Transnational Consumer Law-Reality or Fiction?

Penn State International Law Review Volume 27 Number 3 Penn State International Law Review Article 17 5-1-2009 Transnational Consumer Law-Reality or Fiction? Norbert Reich Follow this and additional works at: http://elibrary.law.psu.edu/psilr Part of the International Law Commons Recommended Citation Reich, Norbert (2009) "Transnational Consumer Law-Reality or Fiction?," Penn State International Law Review: Vol. 27: No. 3, Article 17. Available at: http://elibrary.law.psu.edu/psilr/vol27/iss3/17 This Article is brought to you for free and open access by Penn State Law eLibrary. It has been accepted for inclusion in Penn State International Law Review by an authorized administrator of Penn State Law eLibrary. For more information, please contact . Transnational Consumer Law-Reality or Fiction? Norbert Reich* I. BEYOND SPACE AND TIME: CYBER LAW The traditional legal mechanisms of consumer protection are usually limited to national law and, to some extent, to the law of supranational organisations like the European Union ("EU"). There may be trends to extend the sphere of application or to make sure that EU nationals can always refer to the protection of their home country, but this will be difficult to implement in a globalised market with transactions easily crossing borders, especially by the use of the internet. This is particularly obvious in cases of software transactions: there is not a national marketplace, only a virtual marketplace, not determined by space and time. The partners may not know each other's residence, only their IP address; the payment and the download-delivery is done via the internet, without any personal contact of the parties being a necessary or usual prerequisite of the transaction. It seems impossible or at least very complicated under existing conflict rules to determine jurisdiction and applicable law.' International uniform laws like the Convention for the Sale of Goods ("CSIG") ratified by most States (with the exception of the United Kingdom, Portugal and Ireland) exclude consumer transactions "unless the seller.., neither knew or ought to have known that the goods were bought for (personal, family or household) use" (Article 2a) and are not * This article is part of a greater study on "Crisis and Future of European Consumer Law," published in the British Yearbook of Consumer Law, 2008/2009, at 365. See also my earlier paper in the 2008 edition of the Uniform Commercial Code Law Journal,at pages 67 to 77. 1. There is abundant literature of this phenomenon. See HANS MICKLITZ, NORBERT REICH & PETER RoTT, UNDERSTANDING EUROPEAN CONSUMER LAW ch. 7 (2008). In UnderstandingEuropean Consumer Law, the authors discuss the practical application of the consumer protection provisions of Article 5 the Rome Convention, Article 6 of the new Regulation (EC) No. 593/2008 of the EP and the Council of 17 June 2008 on the law applicable to contractual obligations ("Rome F'), 2008 O.J. (L 176), 6, and of specific EC directives to cross-border transactions. PENN STATE INTERNATIONAL LAW REVIEW [Vol. 27:3,4 mandatory in their legal application according to Article 6.2 They are therefore not appropriate for cross-border consumer transactions. Other soft-law initiatives like the UNIDROIT-principles 3 are limited to commercial transactions and while the Principles of European Contract Law contain some rather weak consumer protection provisions 4 they are applicable (if at all) only to transactions within the EU. Both are without prejudice to mandatory consumer protection law. The globalisation of trade in consumer markets, in particular via the internet, has not generated a globalisation of law. "Cyber law" is still an empty catchword without a supportive legal framework that would force transactions via e-commerce into the national legal system. In any event, the national legal system is not adequate any more for these transactions. The World Trade Organisation ("WTO") has not yet emerged as an actor in transnational private law or, in particular, consumer law, with the exception of intellectual property via the TRIPS agreement. 5 This is due to the WTO's mostly "negative" impact on national (and supranational) law: it is concerned with impediments to international trade mostly by product-related regulations which cannot be justified by mandatory and proportionate public interests like health or safety.6 Therefore, the WTO does not have jurisdiction for setting mandatory standards for international commercial and consumer transactions, including conflict resolution. II. CONSUMER LAW AS IMPEDIMENT TO E-COMMERCE? Some authors go even further in their critique. Consumer law (in the narrow sense as used by the EU or in a broader sense as advocated here) is always based on mandatory standards, such as information, 2. JAN RAMBERG, INTERNATIONAL COMMERCIAL TRANSACTIONS 25 (3d ed. 2004); U. Magnus, in A. STAUDINGER, CISG IN BGB-KOMMENTAR art. 2, paras. 10-31 (13 ed. 2005). 3. Michael Joachim Bonell, The UNIDROIT Principlesand TransnationalLaw, in THE PRACTICE OF TRANSNATIONAL LAW 23 (K.P. Berger ed., 2001); Michael Joachim Bonell & R. Peleggi, UNIDROIT Principles of InternationalCommercial Contracts and Principles of European Contract Law: A Synoptical Table, 2004 UNIFORM L. REV. 31596 (comparing the Unidroit principles with the Principles of European Contract Law (Lando-Principles)). 4. Hans-W. Micklitz, The Principlesof European ContractLaw and the Protection of the Weaker Party, 27 J.CONSUMER POL'Y 339-56 (2004). 5. Railf Michaels & Nils Jansen, Private Law Beyond the State? Europeanisation, Globalisation,and Privatisation,54 AM. J. COMP. L. 843, 867 (2006). 6. For details, see HANS-W. MICKLITZ, INTERNATIONALES PRODUKTSICHERHEITSRECHT 257 (1995) (arguing it should be transformed into a "human right of safety." See also WTO - TECHNICAL BARRIERS AND SPS MEASURES 96-120 (R. Wolfrum et al. eds., 2007) (providing a detailed commentary on the clause concerning actions "necessary to protect human, animal or plant life or health" of Art. XX (b) GATT and related agreements). TRANSNATIONAL CONSUMER LAW 20091 quality, fairness in pre-formulated contract terms, adequate remedies, non-discrimination rules, and access to justice. This entire complex of protection is vested upon a functioning state legal order which makes the judge the final arbiter in consumer disputes. Law is state-oriented and guaranteed. In the EU, this follows the fundamental right to judicial protection under Article 6 of the European Convention of Human Rights ("ECHR"), confirmed on many occasions by the European Court of Justice ("ECJ") 7 and to be included in Article 6 of the Lisbon Treaty on European Union integrating the Charter of Fundamental Rights in the EU and in particular Article 47 on judicial protection into EU law. In its numerous cases concerning the obligations of Member States to implement and enforce Community consumer law, the Court has insisted on this obligation de r~s (...truncated)