On 16 October 2008, the European Court of Justice held in case C-298/07 Bundesverband der Verbraucherzentralen und Verbraucherverbände v Deutsche Internet Versicherung that e-commerce service providers do not necessarily have to provide a telephone number to allow customers to contact them, but that the service provider has to enable customers to contact it directly by non-electronic means of communication if, in certain circumstances (such as a journey or holiday), customers have no Internet access.
This case concerns the interpretation of Article 5(1)(c) of the E-commerce Directive 2000/31/EC which provides that an information society service provider has to provide his details, ‘including his electronic mail address, which allow him to be contacted rapidly and communicated with in a direct and effective manner’. Article 5 of the E-commerce Directive introduced transparency obligations to ensure that customers and the authorities know the identity of the e-commerce provider, can communicate effectively with the provider and to facilitate recourse in the case of defective service provision. This approach is also reflected in the OECD Guidelines on Consumer Protection of 1999. Unlike the E-commerce Directive the OECD Guidelines stipulate that e-mail, other forms of electronic contact or telephone number are alternatives. Section III, Paragraph A provides that businesses engaged in e-commerce with consumers should provide accurate, clear and easily accessible information about themselves sufficient to allow at a minimum: (i) identification of the business – including the legal name of the business, geographic address, e-mail address or other electronic means of contact, or telephone number, (ii) prompt, easy and effective consumer communication with the business, (iii) appropriate and effective resolution of disputes, (iv) service of legal process and (v) location of the business and its principals by law enforcement and regulatory officials.
This case arose from the business practices of a German car insurance company operating exclusively online. The Web site of this German company stated its postal and e-mail addresses, but no telephone number, with the consequence that customers could not contact it by telephone before the insurance contract was concluded. Customers were given a telephone number only after they had entered into an insurance contract and the German Federation of Consumers’ Associations argued that this prevented consumers from finding out all the details about the insurance contract. However, the Web site contained an online enquiry template through which customers could ask questions prior to the conclusion of the insurance contract and the evidence showed that defendant insurers usually replied to queries within 30-60 minutes.
The Consumers’ Associations argued that Article 5(1)(c) of the E-commerce Directive obliges e-commerce suppliers to provide a telephone number on their Web site. The case was appealed to the highest German civil court, the Federal Supreme Court (Bundesgerichtshof) who referred the question of interpretation to the ECJ.
The ECJ found that it was clear from the wording ‘including’ that the service provider had to give consumers contact details in addition to its e-mail address. The ECJ found that, even though the E-commerce Directive had as its objective the promotion of e-commerce, this did not mean that a provider could completely limit its business to electronic networks or that the Directive dispensed with forms of non-electronic communication. The Court pointed out that if customers were temporarily deprived of Internet access (while travelling or on holiday for example), they may find themselves unable to conclude a contract and therefore excluded from the market. In order to protect customers from errors, a means of non-electronic communication in addition to e-mail was necessary in exceptional circumstances. The Court argued that this would not impose a large financial burden on businesses since normally customers would use electronic communications and would resort to offline communication, only where they had no Internet access.
This additional means of communication has to be rapid, direct and effective. The Court held that these characteristics would be fulfilled by the telephone as a means of communication. However the telephone would not be the only means fulfilling these criteria. The Court held that effective communication does not necessarily mean that the communication has to be instantaneous. It was effective if it permitted adequate information to be obtained ‘within a period compatible with the needs or legitimate expectations of the recipient’. The Court mentioned as examples communication by personal contact at the premises of the service provider or by fax. The Court also held that the enquiry template if it is answered within 30-60 minutes by the business would be rapid, direct and effective communication. However for those customers who are temporarily deprived of Internet access another form of communication should also be provided on request.
This ruling by the ECJ is an unfortunate compromise, which does not really assist consumers nor does it reassure businesses. For customers, theoretically, the easiest and most direct way of finding out information relevant to their particular concerns is to call the business and to speak to a representative. Telephones are instantaneous and synchronous, allowing a direct dialogue. However employing staff to answer phone calls and operating a call centre is potentially very expensive and burdensome on a business, in particular where it is difficult to foresee how many calls are generated by a Web site or advertisements. Therefore some businesses wish to save that cost by forcing customers to conduct all dealings through the Internet and finding out the information online. Such businesses usually pass on some of the resulting efficiency cost to the consumer. Whether this is right or wrong depends probably on one’s view of the need for consumer protection, which in turn may depend on the business sector involved (customers of health insurance may have different needs from customers of car insurance). But it is also clear that the Court’s compromise is unlikely to work in practice: if businesses have to provide offline means of communication (personal contact on premises, fax, telephone) they will have to staff these means of communication and incur the cost. Businesses will find it difficult to limit customer contact only to the exceptional circumstances described in the judgment. Are they supposed to ask each customer at the beginning of the phone call: do you have Internet access and if the customer confirms that he has, is the business representative supposed to hang up? Or is the customer supposed to write a postcard from his holiday location asking the business to write back and provide the fax number for this ‘exceptional’ circumstance?
Dr Julia Hörnle, Senior Lecturer in Internet Law, School of Law, Queen Mary University of London, Programme Director LLM in Computer & Communications Law by Distance Learning: www.law.qmul.ac.uk/postgraduate/llmdistance/llmcomms/
