Case C-375/15, BAWAG – communicating with its online banking customers by non-durable media [judgment 2017, ECLI:EU:C:2017:38]

In this case an Austrian bank is communicating with its online-banking customers via the bank’s website. It is also leaving important messages for them – such as changes to the terms and conditions applicable to a bank account – in the customer’s electronic mailbox provided by the bank. The question in this case is whether the bank can really be said to be communicating with its customers on ‘durable media’, as is required by the EU’s ‘payments services’ Directive 2007/64.

Background
The Austrian ‘BAWAG’ bank offers its customers E-banking services. To that end, the bank provides its customers with an electronic mailbox. In this way, customers can see what transactions have taken place, and how much money is in the account.

However, the bank also uses that mailbox to inform its customers of ‘other communications’, such as changes to the terms and conditions governing the bank’s services.

This is not correct, according to an Austrian Consumer Protection Association. It interprets EU law to mean that customers must be informed of any changes two months before they come into effect and, more importantly, that changes be communicated to customers on ‘durable media’.

The bank claims to be doing nothing wrong. It points out that the BAWAG-customer mailbox allows consumers to consult the new terms and conditions by downloading them, and then consumers can then print them out on to durable media.

Litigation has now spiralled up to the Austrian Supreme Court which, not knowing how to interpret EU law correctly, has decided to make a preliminary reference to the CJEU.

At the Austrian Supreme Court
The dispute involves the interpretation of four pieces of EU consumer legislation plus the ‘Content Services’ judgment of the CJEU.

The first plank of EU legislation mentions the concept of a ‘durable medium’. It is the EU’s now-defunct ‘distance contracts’ Directive 97/7/EC. Article 5(1) on ‘Written confirmation of information’ provides:

1. The consumer must receive written confirmation or confirmation in another durable medium available and accessible to him of the information referred to in Article 4 (1) (a) to (f), in good time during the performance of the contract, and at the latest at the time of delivery where goods not for delivery to third parties are concerned, unless the information has already been given to the consumer prior to conclusion of the contract in writing or on another durable medium available and accessible to him.
In any event the following must be provided:
– written information on the conditions and procedures for exercising the right of withdrawal, within the meaning of Article 6, including the cases referred to in the first indent of Article 6 (3),
– the geographical address of the place of business of the supplier to which the consumer may address any complaints,
– information on after-sales services and guarantees which exist,
– the conclusion for cancelling the contract, where it is of unspecified duration or a duration exceeding one year.

The key point to be taken from this first Directive is that the concept of a ‘durable medium’ covered computer hardware such as CD-Roms, floppy-disks, and USB sticks.

The second piece of EU legislation relevant to the BAWAG dispute is the EU’s ‘eCommerce’ Directive 2000/31/EC on certain legal aspects of information society services, in particular electronic commerce, in the Internal Market (OJ [2000] L178/1).

Introduced to remove barriers to eCommerce, the relevant rule is in Article 11 which governs the ‘Placing of the order’ and provides:

1. Member States shall ensure, except when otherwise agreed by parties who are not consumers, that in cases where the recipient of the service places his order through technological means, the following principles apply:
– the service provider has to acknowledge the receipt of the recipient’s order without undue delay and by electronic means,
– the order and the acknowledgement of receipt are deemed to be received when the parties to whom they are addressed are able to access them.

2. Member States shall ensure that, except when otherwise agreed by parties who are not consumers, the service provider makes available to the recipient of the service appropriate, effective and accessible technical means allowing him to identify and correct input errors, prior to the placing of the order.

3. Paragraph 1, first indent, and paragraph 2 shall not apply to contracts concluded exclusively by exchange of electronic mail or by equivalent individual communications.

The key point is in the second indent to subsection 1 plus subsection 3 and those provisions stress the importance of direct access by the user. A supplementary point here is that when the Austrian legislature implemented the Directive, the scope of the definition was expanded to cover all electronic communications (an expansion subsequently reaffirmed by the case law of the Austrian Supreme Court in respect of, for example, Emails).

The third piece of EU legislation relevant to the present BAWAG dispute is the EU’s ‘consumer rights’ Directive 2011/83/EU, amending Council Directive 93/13/EEC and Directive 1999/44/EC of the European Parliament and of the Council and repealing Council Directive 85/577/EEC and Directive 97/7/EC [OJ [2011] L304/64].

This legislation also mentions the concept of a ‘durable medium’. Article 2 (10) defines it to mean:

“durable medium” means any instrument which enables the consumer or the trader to store information addressed personally to him in a way accessible for future reference for a period of time adequate for the purposes of the information and which allows the unchanged reproduction of the information stored;

It is a definition accompanied by some further explanation in Recital 23:

Durable media should enable the consumer to store the information for as long as it is necessary for him to protect his interests stemming from his relationship with the trader. Such media should include in particular paper, USB sticks, CD-ROMs, DVDs, memory cards or the hard disks of computers as well as e-mails.

Thus, the key point to emerge from the consumer rights legislation is the importance which is attached to the fact that data can be stored electronically, and made available electronically, for example by printing it out.

However, the concept of a ‘durable medium’ has also been recently interpreted by the CJEU in Case C-49/11, Content Services (judgment of Third Chamber, 5 July 2012). This case, also originating from the Austrian courts, concerned the old and now defunct ‘distance contracts’ Directive 97/7/EC. The issue was whether a consumer could be said to have received information when a supplier had merely provided a hyperlink on its website.

The CJEU in that case believed that a website could be a durable data carrier.
However, when it came to information being provided via a hyperlink, the CJEU also went on to hold that:

Article 5(1) of Directive 97/7/EC of the European Parliament and of the Council of 20 May 1997 on the protection of consumers in respect of distance contracts must be interpreted as meaning that a business practice consisting of making the information referred to in that provision accessible to the consumer only via a hyperlink on a website of the undertaking concerned does not meet the requirements of that provision, since that information is neither “given” by that undertaking nor “received” by the consumer, within the meaning of that provision, and a website such as that at issue in the main proceedings cannot be regarded as a “durable medium” within the meaning of Article 5(1).

The fourth and final piece of EU legislation relevant to the BAWAG-dispute is the EU’s ‘payment services’ Directive 2007/64/EC, which repealed Directive 97/5/EC (OJ [2007] L319/1).

The concept of the ‘durable medium’ reappears in Article 41 of the ‘payment services’ Directive and provides:

Prior general information
1. Member States shall require that, in good time before the payment service user is bound by any framework contract or offer, the payment service provider provide the payment service user on paper or on another durable medium with the information and conditions specified in Article 42. The information and conditions shall be given in easily understandable words and in a clear and comprehensible form, in an official language of the Member State where the payment service is offered or in any other language agreed between the parties.

2. If the framework contract has been concluded at the request of the payment service user using a means of distance communication which does not enable the payment service provider to comply with paragraph 1, the payment service provider shall fulfil its obligations under that paragraph immediately after the conclusion of the framework contract.

3. The obligations under paragraph 1 may also be discharged by supplying a copy of the draft framework contract including the information and conditions specified in Article 42.

That said, the concept of the ‘durable medium’ also appears in Article 36 in the context of making information available:

Prior general information
1. Member States shall require that before the payment service user is bound by any single payment service contract or offer, the payment service provider, in an easily accessible manner, makes available to the payment service user the information and conditions specified in Article 37. At the payment service user’s request, the payment service provider shall provide the information and conditions on paper or on another durable medium. The information and conditions shall be given in easily understandable words and in a clear and comprehensible form, in an official language of the Member State where the payment service is offered or in any other language agreed between the parties.

The Austrian Supreme Court is struggling with how to interpret these Articles of the ‘payments’ Directive when the relevant Recitals appear slightly contradictory when it comes to: an electronic mailbox, an electronic mailbox in the context of eBanking, and the act of clicking on icons. The relevant Recitals provide:

(23) The information required should be proportionate to the needs of users and communicated in a standard manner. However, the information requirements for a single payment transaction should be different from those of a framework contract which provides for the series of payment transactions.

(24) In practice, framework contracts and the payment transactions covered by them are far more common and economically important than single payment transactions. If there is a payment account or a specific payment instrument, a framework contract is required. Therefore, the requirements for prior information on framework contracts should be quite comprehensive and information should always be provided on paper or on another durable medium, such as printouts by account printers, floppy disks, CD-ROMs, DVDs and hard drives of personal computers on which electronic mail can be stored, and Internet sites, as long as such sites are accessible for future reference for a period of time adequate for the purposes of information and allow the unchanged reproduction of the information stored. However, it should be possible for the payment service provider and the payment service user to agree in the framework contract on the manner in which subsequent information on executed payment transactions is given, for instance, that in Internet banking all information on the payment account is made available online.

(25) In single payment transactions only the essential information should always be given on the payment service provider’s own initiative. As the payer is usually present when he gives the payment order, it is not necessary to require that information should in every case be provided on paper or on another durable medium. The payment service provider may give information orally over the counter or make it otherwise easily accessible, for example by keeping the conditions on a notice board on the premises. Information should also be given on where other more detailed information is available (e.g. the address of the website). However, if the consumer so requests, the essential information should be given on paper or on another durable medium.

(26) This Directive should provide for the consumer’s right to receive relevant information free of charge before he is bound by any payment service contract. The consumer should also be able to request prior information as well as the framework contract, on paper, free of charge at any time during the contractual relationship, so as to enable him to compare payment service providers’ services and their conditions and in case of any dispute verify his contractual rights and obligations. Those provisions should be compatible with Directive 2002/65/EC. The explicit provisions on free information in this Directive should not have the effect of allowing charges to be imposed for the provision of information to consumers under other applicable Directives.

(27) The way in which the required information is to be given by the payment service provider to the payment service user should take into account the needs of the latter as well as practical technical aspects and cost-efficiency depending on the situation with regard to the agreement in the respective payment service contract. Thus, this Directive should distinguish between two ways in which information is to be given by the payment service provider: either the information should be provided, i.e. actively communicated by the payment service provider at the appropriate time as required by this Directive without further prompting by the payment service user, or the information should be made available to the payment service user, taking into account any request he may have for further information. In the latter case, the payment service user should take some active steps in order to obtain the information, such as requesting it explicitly from the payment service provider, logging into bank account mail box or inserting a bank card into printer for account statements. For such purposes the payment service provider should ensure that access to the information is possible and that the information is available to the payment service user.

In essence, the Austrian Supreme Court would like to know whether in the context of online banking, Article 41 of the payments Directive 2007/64 (when read together with Article 36(1) of that Directive), should be interpreted to mean that when a bank communicates information in electronic form via a customer’s mailbox – whereby the customer after having logged in on the bank’s e-banking website can click to download that information – it can be said that the customer has been supplied with that information on a durable medium?

And if the answer to that question is no, there is no communication on a durable medium, then: are those provisions to be interpreted in this case to mean that (a) the information may well be being provided on a durable medium but this has not been communicated to the customer and so has only been made available to him; or (b) that this is a situation in which the information has only been made available to him but without the use of a durable medium?

Questions Referred
The official translation of the questions asked by the Austrian Supreme Court has not yet been published on the Curia website.

Update – 26 October 2015
The official translation of the questions asked has been published in today’s Official Journal (C354/15), and reads:

1. Is Article 41(1) in conjunction with Article 36(1) of Directive 2007/64/EC […] on payment services in the internal market (‘the Payment Services Directive’) to be interpreted as meaning that information (in electronic format) transmitted by the bank to the e-mail inbox of the customer as part of online banking (eBanking), so that the customer can retrieve this information by clicking on it after logging in to the eBanking website, has been provided on a durable medium?

2. If the answer to Question 1 is in the negative:
Is Article 41(1) in conjunction with Article 36(1) of the Payment Services Directive to be interpreted as meaning that in such a case

(a) the information from the bank is indeed provided on a durable medium, but not notified to the customer, merely made accessible to him, or

(b) all that happens is that the information is made accessible without the use of a durable medium?