24th Mar 2018

Austrian privacy case against Facebook hits legal snag

  • Schrems (l) is pursuing a class action suit against Facebook. (Photo: Martin Hanzel)

Facebook Ireland appears to have won part of an ongoing battle with Austrian privacy campaigner Max Schrems.

On Monday (14 November), an advocate general from the European Court of Justice in Luxembourg issued an opinion that could complicate efforts to launch class action suits throughout Europe.

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Advocate general Michal Bobek said that while Schrems is free to sue Facebook Ireland, he cannot use claims domiciled outside Austria to file a class action against the company in Austrian courts.

Schrems is seeking some €500 in damages from Facebook on behalf of each of 25,000 people, over allegations the US company violates their privacy.

But Bobek said that such cases, also known as collective redress, would allow people to concentrate their claims onto courts in member states perceived as more favourable.

"It could lead to unrestrained targeted assignment to consumers in any jurisdiction with more favourable case-law," he said.

He also noted that it is not up to the Luxembourg-based court "to create such collective redress in consumer matters."

Unlike in the United States, class action suits are uncommon in Europe.

Schrems described the opinion in mixed terms, noting that the European Court of Justice had accepted a class action by 71 companies, in a separate case.

"Two years later, consumers that do the same thing as companies and generally enjoy higher protection, should not be protected by the law?," he said.

The issue has possible broader implications for a European Union that seeks to create a common market by harmonising rules regardless of where people live or work.

Should the Court rule in line with Bobek's opinion, then it would require Schrems to file the collective lawsuit in Ireland where Facebook is based.

But Schrems says such a scenario is unlikely given the millions of euros of legal fees required to steer it through the Irish court system.

Austria, Germany, and Portugal backed Schrem's arguments on collective redress. The European Commission offered only partial support, he said.

"I hope that the five judges that will ultimately decide over this case will take a closer look," he said.

Schrems can take his own case to Austria

However, the advocate general sided with Schrems over his own status.

Facebook attempted to derail the Schrems case in the Vienna court altogether by arguing he operates as a business and not as a consumer.

The distinction is important because EU law grants consumers the right to sue a foreign company in country where they live. But Bobek dismissed the Facebook arguments, and Schrems is free to sue the company before Austrian courts.

Schrems is pursuing Facebook over claims the company violated his privacy, by among other things, sharing his data with US intelligence services.

A panel of five judges at the European Court of Justice will likely rule on the case early next year.

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