Opinion ID: 6976543
Heading Depth: 2
Heading Rank: 2

Heading: Relevant Laws and Regulations' in France & the European Union

Text: On January 6,1978, the French legislature enacted the Data Processing and Individual Rights Law (the “Data Processing Act”). The Data Processing Act created La Corn-mission Nationale de lTnformatique et des Libertés, or the Data Processing and Individual Rights National Commission (the “CNIL”), an independent government agency that regulates public and private data processing activities. The Data Processing Act also sets forth substantive and procedural rules and principles regarding the processing of personal data. For example, pursuant to Article 26 of the Data Processing Act, any individual may refuse, for legitimate reasons, to allow personal data bearing on him or her to be computer processed. Breach of these provisions is punishable under the French Penal Code. Consistent with the above, French law permits residents of France to block inclusion of their names on commercial mailing lists. By decree dated October 12, 1989, as amended on December 29, 1990, Article R. 10-1 of France’s Postal and Telecommunications Code (“PTT Code”), provides that: All individuals ... may ... request, without being liable to pay any supplementary fee, not to appear on the lists extracted from the telephone book and marketed by [France Telecom S.A.]_ The use by anyone, of information extracted from the telephone book concerning persons mentioned in the previous paragraph, for commercial purposes or for public diffusion, is prohibited. This law obligates France Telecom S.A. to maintain a list of telephone subscribers who do not want their names to be used for marketing purposes. Pursuant to this law, France Telecom S.A. created the so-called “Orange List,” 2 which contains the names of those subscribers who have indicated to France Telecom S.A. that they do not want their names, addresses or telephone numbers, as they appear in the telephone directory, to be used for commercial or marketing purposes. In addition to paper telephone directories, France Telecom S.A. publishes an electronic directory, an on-line database of France Telecom S.A’s yellow and white pages. The electronic directory covers all parts of France and is organized by software that enables rapid searches to find desired data. To recover its investment in the directory, France Telecom S.A has established charges for its use. However, the first three minutes of any use is free to France Telecom S.A. telephone subscribers, with a per-minute fee for use thereafter. Customers of France Telecom S.A can access the electronic directory through a Minitel terminal or a personal computer. Because the electronic directory has not purged Orange List names, however, it is neither intended nor suitable for use in creating marketing lists. France Telecom contends that it is precluded by French law from disclosing the names of the individuals on the Orange List. Accordingly, it has refused to provide File-tech with access to the list. Filetech disputes France Telecom’s contention. It cites a public recommendation by the CNIL to the effect that France Telecom S.A. should indicate in its directory the names of individuals on the so-called Orange List. France Telecom claims that the CNIL has indicated that subscribers who request to be on lists such as the Orange List have privacy interests that would be violated by disclosure of their names. In support of this assertion, it points to the CNIL’s 1992 resolution approving the “Saffron List,” which contains the names of France Telecom S.A. subscribers who do not wish to receive advertisements by facsimile or telex. At that time, the CNIL issued the following caution: [Communicating the Saffron List would amount to making public a behavioral database devoted to persons hostile to commercial canvassing and could be detrimental to said persons. As such, the Saffron list can only be communicated indirectly, either via transmission of the entire list of telex/fax subscribers cleansed of the Saffron subscribers or by cleansing of those lists which will be communicated to France Telecom [S.AJ. In an effort to make its subscriber database available to other sellers of marketing lists and to comply with French laws and regulations, France Telecom S.A. prepared a database of its subscribers cleansed of the Orange List. It sells this database via Mark-etis, Teladresses and CD-ROM. Under this approach, France Telecom S.A. avoids what it considers to be prohibited uses of the names or entities on the Orange List and makes the releasable information available to those who wish to purchase it. Without knowledge of the contents of the Orange List, no one can safely use the telephone directories in print form or the electronic format as databases from which to create marketing lists. This is so because the telephone directories contain the names of individuals whom it is illegal to solicit. Despite the availability of cleansed data from Marketis, Teladresses or CD-ROM, Fi-letech has devised a strategy for copying the uncleansed electronic directoiy by using Min-itel without incurring a charge. 3 France Telecom considers this use illegal under French unfair competition law because, in copying the electronic directory, Filetech (1) evades France Telecom’s charges; and (2) creates a database that is not in compliance with the Data Processing Act and the regulations of the CNIL. Because the Orange List names are embedded in the electronic directory, Filetech cannot provide the required notice to French residents that their names are being used in its database, and Filetech cannot obtain the required certificate- of ac-knowledgement from the CNIL for creation of the database. Finally, in copying the directory, Filetech inherently copies the organizing software, which France Telecom asserts is copyrighted material. Complaining of its denial of access to the purged database, Filetech has commenced several legal proceedings in French courts. Some of the legal issues raised in the present case are raised in those proceedings. 4 In November of 1992, Filetech unsuccessfully sought an order from the Commercial Court of Paris requiring France Telecom S.A. to provide it with a copy of the Orange List, presumably so that it could purge the listed names from the directory of subscribers it had obtained from France Telecom S.A.’s electronic directory. Filetech’s application was based, inter alia, on allegations of violations of French antitrust law on the part of France Telecom S.A. The following month, the Conseil de La Concurrence, or the Council on Competition (the “Council”), a French regulatory agency comparable to the Federal Trade Commission in the United States, denied a similar request by Filetech, the Council having found that there was no evidence of irreparable harm to Filetech arising out of France Telecom S.A.’s refusal to provide a copy of the Orange List. At the time of briefing in the district court, the Council still had not decided Filetech’s antitrust claims on the merits. In January of 1994, the Commercial Court of Paris issued a judgment denying Filetech’s request for an order requiring France Tele-com S.A. either to disclose the Orange List to it or to “cleanse” Filetech’s own list of telephone subscribers by removing the names contained on the Orange List. France Telecom has submitted an affidavit explaining the Commercial Court’s ruling. According to France Telecom, the court held that French law prohibited disclosure of the Orange List as such to Filetech. Filetech appealed that order and, on February 20, 1995, the Court of Appeals in Paris issued an order staying the proceedings pending the outcome of criminal proceedings against File-tech and its Chief Executive Officer, Guy Birenbaum, arising out of Filetech’s copying of France Telecom S.A.’s unpurged database. In May of 1996, the Tribunal de Grande Instance de Nanterre, or the Criminal Court of Nanterre, acquitted Birenbaum and File-tech on the charge that they had violated the privacy rights of those individuals who asked to be placed on the Orange List, holding instead that Article R. 10-1 violated the antitrust provisions of the European Economic Community’s Treaty of Rome. The Court of Appeals of Versailles, however, reversed the lower court’s decision and convicted the two defendants of violating the French Penal Code by including on Filetech marketing lists the names of individuals who had placed themselves on the Orange List. The Court of Appeals concluded that the privacy rights of the individuals on the Orange List had in fact been violated. Birenbaum and Filetech have appealed, and the appeal before the Supreme Court of the Republic of France is pending. Relevant to the present case is pending litigation involving Sophie Bargain, a woman who operates a direct marketing lists business in France and who has utilized the unpurged electronic directory of France Telecom S.A. in order to compile marketing lists. On February 6, 1996, the Rennes Court of Appeals affirmed a lower court’s finding that Bargain was criminally liable for processing and selling names that her business had downloaded from the unpurged electronic telephone directory. Thereafter, Bargain sought an injunction to force France Telecom S.A. to turn over the Orange List to her. In an interim ruling, the Paris Court of First Instance determined that there were no grounds for issuing an injunction, and that France Telecom S.A. had legitimate grounds under French law for its refusal to provide Bargain with the Orange List. By ruling dated April 16, 1996, the Paris Court of Appeals upheld the decision of the lower court. The conduct of France Telecom S.A. remains under scrutiny by the French courts. On September 13, 1996, an investigating magistrate in France indicted France Tele-com S.A. on the following charges: (1) For having misused the Orange List in a manner incompatible with its lawful objective, which is to protect from commercial solicitations the people who have put themselves on that list, and for turning it into a source of profit through Marketis and Teladresses, at prices that exclude all competition; and (2) For having abused its dominant position in the relevant market by selling lists at prices that exclude all competition. The outcome of that case remains in doubt. In sum, as far as this Court can tell, based in part on a lack of final decisions on the merits and on the seemingly conflicting dictates of French judicial and regulatory authorities, it remains unsettled in France what conduct is permissible on the part of France Telecom S.A. and Filetech S.A with respect to the marketing lists business.