EU

Recent Developments May 2017

News Update EU
09 May 2017

Court of Justice: Online advertising should not be restricted

On 4 May 2017 the Court of Justice of the European Union ("CJEU") decided in the case of the Belgian dentist Luc Vanderborght (C-339/15) who advertised his services on his website in spite of Belgian legislation prohibiting any advertising relating to the provision of oral and dental care services. In criminal proceedings following a complaint of the dentists' professional association Mr Vanderborght maintained that the Belgian rules are contrary to EU law. The CJEU decided that, although the content and form of the advertisements may legitimately be subject to professional rules, a general and absolute prohibition of any type of online advertising aimed at promoting the activity of a dentist is contrary to the E-commerce Directive (2000/31/EC). The Belgian prohibition also constitutes a restriction on the freedom to provide services as it restricts the possibility for service providers to promote themselves and their services. Less restrictive measures aimed at the protection and the dignity of the profession of dentistry may however be allowed. This means that aggressive marketing campaigns can be restricted but not by means of outright bans.

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Commission proposes simpler and more efficient derivatives rules

On 4 May 2017 the European Commission proposed some targeted reforms to improve the functioning of the derivatives market in the EU. The reforms provide simpler and more proportionate rules for over-the-counter derivatives to reduce costs and regulatory burdens for market participants without compromising financial stability. The proposal introduces more proportionate rules for corporates. It re-focusses the scope of the clearing obligation for financial counterparties to include some additional relevant market players while exempting the smallest financial counterparties. It also allows for more time to develop clearing solutions for pension funds. In addition, the Commission is streamlining the application of reporting requirements and making them more proportionate; it is also introducing improvements to ensure the quality of reported data. The changes include measures that could save market participants, and in particular corporates such as energy companies or manufacturers, up to €2.6 billion in operational costs and up to €6.9 billion in one-off costs.

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Europan Parliament calls for EU strategy on the collaborative economy

On 3 May 2017 the European Parliament adopted a resolution on the need to address regulatory grey areas that cause significant differences among member states due to national and local regulations and case law. These new business models range from providing accommodation (e.g. Airbnb) and car journeys (e.g. Uber), to domestic services. The recommendations include, amongst others, (i) individual v professional providers: effective criteria for distinguishing between “peers” (e.g. individual citizens providing services on an occasional basis) and “professionals” is needed, with general principles at EU level and thresholds at national level; (ii) consumer rights: information to consumers about the rules applicable to each transaction and their rights; (iii) liability; the EU Commission should further clarify the collaborative platforms’ liability as quickly as possible; (iv) workers' rights: fair working conditions and adequate protection should be guaranteed for all workers in the collaborative economy; and (v) taxation: similar tax obligations should be applied to businesses providing comparable services, whether in the traditional economy or in the collaborative economy; MEPs advocate innovative solutions for improving tax compliance and call on platforms to collaborate to this end.

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AG Wahl: "foreign exchange risk" term not unfair

On 27 April 2017 Advocate General Wahl issued his opinion in the case of a group of Romanian borrowers who took out loans from Banca Româneasc─â in Swiss francs (CHF). The agreement stipulated that the loan be repaid in CHF. However, the exchange rate between CHF and the Romanian leu (RON) practically doubled between 2007 and 2014 and the borrowers brought an action before the Romanian courts, arguing that the currency repayment term in the loan agreement was unfair as the bank was in a position to foresee such fluctuations. AG Wahl observed that loan agreements in foreign currency are generally subject to a lower rate of interest than those in national currency, in consideration of the ‘foreign exchange risk’ to which they may give rise in the event of a fall in the value of the national currency. According to Wahl the seller or supplier does not have to anticipate and inform the consumer of subsequent changes which are not foreseeable, such as the exchange rate fluctuations. It is necessary to take into account all the circumstances that the seller or supplier could reasonably have envisaged at the time of conclusion of the contract. Whether there is a significant imbalance between the rights and obligations of the parties is not to be assessed by reference to developments subsequent to the conclusion of the contract which are outside the seller or supplier’s control and which he could not have anticipated. Protection of consumers does not mean that banks are expected to go further than their obligation to deal in a fair manner to the extent of anticipating future events arising after the conclusion of the agreement. We will now have to wait for the decision of the CJEU and see whether it will affirm the views of the AG. Looking at its 2014 judgment in the (similar) Kàsler case there might be a chance it will decide differently.

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European Commission proposes new compliance rules for Single Market

On 2 May 2017 the European Commission published a package of measures for enhancing the practical functioning of the EU Single Market. The proposed rules will make it easier for citizens and companies to manage their paperwork online in their home country or when working, living or doing business in another EU country and it will help ensure that commonly agreed EU rules are respected. The proposed package consists of three concrete initiatives; (i) a Single Digital Gateway, which is a single digital entry point for information, administrative procedures and assistance services; (ii) a Single Market Information Tool, which will allow the Commission to source defined and readily available data (such as cost structure, pricing policy or product volumes sold) in cases of serious difficulties with the application of EU Single Market legislation; and (iii) a SOLVIT Action Plan, aiming to increase the use of SOLVIT (an online service which provides solutions to European citizens and companies when they experience difficulties with public administrations while moving or doing business cross-border in the EU) by making sure that more citizens and businesses can easily access it and by improving data collection so that evidence from SOLVIT cases can be used to improve the functioning of the Single Market.

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The Houthoff Buruma EU team is available at eu-office@houthoff.com or +32 (0)2 507 98 00.

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