News Archives

Sunday, November 29, 2015

Weltimmo: Another Landmark CJEU Decision

The stunning character of the Schrems decision overshadowed another major decision of the Court of Justice of the European Union, one that has profound implications for multi-national and Internet companies operating in multiple EU member states.  Ruling in the case of  Weltimmo s.r.o. v NemzetiAdatvédelmi és Információszabadság Hatóság, the CJEU found that a company has an “establishment” in a member state if it exercises a real and effective activity, even if only a minimal one, through stable arrangements, in that state.  Applying this test, the Court found that if Weltimmo, a Slovakian-registered company, had a website targeting the country in the Hungarian language, as well as a legal representative, letter box and bank account all located in Hungary, then it would be established in Hungary and subject to the requirements of Hungarian data protection law.  

The ruling severely undercuts the strategy of companies that have located their European headquarters in member states such as Ireland that are known to be very permissive in their enforcement of data protection law.  Such companies, with Facebook being a leading example, have claimed that the only member state law to which they must adhere is that of the state in which they have their headquarters, regardless of their activities in other member states.  Such an argument would be untenable under the new General Data Protection Regulation; it is now untenable under the old Data Protection Directive as well.

No comments:

Post a Comment