Towards an Informed Choice of Law? - Interdependencies between Substantive and Procedural Means of Consumer Protection in Private International Law

• Applicant: Dr. Nicholas Mouttotos
• Subject Area: Private Law
• Term: from 2021 to 2025
• Project identifier: Deutsche Forschungsgemeinschaft (DFG) - Project number 445777127

The growing power of big enterprises and their omnipresence in people’s lives is debated especially regarding the appropriate forms of regulation. The regulatory framework focuses on the application of competition law, privacy protection, and consumer protection. Discussions in the United States held between lawmakers and Big Tech companies dealing with the latter’s ability to track its’ users locations on smartphones even when they have opted out of location services focused on the introduction of transparency forcing mechanisms, i.e. the company providing a notice. Likewise, the EU General Data Protection Regulation in its effort to protect consumer privacy emphasizes notice and consent as a central feature. The importance of party consent from a private and consumer law perspective, interpreted as the contractual intention to be legally bound, has, thus, increased. In contracts involving a sophisticated and unsophisticated party in terms of legal knowledge applied in forming the contract, the sophisticated party is usually the one doing all the legal planning. Such a scenario can lead to the fulfillment of one party’s expectations, i.e. the sophisticated party. This societal and economic problem has been considered throughout the decades when general terms and conditions began to be widely utilized. In terms of contract law, it is seen as inconsistent with general principles requiring meaningful consent and negotiation from both parties. The balance that should be set is between the consumer’s need for protection and the business’ need to be able to conduct its operations in an effective manner. With the rise of e-commerce, consumers usually enter into agreements by simply clicking the 'Agree' button. Dispute resolution agreements (DRA), i.e. agreements enabling parties to choose the forum and law governing their contract may be part of these non-negotiated click-wrap agreements. When is consent binding in such cases? The Court of Justice of the EU applied the principle of transparency to a standard form DRA finding a failure to inform the consumer on the part of the business. This research project examines the extent and implementation of a duty to inform consumers in plain language about DRAs examining the previously established position in private international law drawing also on established principles of informed consent in other areas such as consumer contracts, data protection, and financial markets law, as well as on the economic theory of informed choice and its limits. The issue of party autonomy (the freedom to choose the applicable law or forum) in consumer contracts has been complicated further due to the judgment of the CJEU. This research project will be an attempt to clarifying this area of the law and offer empirical evidence as to the changes that the judgment has brought about. Additionally, it will be a modest attempt in contributing to the post-national academic debate about the proper normative paradigm in consumer law.

• DFG Programme: WBP Position