The Court of Justice of the EU (‘CJEU’) has held that an exclusive choice of forum clause can validly be imposed by so-called “click-wrap” contracts in online B2B transactions (see Case C‑322/14, El Majdoub v. CarsOnTheWeb.Deutschland GmbH).   The ruling will make it easier for online businesses in the EU to impose a favorable choice of forum in their online B2B contracts, ensuring that they can sue defendants in courts of their own choosing, rather than the defendants’ local courts.

The general EU-wide rule for B2B contractual disputes is that a defendant must be sued in its local courts only (see “Brussels I” Regulation (Regulation (EC) No 44/2001)).  However, parties can waive the default rule by agreement “in writing” (Article 23(1)).

To deal with contracts concluded electronically, Article 23(2) states – in the English version of the law – that any “electronic communication” that “provides” a durable record of the agreement is equivalent to “writing”; the French and German versions refer to the mere “possibility” of a durable record being formed.

There has been some uncertainty as to whether mere hyperlinking to terms and conditions is a “communication”.  The case before the Court focused on this point, with the claimant arguing that the relevant terms and conditions should at least have been displayed (automatically) before they placed their order.

Taking a pragmatic view, the CJEU stated that the requirements of Article 23 are met if it is possible to print and save the text of online terms and conditions before a contract is concluded – even if the contractual terms are never actually displayed to the person accepting them.  Providing a hyperlink to a printable version suffices.

Although the Brussels I Regulation has been phased out (as of January 10th, 2015, in favor of the ‘recast’ “Brussels Ia” Regulation (Regulation (EU) No 1215/2012)), it is likely that the CJEU’s ruling in El Majdoub will equally apply to the new law, given that the relevant provisions of the new law (now contained in Article 25) are in effect identical to those in Article 23 of the original.

It is important to note that the scope of this ruling is limited to B2B disputes, and forum selection clauses specifically.  In respect of consumer (B2C) contracts, the Brussels I and Ia Regulations generally do not allow businesses to restrict a consumer’s choice of courts.

Also, the CJEU’s earlier judgment in Case C‑49/11 Content Services has already determined that ‘click-wraps’ did not satisfy more general legal requirements for online consumer contracts under Article 5(1) of the Distance Selling Directive (Directive 97/7/EC), since mandatory information about contract terms simply made available via a hyperlink is neither “given” by the service provider nor “received” by the consumer.

However, that Directive has now been superseded by the Consumer Rights Directive (Directive 2011/83/EU).  The new law’s relevant provisions have been worded differently to the Distance Selling Directive; there is therefore some doubt as to whether the Content Services ruling may apply by analogy to B2C click-through contracts concluded under the new law.

Photo of Mark Young Mark Young

Mark Young, an experienced tech regulatory lawyer, advises major global companies on their most challenging data privacy compliance matters and investigations.

Mark also leads on EMEA cybersecurity matters at the firm. He advises on evolving cyber-related regulations, and helps clients respond to…

Mark Young, an experienced tech regulatory lawyer, advises major global companies on their most challenging data privacy compliance matters and investigations.

Mark also leads on EMEA cybersecurity matters at the firm. He advises on evolving cyber-related regulations, and helps clients respond to incidents, including personal data breaches, IP and trade secret theft, ransomware, insider threats, and state-sponsored attacks.

Mark has been recognized in Chambers UK for several years as “a trusted adviser – practical, results-oriented and an expert in the field;” “fast, thorough and responsive;” “extremely pragmatic in advice on risk;” and having “great insight into the regulators.”

Drawing on over 15 years of experience advising global companies on a variety of tech regulatory matters, Mark specializes in:

  • Advising on potential exposure under GDPR and international data privacy laws in relation to innovative products and services that involve cutting-edge technology (e.g., AI, biometric data, Internet-enabled devices, etc.).
  • Providing practical guidance on novel uses of personal data, responding to individuals exercising rights, and data transfers, including advising on Binding Corporate Rules (BCRs) and compliance challenges following Brexit and Schrems II.
    Helping clients respond to investigations by data protection regulators in the UK, EU and globally, and advising on potential follow-on litigation risks.
  • GDPR and international data privacy compliance for life sciences companies in relation to:
    clinical trials and pharmacovigilance;

    • digital health products and services; and
    • marketing programs.
    • International conflict of law issues relating to white collar investigations and data privacy compliance.
  • Cybersecurity issues, including:
    • best practices to protect business-critical information and comply with national and sector-specific regulation;
      preparing for and responding to cyber-based attacks and internal threats to networks and information, including training for board members;
    • supervising technical investigations; advising on PR, engagement with law enforcement and government agencies, notification obligations and other legal risks; and representing clients before regulators around the world; and
    • advising on emerging regulations, including during the legislative process.
  • Advising clients on risks and potential liabilities in relation to corporate transactions, especially involving companies that process significant volumes of personal data (e.g., in the adtech, digital identity/anti-fraud, and social network sectors.)
  • Providing strategic advice and advocacy on a range of EU technology law reform issues including data privacy, cybersecurity, ecommerce, eID and trust services, and software-related proposals.
  • Representing clients in connection with references to the Court of Justice of the EU.
Photo of Phil Bradley-Schmieg Phil Bradley-Schmieg

Philippe Bradley-Schmieg’s practice covers a range of commercial, regulatory and intellectual property matters affecting the IT, e-health, internet media and telecoms sectors, often with a multi-jurisdictional scope.  He advises on intellectual property, compliance and policy matters such as online consumer rights, liability for…

Philippe Bradley-Schmieg’s practice covers a range of commercial, regulatory and intellectual property matters affecting the IT, e-health, internet media and telecoms sectors, often with a multi-jurisdictional scope.  He advises on intellectual property, compliance and policy matters such as online consumer rights, liability for third party content, patent, copyright and database right licensing, privacy and data protection, medical confidentiality, cybersecurity, data breach responses, and law enforcement data disclosure.  Mr. Bradley-Schmieg advises on UK, EU and international law, and has worked in London and Brussels.