 (6th Cir, 1996).
[107] Perkins v. CCH Computax, Inc., 106 NC App 210, 415 SE 2d 755 (1992); Lauro Lines v Chasser, [1989] USSC 98; 490 US 495 (1989); Sterling Forest Assoc Ltd v Barnett-Range Corp, [1988] USCA4 329; 840 F 2d 249 (4th Cir, 1988). Provisions to this effect are also found in some American model codes, for example in a planned addition to the Uniform Commercial Code for software contracts and information licences (Article 2B, Section 108 UCC, http://www.law.uh.edu/ucc2b) and for the purchase of software and information in the Uniform Computer Information Transaction Act (section 110 UCITA), which has already come into force in Maryland (1 October 2000) and Virginia (1 July 2001) and the implementation of which has already commenced in a number of other states (Arizona, District of Columbia, Illinois, Maine, New Hampshire, New Jersey, Oregon, Texas), http://www.ucitaonline.com. A similar provision in the bill for the Uniform Electronic Transactions Act (section 108 UETA) was deleted without replacement in the final version on 25 November 1997, after a detailed discussion; http://www.uetaonline.com.
[108] Carnival Cruise Lines, Inc v Shute, 111 S Ct 1522 (1991) (is ‘so inconvenient as to deprive a party of its day in court’).
[109] Jayme, US Supreme Court: Zur Wirksamkeit grenzüberschreitender Gerichtsstandsklauseln in Verbraucherverträgen, IPRax 1993, 42f; Peterson, Prorogation Clauses in the United States after the Carneval Cruise Line Cases, IPRax 1993, 421ff; Bonny v Society of Lloyd’s, 3 F 3d 156 (7th Cir, 1993).
[110] Carnival Cruise Lines Inc v Shute, 111 S Ct 1522 (1991) with further references.
[111] See above fn 8.
[112] See above fn 7.
[113] However, the Hague Convention on Recognition of Jurisdiction and Enforcement of Judgments failed not only because of the question of consumer protection in consumer contracts. There are plainly unsurmountable differences in other areas too, such as the protection of intellectual property and the relevance of human rights in civil proceedings. Von Mehren, The Hague Jurisdiction and Enforcement Convention Project Faces an Impasse A Diagnosis and Guidelines for a Cure, IPRax 2000, 465 (466) with further references.
[114] Kohler, Die Revision des Brüsseler und des Luganer Übereinkommens, in Gottwald (fn 62) 1 (34 fn 137).
[115] Arter/Jörg/Gnos, Zuständigkeit und anwendbares Recht bei internationalen Rechtsgeschäften mittels Internet unter Berücksichtigung unerlaubter Handungen, AJP/PJA 3/2000, 277 (292).
[116] This Act can be downloaded at http://www.ucitaonline.com.
[117] Such a provision is also contained in the planned addition to the Uniform Commercial Code (Article 2B, s 107 UCC), http://www.law.uh.edu/ucc2b.
[118] Section 109(a) UCITA; similarly s 2B-108(a) UCC (Draft).
[119] Section 109(b)(1) UCITA; similarly s 2B-108(b)(1) UCC (Draft).
[120] Section 109(b)(2) UCITA; similarly s 2B-108(b)(2) UCC (Draft).
[121] Section 109(b)(3) UCITA; similarly s 2B-108(b)(3) UCC (Draft).
[122] Reporter’s Notes, section 109 note 5, http://www.ucitaonline.com.
[123] Section 109(c) UCITA; similarly s 2B-108(c) UCC (Draft).
[124] Article 13(1)(3) of the Brussels Convention/Lugano Convention and Article 5(2) alternative 1
of the Rome Convention.
[125] Article 15(1)(c of the Brussels Regulation.
[126] A good survey of the various suggestions in the literature for restriction, all of which, however, must in the last instance be rejected, can be found in Lurger, Internet, Internationales Privatrecht und europäische Rechtsangleichung, in Gruber (ed), Die rechtliche Dimension des Internet (2001) 69 (75f) with further references.
[127] Eg, Rüßmann, Zuständigkeit, JurPC Web-Dok 108/1998, para 50, http://www.jura.unisb.de/jurpc; Rüßmann, Wettbewerbshandlungen, K&R 1998, 422 (424); Arter/Jörg/Gnos, Zuständigkeit und anwendbares Recht bei internationalen Rechtsgeschäften mittels Internet unter Berücksichtigung unerlaubter Handungen, AJP/PJA 3/2000, 277 (289); Reich/Nordhausen, Verbraucher und Recht im elektronischen Geschäftsverkehr (2000) 91ff, 94; cf Czernich, Kauf- und Dienstleistungsverträge, ecolex 1996, 82 (84) holding a more cautious view; Schauer, E-Commerce in der Europäischen Union (1999) 113.
[128] Rüßmann, Zuständigkeit, JurPC Web-Dok 108/1998, para 48ff, can be downloaded at http://www.jura.uni-sb.de/jurpc.
[129] Contra Czernich, Kauf- und Dienstleistungsverträge, ecolex 1996, 82 (84), who denies prior business activities by the Internet seller in the consumer’s country in such a case, with reference to the obvious divergency between the intended market and the market found.
[130] Köhler/Arndt, Recht des Internet[2] (2000) 143; Rüßmann, Zuständigkeit, JurPC Web-Dok 108/1998, para 52, http://www.jura.uni-sb.de/jurpc; Czernich, Kauf-und Dienstleistungsverträge, ecolex 1996, 82 (84), Mehrings, Internet-Verträge, CR 1998, 613 (620); on international competition law see Dieselhorst, Anwendbares Recht, ZUM 1998, 294.
[131] Rüßmann, Zuständigkeit, JurPC Web-Dok 108/1998, para 2, http://www.jura.uni-sb.de/jurpc, gives an example of a cleaning company in Saarbrücken in which nobody in Munich will be interested, but this example is not convincing in the last instance. Why should a person who owns a house in Munich, or even Salzburg, not be addressed by the cleaning services of a company in Saarbrücken advertised on the web, unless the web advertising makes it clear that the services offered can be carried out only in the Saarbrücken area? The Saarbrücken company could be a logistics headquarters that organises cleaning services in the most varied locations.
[132] Annex II, contained in a Memorandum of the Secretariat-General of the Council of the EU for the COREPER/Council of 14 December 2000 (in the corrected version of 20 December 2000) (14139/00 and 14139/00 COR2(de)-JUSTCIV 137), which was accepted in the Brussels I Regulation, printed in German in IPRax 2001, 259ff (261).
[133] This addition, which broadens the requirement of directing business to a particular consumer state, is overlooked by Mayr/Czernich, Das neue europäische Zivilverfahrensrecht (2002) 83; contrary to the clear wording of the declaration, they proceed on the basis that the contract must be entered into on the website too. Such a restriction to contracts entered into online would indeed have to be rejected as an arbitrary restriction. See Lurger, Internet, Internationales Privatrecht und europäische Rechtsangleichung, in Gruber (fn 105) 69 (78) contra Hausmann, Die Revision des Brüsseler Übereinkommens von 1968 - Teil I: Internationale Zuständigkeit, European Legal Forum 2000-01, 40 (45).
[134] See Brenn in Brenn (ed), E-Commerce-Gesetz (2002) 328, who, however, fails to appreciate the significance of the restriction to interactive websites when he states that the mere possibility of accessing a website is a sufficient connection to the consumer’s country of residence, irrespective of whether the website allows ordering online or not. In contrast to that, prevailing literature still bases its arguments on restriction on the basis of the content of the site, such as language, currency and subject of contract. Eg, Mayr/Czernich, Das neue europäische Zivilverfahrensrecht (2002) 83.
[135] Lurger, Internet, Internationales Privatrecht und europäische Rechtsangleichung, in Gruber (fn 105) 69 (77); Lurger, Grenzenlose Geschäfte bei grenzenlosem (Prozess-)Risiko? Wer weiß schon, welches Recht am Ende zur Anwendung kommt? in Pichler (ed), ‚eBusiness versus Recht Behindert Recht den Markt - ohne einem dringenden Schutzbedürfnis zu dienen?’ (2003) 107 (111).
[136] Lurger, Internet, Internationales Privatrecht und europäische Rechtsangleichung, in Gruber (fn 105) 69 (77), who, however, correctly points out that it would be worth considering drafting provisions on international jurisdiction more broadly than the equivalent rule in private international law.
[137] Lurger, Internet, Internationales Privatrecht und europäische Rechtsangleichung, in Gruber (fn 105) 69 (78); Mehrings, Internet-Verträge, CR 1998, 613 (620); Czernich, Kauf- und Dienstleistungsverträge, ecolex 1996, 82 (84); on international competition law, Dieselhorst, Anwendbares Recht, ZUM 1998, 293 (295); Hoeren, Cybermanners, WRP 1997, 993 (998); Ubber, Rechtsschutz, WRP 1997, 497 (503).
[138] Mehrings, Internet-Verträge, CR 1998, 613 (619); Mankowski, E-Commerce und internationales Verbraucherschutzrecht, MMR 2000, 22 (23ff); Mankowski, Das Internet im internationalen Vertrags- und Deliktsrecht, RabelsZ 63 (1999) 203 (234ff); Lurger, Internet, Internationales Privatrecht und europäische Rechtsangleichung, in Gruber (fn 105) 69 (77); see also von Hoffmann in Soergel, BGB, 10. Band, EGBGB (1996) Article 29 marg no 18 on the distribution of foreign television stations via domestic cable channels. Cf Kronke, Electronic Commerce, RIW 1996, 985 (988) on teleshopping and Czernich, Kauf- und Dienstleistungsverträge, ecolex 1996, 82 (84).
[139] Of this opinion, on international competition law, see Hoeren, Cybermanners, WRP 1997, 993 (998); Glöckner, Wettbewerbsverstöße im Internet - Grenzen einer kollisionsrechtlichen Problemlösung, ZVglRWiss 99 (2000) 278 (293ff); Ubber, Rechtsschutz, WRP 97, 497 (502 f); Dieselhorst, Anwendbares Recht bei Internationalen Online-Diensten, ZUM 1998, 293 (294f).
[140] On the existing possibilities of restricting access to a website by the use of passwords, top-levels domains or IP addresses, see Schauer, E-Commerce in der Europäischen Union (1999) 113; Mankowski, Das Internet im internationalen Vertrags- und Deliktsrecht, RabelsZ 63 (1999) 203 (243f); Tribunal de Grande Instance de Paris, Beschluss vom 20 November 2000 (Yahoo), K&R 2001, 63; on this case, see Lurger, Internet, Internationales Privatrecht und europäische Rechtsangleichung, in Gruber (fn 105) 69 (99f).
[141] This procedure is also recommended by Spindler, Internationales Verbraucherschutzrecht im Internet - Auswirkungen der geplanten neuen Verordnung des Rates über die gerichtliche Zuständigkeit und die Anerkennung und Vollstreckung von Entscheidungen in Zivil- und Handelssachen, MMR 2000, 18 (21) and Lurger, Internet, Internationales Privatrecht und europäische Rechtsangleichung, in Gruber (fn 105) 69 (78f). Contra Brenn in Brenn (ed), E-Commerce-Gesetz (2002) 329.
[142] Brenn in Brenn (ed), E-Commerce-Gesetz (2002) 329; however, for this reason he advocates not asking customers their residence at all. On this, see below VI B 1 at fn 143.
[143] Article 5(3) Brussels Regulation, Article 5(3) of the Brussels Convention/Lugano Convention. The concepts of delict and quasi-delict are to be interpreted autonomously within the context of the Regulation resp the Convention. The ECJ includes all the cases of liability for damage that are not connected to a contract in the meaning of Article 5(1) Brussels Convention/Lugano Convention, 27 September 1988, 189/87 -Kalfelis/Schröder NJW 1998, 3088. Also, the phrase ‘place where the harmful event occurred’ is interpreted autonomously, ECJ 30 November 1976 -Bier/Mines des Potasse D`Alsace - NJW 1977, 493: In the case of delict committed at a distance, international jurisdiction under Art 5(3) of the Brussels Convention/Lugano Convention is created both by the place where the act was committed and the place where the harmful event took effect.
[144] Rüßmann, Wettbewerbshandlungen im Internet Internationale Zuständigkeit und anwendbares Recht, K&R 1998, 422 (424); Musger, Übereinkommen, RZ 1993, 192 (196).
[145] See Köhler/Arndt, Recht des Internet (2000) 144f; Dieselhorst, Anwendbares Recht bei Internationalen Online-Diensten, ZUM 1998, 293 (294); Ubber, Rechtsschutz bei Missbrauch von Internet-Domains, WRP 1997, 497 (502); Rüßmann, Zuständigkeit, JurPC Web-Dok 108/1998, para. 35ff, http://www.jura.uni-sb.de/jurpc.
[146] ECJ 7 March 1995, C-68/93 - Fiona Shevill ua/Presse Alliance SA - NJW 1995, 1881ff.
[147] BGH NJW 1977, 1590.
[148] OLG München, OLGZ 87, 217 for local jurisdiction; see also Dittrich, Internet und On-Demand-Dienste im IPR, ecolex 1997, 166 (168).
[149] The most recent case law (OGH 9 October 1990, 4 Ob 91/90, JBl 1991, 800), in contrast to older decisions, no longer mentions distribution in accordance with intended use. Mayr in Rechberger, Kommentar zur ZPO (2000) § 83c JN marg no 3 with further references.
[150] Thiele, Der Gerichtsstand bei Wettbewerbsverstößen im Internet, ÖJZ 1999, 754 (758); Lurger, IZVR und IPR bei Internet Domain Namen, in Mayer-Schönberger/Galla/Fallenböck, Das Recht der Domain Namen (2001) 103 (130). On German law Rüßmann, Wettbewerbshandlungen, K&R 1998, 422 (424f).
[151] Section 48(2) IPRG.
[152] Behaviour exclusively related to business, eg bribery, on the other hand, is governed by the general conflict of law regime in s 48(1) IPRG. Koppensteiner, Österreichisches und Europäisches Wettbewerbsrecht3 (1997) § 21 marg no 19; Schwimann in Rummel, ABGB II (1992) § 48 IPRG marg no 11). On German law Rüßmann, Wettbewerbshandlungen, K&R 1998, 422 (425).
[153] Von Hoffmann, Internationales Privatrecht, 431f with reference to Article 41(1) Introductory Act to the German Civil Code (Einführungsgesetz zum Bürgerlichen Gesetzbuche, referred to below as EGBGB); Mankowski, Internet und Internationales Privatrecht, GRURInt 1999, 909f with further references, with the help of a corrective interpretation of Article 40(1)
EGBGB.
[154] Grandpierre, Herkunftsprinzip kontra Marktortanknüpfung (Frankfurt/M, 1999) 18f.
[155] Draft of a regulation on the law governing extra-contractual obligational relationships of 21 June 1999 (unpublished). The preliminary draft on which this was based, by the groupe européen de droit international privé, is published in IPRax 1999, 286. See also Jayme, Enwurfeines EU-Übereinkommens über das auf außervertragliche Schuldverhältnisse anwendbare Recht, IPRax 1999, 298; Wagner, Ein neuer Anlauf zur Vereinheitlichung des IPR für außervertragliche Schuldverhältnisse auf EU-Ebene, EuZW 1999, 709ff; Tettenborn, E-Commerce-Richtlinie: Politische Einigung in Brüssel erzielt, K&R 2000, 59 (61); Dethloff, Europäisches Kollisionsrecht des unlauteren Wettbewerbs, JZ 2000, 179.
[156] Glöckner, Wettbewerbsverstöße im Internet - Grenzen einer kollisionsrechtlichen Problemlösung, ZVglRWiss 99 (2000) 278 (293ff) with further references; Mankowski, Internet und Internationales Privatrecht, GRURInt 1999, 909 (916); Dethloff, Marketing im Internet und Internationales Wettbewerbsrecht, NJW 1998, 1596 (1600); Rüßmann, Wettbewerbshandlungen, K&R 1998, 442 (425). Cf also Kotthoff, Die Anwendbarkeit des deutschen Wettbewerbsrechts auf Werbemaßnahmen im Internet, CR 1997, 676 (680), who rejects the requirement of noticeability, taken over from European antitrust law, but in the last instance comes to the same conclusion.
[157] Lurger, IZVR und IPR bei Internet Domain Namen, in Mayer-Schönberger/Galla/Fallenböck (fn 129) 103 (121); probably also Schönherr, Wettbewerbsrechtliche Aspekte des Internet, ÖBl 1999, 267 (268f); see generally Simotta in Fasching, Kommentar zur ZPO, Band I[2] (2000) s 83c JN marg. no 38ff without dealing with Internet circumstances. Contra Thiele, DerGerichtsstand bei Wettbewerbsverstößen im Internet, ÖJZ 1999, 754 (755f), who denies the principle of effect in the law of international jurisdiction.
[158] Sack, Das Internationale Wettbewerbs- und Immaterialgüterrecht nach der EGBGB-Novelle, WRP 2000, 269 (278) confirms that there is a perceptible influence on the market at the place of distribution in accordance with intended use. The Higher Regional Court (Oberlandesgericht, OLG) Frankfurt am Main, 138 note Kotthoff, also defines the marketplace for Internet offers - clearly in conformity with the case law on international jurisdiction - as the place where the website can be accessed as it is intended to be.
[159] Rüßmann, Wettbewerbshandlungen, K&R 1998, 422 (424f); Rüßmann, Zuständigkeit, JurPC Web-Dok 108/1998, para 46ff, http://www.jura.uni-sb.de/jurpc; Härting, Internetrecht (1999) 21f;Hoeren, Cybermanners und Wettbewerbsrecht - Einige Überlegungen zum Lauterkeitsrecht im Internet, WRP 1997, 993 (998); Dieselhorst, Anwendbares Recht, ZUM 1998, 293 (295); Ubber, Rechtsschutz, WRP 97, 497 (502f); Kur in Loewenheim/Koch, Praxis des Online-Rechts (1998) 376f.
[160] However, an unfair internet seller can be ordered only to remove the market effects on the market in question - eg to cease operations in one region - but not to stop selling worldwide. To this effect, see OGH GRURInt 1999, 1062 (1065) (TV-Movie) with regard to selling TV programme magazines; Playboy Enterprises Inc v Chuckleberry Publishing Inc, Tattilo Editrice SpA, 939 F Supp 1032 (SDNY 1996). On this restriction of the competence to decide (Einschränkung der Kognitionsbefugnis), see Lurger, Internet, Internationales Privatrecht und europäische Rechtsangleichung, in Gruber (fn 105) 69 (92f, 99f) with further references; Glöckner, Wettbewerbsverstöße im Internet - Grenzen einer kollisionsrechtlichen Problemlösung, ZVfgRWiss 99 (2000) 278 (298ff) with further references.
[161] Dieselhorst, Anwendbares Recht, ZUM 1998, 293 (294); Dethloff, Kollisionsrecht, JZ 2000, 179 (181); Köhler/Arndt, Recht des Internet (2000) 143f.
[162] Lurger, Internet, Internationales Privatrecht und europäische Rechtsangleichung, in Gruber (fn 105) 69 (92f, 99f); Mankowski, Internet und Internationales Privatrecht, GRURInt 1999, 909 (919); Dieselhorst, Anwendbares Recht, ZUM 1998, 293 (294f); Hoeren, Cybermanners, WRP 1997, 993 (998); Ubber, Rechtsschutz, WRP 1997, 497 (502f); Kotthoff, Die Anwendbarkeit des deutschen Wettbewerbsrechts auf Werbemaßnahmen im Internet, CR 1997, 676 (677).
[163] On such possibilities as exist apart from this of restricting access to a website by the use of passwords, top-level domains or IP addresses, see the references in fn 119.
[164] Here too - just as in international contract law - the seller has the burden of proving that its internet activities are regionally restricted; see above.
[165] Lurger, IZVR und IPR bei Internet Domain Namen, in Mayer-Schönberger/Galla/Fallenböck (fn 129) 103 (131).
[166] Dethloff, Europäisches Kollisionsrecht des unlauteren Wettbewerbs, JZ 2000, 179 (183); Dethloff, Marketing im Internet und Internationales Wettbewerbsrecht, NJW 1998, 1596 (1598f); Kotthoff, Die Anwendbarkeit des deutschen Wettbewerbsrechts auf Werbemaßnahmen im Internet, CR 1997, 676 (677); Hoeren, Cybermanners undWettbewerbsrecht - Einige Überlegungen zum Lauterkeitsrecht im Internet, WRP 1997, 993 (998); Schönherr, Wettbewerbsrechtliche Aspekte des Internet, ÖBl 1999, 267ff; Spindler, Deliktsrechtliche Haftung im Internet - nationale und internationale Rechtsprobleme, ZUM 1996, 539 (560f).
[167] Dethloff, Europäisches Kollisionsrecht des unlauteren Wettbewerbs, JZ 2000, 179 (183). Contra Mankowski, Internet und Internationales Privatrecht, GRURInt 1999, 909 (913ff). On the state of the discussion see Lurger, IZVR und IPR bei Internet Domain Namen, in Mayer-Schönberger/Galla/Fallenböck (fn 129) 103 (131f) with further references; Lurger, Internationales Deliktsrecht und Internet - ein Ausgangspunkt für grundlegende Umwälzungen im Internationalen Privatrecht?, in Basedow/Drobnig/Ellger/Hopt/Kötz et al (eds), Aufbruch nach Europa (Tübingen 2001) 479 (482f) with further references, correctly pointing out that it is not the marketplace principle itself that violates fundamental freedoms, but only the relevant provision of marketplace competition law, whose contents turn out to be disproportionate. Similarly Rüffler in Koppensteiner, Österreichisches und europäisches Wirtschaftsprivatrecht, Teil 6/2: Wettbewerbsrecht - UWG (1998) 144f with further references.
[168] Article 3(1) and (2) E-Commerce Directive and s 20 of the ECG. For particular areas of television advertising, the Television Directive, Council Directive 89/552/EEC of 3 October 1989 on the co-ordination of certain provisions laid down by Law, Regulation or Administrative Action in Member States concerning the pursuit of television broadcasting activities, [1989] OJ L298/23, amended by Directive 97/36/EC also refers to the law of the country of origin (‘state of transmission principle’). Similarly in the Satellite Directive 93/83/EEC of 27 September 1993 on the co-ordination of certain rules concerning copyright and rights related to copyright applicable to satellite broadcasting and cable retransmission , [1993] OJ L248/15 for questions of copyright law.
[169] Brenn in Brenn (ed), E-Commerce-Gesetz (2002) 310. See on this in detail Lurger, Internet, Internationales Privatrecht und europäische Rechtsangleichung, in Gruber (fn 105) 69 (82ff) with further references; Lurger, Internationales Deliktsrecht und Internet, in Basedow/Drobnig et al. (fn 145) 479 (480f) with further references; Lurger/Vallant, Grenzüberschreitender Wettbewerb im Internet, RIW 2001, 188.
[170] See Proposal for a regulation to remove restrictions on sales promotions in the Internal Market COM (2001) 546 final, http://www.europa.eu.int/comm/internal_market/comcom/unfair/ index.de.htm, which contains provisions on information and transparency for discounts, free gifts, premiums, promotional contests and promotional games and thus is intended to do away with national prohibitions of such selling practices. In this way, the liberalisation of competition law that has already begun in some member states is advanced further. See also the abolition of discount and premium provisions in Austria in 1992 (by the Deregulation of Competition Law Act - Wettbewerbsderegulierungsgesetz, BGBl 1992/147) and in Germany in 2001. In addition, Austria is at present considering repealing the prohibition of premiums, which is still contained in s 91 of the Act against Unfair Competition - Bundesgesetz gegen den unlauteren Wettbewerb, UWG.
[171] Lurger, Internationales Deliktsrecht und Internet, in Basedow/Drobnig et al (fn 145) 479 (492); Lurger, Internet, Internationales Privatrecht und europäische Rechtsangleichung, in Gruber (fn 105) 69 (93). Cf Mankowski, Internet und Internationales Privatrecht, GRURInt 1999, 909 (915).
[172] See also Council Resolution of 19 January 1999 on the Consumer Dimension of the Information Society ([1999] OJ C23/01), printed in part in German in IPRax 1999, 291, which, inter alia, provides for the preservation and strengthening of the ‘laws with regard to the applicability of the legal provisions of the state of residence and of easy access to the national courts’.
[173] Article 3(4)(a)(i) of the E-Commerce Directive permits member states to deviate from the country of origin principle in individual cases for the sake of consumer protection, but measures of this kind are in principle governed by a precisely prescribed notification process (Article 3(4)(b), (5) and (6); see also s 22(2)(5) and s 23 of the E-Commerce Act). How far the states will make use of this rather laborious exception remains to be seen.
[174] Lurger, Internationales Deliktsrecht und Internet, in Basedow/Drobnig et al (fn 145) 479 (486ff) with further references; Lurger, Internet, Internationales Privatrecht und europäische Rechtsangleichung, in Gruber (fn 105) 69 (88ff); Lurger/Vallant, Grenzüberschreitender Wettbewerb im Internet, RIW 2001, 188 (194f).
[175] To date, the differences have prevented an official proposal by the Commission for the planned regulation on the law governing extra-contractual obligational relationships. For a general discussion on the dispute between the marketplace as a connecting factor and the country of origin principle, see Mankowski, Das Herkunftslandprinzip als Internationales Privatrecht der e-commerce-Richtlinie, ZVglRWiss 100 (2001) 137 (176ff); Pichler, Vorschlag für eine Richtlinie über den elektronischen Geschäftsverkehr (KOM [1958] 586 endg), European Law Reporter 1999, 74ff; Siehr, Telemarketing und Internationales Recht des Verbraucherschutzes, Jahrbuch des Schweizerischen Konsumentenrechts 1998, 151ff.
[176] Lurger, Internationales Deliktsrecht und Internet, in Basedow/Drobnig et al. (fn 143) 479 (93) with further references; Lurger, Internet, Internationales Privatrecht und europäische Rechtsangleichung, in Gruber (fn 105) 69 (93f); Lurger/Vallant, Die österreichische Umsetzung des Herkunftslandprinzips der E-Commerce-Richtlinie, MMR 4/2002, 203 (208). But see Thünken, Die EG-Richtlinie über den elektronischen Geschäftsverkehr und das internationale Privatrecht des unlauteren Wettbewerbs, IPRax 2001, 15 (22), who too hastily assumes that the country of origin principle of the E-Commerce Directive will also be taken over in the Rome II Regulation.
[177] Fritze/Holzbach, Die Electronic-Commerce-Richtlinie - Ende oder Chance für das deutsche Wettbewerbsrecht, WRP 2000, 872 (876); Halfmeier, Vom Cassislikör zur E-Commerce-Richtlinie: Auf dem Weg zu einem europäischen Mediendeliktsrecht, ZEuP 2001, 837 (868); Karenfort/Weißgerber, Lauterkeit des Wirtschaftsverkehrs in Gefahr? Die Konsequenzen der E-Commerce-Richtlinie für RabattG und ZugabeVO, MMR-Beilage H 7/2000, 38 (39).
[178] See, e.g., green paper on European Union consumer protection, COM (2001) 531 final, http://www.europa.eu.int/comm/consumers/index_de.html.
[179] Lurger/Vallant, Grenzüberschreitender Wettbewerb im Internet, RIW 2001, 188 (201f); Lurger, Die österreichische Umsetzung des Herkunftslandprinzips der E-Commerce-Richtlinie, MMR 4/2002, 203 (208f).
[180] This is also admitted by Arter/Jörg/Gnos, Zuständigkeit und anwendbares Recht bei internationalen Rechtsgeschäften mittels Internet unter Berücksichtigung unerlaubter Handungen, AJP/PJA 3/2000, 277 (292), but they still adhere to the restriction of the scope of websites on the basis of content criteria.
[181] Spindler, Internationales Verbraucherschutzrecht im Internet, MMR 1/2000, 18 (25).
[182] Lurger, Grenzenlose Geschäfte bei grenzenlosem (Prozess-)Risiko? Wer weiß schon, welches Recht am Ende zur Anwendung kommt? in Pichler (ed), ‚eBusiness versus Recht. Behindert Recht den Markt - ohne einem dringenden Schutzbedürfnis zu dienen?’ (2003) 107 (113), requiring certain provisos. See generally Binder, Legal Aspects of International Commercial Arbitration Administered Online, in Roth (ed), Rechtsstudium in Großbritannien (2001) 103 ff with further references; specifically on the Austrian legal situation see Mottl, Alternative Streitbeilegung bei Internetstreitigkeiten, in Brenn (ed), E-Commerce-Gesetz (2002) 151ff with further references.
[183] A model for this might be the Virtual Magistrate Arbitration Program of the Chicago-Kent College of Law, which provides a cost-effective online arbitration procedure for all kinds of claims based on Internet activities, including tortious conduct such as unfair business practices, violations of business secrets, copyright or trade mark law; http://www.vmag.org. See also the arbitration for violations of trade mark law by domain names that already exists under the ICANN Uniform Dispute Resolution Policy, based on the contractual relationship between the ICANN domain name allocation agency and the domain owners; http://www.icann.org.
[184] In detail, see Mottl, Alternative Streitbeilegung bei Internetstreitigkeiten, in Brenn (ed), E-Commerce-Gesetz (2002) 157f.
[185] Joint Declaration of the EU Council and the Commission on Article 15 of the Brussels Regulation, Annex II, point II 2, contained in a memorandum of the Secretariat-General of the Council of the EU for COREPER/the Council of 14 December 2000 (in the amended version of 20 December 2000; 14139/00 and 14139/00 COR2 (de)- JUSTCIV 137), which was accepted in the Brussels I Regulation, printed in German in IPRax 2001, 259ff (261).
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