A recent judgment by the German Federal Court of Justice paves the way for forum shopping in abuse of dominance cases[1]. Following the European Court of Justice’s Wikingerhof decision, the Federal Court of Justice has clarified that tort jurisdiction may apply even if the conduct in dispute is covered by contractual provisions. In addition, the Federal Court of Justice has confirmed the restrictive interpretation of generic choice-of-forum clauses of the sort that is often found in general terms and conditions. Taken together, this means that claimants will find it considerably easier to sue in their home jurisdictions.
As the first decision applying the Wikingerhof guidelines, the judgment deserves a closer look.
1. Factual background
The claimant, a hotel in northern Germany, is suing a Dutch hotel booking platform for alleged abuse of dominance. The platform’s practices in dispute include (i) advertising prices as discount prices without the claimant’s consent, (ii) restricting the communication between hotels and customers, and (iii) sorting search results by the amount of the commission that the hotels pay the platform. These practices have been explicitly mentioned (and approved) in the hotels’ contracts with the platform. Moreover, the platform’s general terms and conditions include a clause granting exclusive jurisdiction to the Dutch courts “for all disputes arising from the contract”.
2. First and second instance reject jurisdiction (choice-of-forum clause / narrow interpretation of tort jurisdiction)
To enforce its presumed rights, claimant nevertheless took the platform to court in Germany, relying on Art. 7 (2) of Regulation (EU) No 1215/2012 (“Brussels Ia”): “A person domiciled in a Member State may be sued in another Member State (…) in matters relating to tort, delict or quasi-delict, in the courts for the place where the harmful event occurred”.
Both the Regional Court of Kiel and the Court of Appeals in Schleswig dismissed the claim for lack of jurisdiction[2]. The Regional Court held that the platform’s choice-of-forum clause was valid and binding and applicable to the dispute at issue, and therefore overrode Art. 7 (2).
The Court of Appeals held that Art. 7 (2) did not apply in the first place. Referring to case law by the ECJ which supports a generally narrow interpretation of Art. 7 (2)[3], the court ruled that Art. 7 (2) does not apply in cases where the presumed tort claim results from a contractual relationship – as the court found was the case here.
3. Federal Court of Justice accepts jurisdiction despite choice-of-forum clause
In its appeal to the Federal Court of Justice, claimant specifically targeted the notion that its claims were contractual in nature, arguing that the contractual provisions themselves were the result of an abuse of dominance. In such a case – claimant said – Art. 7 (2) does apply. As this matter concerned the interpretation of EU law, the Federal Court of Justice referred it to the ECJ.
The ECJ in turn provided the following guidelines for delineating the scope of Art. 7 (2): (i) If a court – in order to establish the (un)lawful nature of the conduct in dispute – has to interpret the contract, then the matter is one “relating to a contract” as per Art. 7 (1). (ii) If, in contrast, the (un)lawful nature can be established without interpreting the contract, the matter is one “relating to tort” as per Art. 7 (2)[4].
This issue being settled, the Federal Court of Justice was now in a position to address the obstacles which claimant had failed to clear at the lower courts. First, the court applied the ECJ’s guidelines, and concluded that the (un)lawful nature of the platform’s practices could be established without interpreting the contract, strictly by applying German statutory competition law. Specifically, the (un)lawful nature solely depended on (i) whether the platform had a market dominant position and (ii) whether it abused that position. In this respect, there was no need for interpreting the contract. Therefore, the court found Art. 7 (2) to be applicable.
Second, the Federal Court of Justice analyzed whether the platform’s choice-of-forum clause compelled claimant to seek recourse at the Dutch courts instead. The court held that this was not the case. Referring to the ECJ’s judgment re CDC Hydrogen Peroxide (concerning cartel damage claims)[5], the court decided that a choice-of-forum clause applies to abuse of dominance claims only if there are clear indications that the parties had intended such a wide scope. In the present case, there were no such indications; rather, the clause was limited to “disputes arising from the contract“. A later version of the clause, which may or may not have extended the scope, had not been validly agreed upon between the parties.
On this basis, the Federal Court of Justice held that German courts do indeed have jurisdiction over the matter, and referred the case back to the Court of Appeals.
4. Conclusion
The judgment has the potential to act as an accelerator for private enforcement in abuse of dominance cases, by providing claimant-friendly guidance on the application of Art. 7 (2). As it is based on the ECJ’s Wikingerhof decision, it is likely that other European courts will by and large come to the same conclusions.
This, in turn, makes it harder for market dominant players to focus jurisdiction for potential lawsuits at specific courts. As tort jurisdiction in antitrust law applies wherever an antitrust violation has an effect, market dominant players may well find themselves at risk of having to fight lawsuits all over the European Union. To mitigate this risk, they should at least consider to adapt their choice-of-forum clauses by broadening their scope.
[1] Federal Court of Justice, judgment of 10 February 2021, KZR 66/17.
[2] Judgments of 27 January 2017, 14 HKO 108/15 Kart, and 12 October 2017, 16 U 10/17 Kart.
[3] Judgment of 28 January 2015 – C-375/13 (Kolassa/Barclays Bank plc).
[4] European Court of Justice, judgment of 24 November 2020, C-59/19.
[5] European Court of Justice, judgment of 21 May 2015, C-352/13.
