CJEU, judgment of 1 October 2015, C-230/14, Weltimmo

1. Overview

A company established in Slovakia operated a website for the brokerage of real estate that was directed at the Hungarian market and, in doing so, processed personal data of the advertisers. The Court had to clarify under what conditions the data protection law of a Member State applies by reference to the place of establishment.

Reference: CJEU, judgment of 1 October 2015, C-230/14, Weltimmo

2. Broad concept of an establishment

The concept of an establishment is to be interpreted broadly and on the basis of a flexible, non-formalistic conception. It covers any real and effective activity exercised through stable arrangements, even where that activity is minimal. The legal form of the arrangement, entry in a register and whether it constitutes a legal person are all irrelevant. What is required is an interplay of human and technical resources with a certain degree of stability.

3. Relevant indications in the case

The Court held that a relevant activity was being exercised because the operator had appointed a representative in the Member State concerned who negotiated with customers about outstanding debts, because it ran a website in the national language and because it maintained a bank account for the recovery of debts as well as a letter box. It follows that, depending on the nature of the activity, the presence of a single representative may already suffice. Conversely, a mere server, a letter-box company or the mere accessibility of a website do not in themselves constitute an establishment.

4. Significance for Article 3(1) GDPR

The decision shapes the understanding of the establishment criterion, which is carried over into Article 3(1) GDPR. It shows that even a minimal but real activity in a Member State may bring the territorial scope into play.

5. Limits of the supervisory powers

At the same time, the Court emphasized the limits of the powers of national supervisory authorities: a supervisory authority may impose penalties only within the territory of its own Member State.