Austria: A "class action" through the back door?

Claim for removal instead of a redress action? 

In accordance with Section 15 UWG, an unlawful situation can be eliminated with a claim for removal. The entities entitled to bring claims under Section 14 UWG (e.g. the Federal Chamber of Labour) – which are by law mostly Qualified Entities under the Collective Redress Directive but not vice versa – may assert this right alongside an injunction claim according to Section 28 Consumer Protection Act (Konsumentenschutzgesetz – KSchG). In proceedings concerning unlawful contractual clauses initiated by such entities, this means that not only prohibition of the clauses but also a claim for removal (of respective consequences) may be sought.

Disclosure of consumer data?

In its decision 69 Cg 106/23x in proceedings initiated by the Austrian Federal Chamber of Labour, the Innsbruck Regional Court found that the use of clauses in general terms and conditions that are contrary to public policy and unlawful not only gives rise to an injunction claim under Section 28 KSchG but also constitutes a violation of Section 1 UWG. It further held that a removal claim under Section 15 UWG would also be available in order to individually notify the consumers who had concluded the relevant contracts (specifically, by requiring disclosure of the contact details of the affected consumers). The standard publication of a judgement alone would not suffice.

To the surprise of many, the Vienna Higher Regional Court went one step further in the summer of 2024 by not only affirming the right to notify individual consumers in  proceedings concerning unlawful contractual clauses initiated by the Chamber of Labour but also a right to reimbursement.

The Supreme Court takes a restrictive approach

In 4 Ob 184/24y (decision concerning T&C's of a fitness studio), the Supreme Court dismissed the (additional) relief sought of informing all consumers about the judgement in question and notifying them of their right to reclaim amounts that had been wrongfully collected. The relief sought was considered too vague as it remained unclear which particular consumers were affected and in which cases excessive amounts had actually been collected (without explicit and voluntary consent). The relief sought was not considered enforceable since it remained unclear when the elimination of the unlawful situation sought by the judgement would actually be achieved.

The Supreme Court expressly left open whether and under what conditions Section 15 UWG can give rise to a claim for the removal of respective consequences in the form of an obligation to notify or reimburse consumers. The Supreme Court also ruled similarly in a parallel case (4 Ob 180/24k).

In 4 Ob 51/25s and 9 Ob 43/25a, the Supreme Court also found the relief sought to be too vague and unsuitable for enforcement proceedings.

Why not simply file a redress action?

Austria transposed the Collective Redress Directive into national law (Collective Redress Directive Amendment; Verbandsklagen-Richtlinie-Umsetzungs-Novelle – VRUN) in 2024, albeit after considerable delay. It is questionable why the Federal Chamber of Labour prefers to enforce rights for removal under Section 15 UWG instead of simply filing an action for redress, which it is entitled to do under VRUN.

One assumption could be that VRUN is open to interpretation at many points and that the duration of the proceedings may well be protracted due to the three-phase procedure. However, it is also possible that the hurdles for a redress action are ultimately too high.

Indeed, the Supreme Court recently ruled in 9 Ob 111/25a that a redress action must contain a precisely formulated claim for redress on behalf of at least 50 consumers against the same trader based on essentially similar factual circumstances and must set out briefly and completely the facts on which the main and ancillary claims are based. Whether "essentially similar factual circumstances" actually exist must be examined as a question of law on the basis of the claimant's specific pleadings. For this purpose, it would be sufficient if the claims in the action are substantiated to the extent that they contain those facts and offers of evidence that are accessible with reasonable effort to the qualified entity bringing the action and that adequately support the plausibility of the claims.

In the case at hand, the Supreme Court found the submissions of the qualified entity insufficient to allow a review of whether essentially similar factual circumstances existed. This is because no specific allegations were made in the proceedings as to the extent to which the objective contractual situation of the consumers is identical and to what extent it differs. Only a single contract was submitted as evidence of the allegations, and even this was only introduced for the first time in the appeal on points of law.

A further reason for choosing the removal claim over a redress action may be the goal of proactively contacting not only those consumers who had previously registered with the qualified entities but all other affected consumers as well. Effectively an opt-in solution through the back door.

A look across the border

The German Federal Court of Justice largely rejected the possibility of a consumer association demanding the repayment of unlawfully withheld amounts to all affected consumers by way of a removal claim under Section 8(1) sentence 1 of the German Act against Unfair Competition. The court found that the removal claim serves to eliminate ongoing unlawful situations but not to compensate individual financial losses. Moreover, collective redress provides other instruments for such cases (e.g. a redress action or a model declaratory action) but not a payment claim independent of fault in favour of consumers asserted by an association. Such a claim would be too vague because neither the affected consumers nor the exact amounts could be specified precisely in the judgment. However, the unlawful situation may be eliminated by informing consumers of their rights.

Conclusion

Both the German Federal Court of Justice and the Austrian Supreme Court follow a restrictive approach. A collective reimbursement claim is rejected, particularly where the affected consumers and the relevant amounts cannot be precisely determined. While the German court clearly settled the fundamental question, the Austrian Supreme Court has so far left it open; although the practical enforceability of such claims is constrained by high requirements as to specificity and the existence of a clear violation of the Act against Unfair Competition. Both courts consider that collective redress should be pursued through instruments other than a removal claim under unfair competition law.

Practical guidance

·         To succeed with a removal claim, the relief sought must be sufficiently specific to be enforceable, although defining the group of affected consumers may prove difficult.

·         Furthermore, bringing a redress action is no guarantee of success. The "essentially similar factual circumstances" will continue to remain the pivotal issue.

authors: Sara Khalil, Manuela Zimmermann