Country of Origin vs Article 6(1) Rome II: A Swedish Opportunity for Clarification

The author of this post is Lydia Lundstedt, who is an Associate Professor and Senior Lecturer at Stockholm University and Linköping University.

As a consequence of the free movement logic, the country of origin principle in the EU E-Commerce Directive allows providers of information society services to rely on the legislation of their country of origin. The relationship between the country of origin principle and conflict of law rules has long been debated. In a recent case before the Swedish courts, this issue was decisive.

The Swedish Patent and Market Court of Appeal held in a decision of 12 March 2025 (case PMT 12383-21) that German law applied to a company established in Germany that markets and sells cosmetic products to Swedish consumers on the internet, regardless of whether the Swedish marketing rules were stricter than the German rules, i.e. the German company’s country of origin. This decision was made without the assistance of the Court of Justice of the European Union (CJEU), which had declined to answer the Swedish Court of Appeal’s question about the country of origin principle (Parfümerie Akzente, C-88/23). However, the matter has now been appealed to the Swedish Supreme Court. This blog post argues that the pending case is an opportunity to clarify the relationship between the E-Commerce Directive and EU conflict-of-laws rules.

Background

KTF Organisation AB, a Swedish service company for the cosmetics and personal care industry, brought an action before the Swedish Patent and Market Court, against Parfümerie Akzente GmbH, a company established in Germany. The Swedish company claimed that the Germany company was in breach of the Swedish marketing rules because it made misleading statements on its website and marketed and sold products online targeting the Swedish market without the proper product labelling. The German company argued that the country of origin principle meant that it could not be subject to requirements that were stricter than those laid down in German law.

The Swedish Patent and Market Court

The Swedish Patent and Market Court applied the Swedish effect country principle that holds that Swedish marketing law applies to marketing practices that have an effect in Sweden. According to the Swedish court, it was not necessary to adjust the Swedish rules in order to comply with the country of origin principle set out in Article 3 of the E-Commerce Directive, as implemented by Section 3 of the Swedish E-Commerce Act. Indeed, the court explained that the Swedish requirements could not be stricter than those laid down in German law as they both implement the EU Unfair Commercial Practices Directive, which is a full harmonization directive. The court found that the German company’s marketing practices violated the Swedish rules and prohibited it from using them.

Court of Justice

The German company appealed to the Swedish Patent and Market Court of Appeal, which in turn asked the Court of Justice of the European Union whether the country of origin principle in the E-Commerce Directive precluded national legislation (i.e. mSection 3 of the Swedish E-Commerce Act), which results in the Swedish rules implementing the Unfair Commercial Practices Directive not applying to service providers established in other Member States. The Court of Appeal also asked whether the “coordinated field” in the E-Commerce Directive covered product labelling rules.

In Parfümerie Akzente (C-88/23), the Court of Justice clarified that product labelling rules fall outside the coordinated field. It therefore did not address the Court of Appeal’s question concerning the country of origin principle, on the basis that the Court understood that question to proceed on the premise that the Swedish product labelling rules fell within that field.

Swedish Patent and Market Court of Appeal

In contrast to the Swedish product labelling rules, the Court of Appeal found that the allegedly misleading statements on the German company’s website fell within the coordinated field, and that the country of origin principle in Section 3 of the Swedish E-Commerce Act applied to this part of the Swedish company’s claim.

The Court observed that the text of Section 3 the E-Commerce Act differed from that of Article 3(2) of the E-Commerce Directive in that the Swedish provision does not state that the Swedish rules in the coordinated field may not restrict the free movement of information society services originating in another Member State. In addition, the Court noted that Section 3 does not state that Swedish rules may be applied as long as the service provider is not subject to requirements that are stricter than those laid down in the substantive law of the Member State in which the service provider is established, that is, what the Court of Justice had stated in eDate Advertising, C-509/09 and C-161/10.

Instead, the Court of Appeal found that the text of Section 3 of the Swedish E-Commerce Act supported the view that service providers established in other member states providing information society services in Sweden should never be hindered by Swedish rules within the coordinated field and that the country of origin principle should apply in full, regardless of whether the Swedish rules are stricter than those of the country of origin. The Court found that this interpretation was supported by the legislative history of the Swedish Act, its systematic structure, and the objective of the country of origin principle.

Although noting that the Court of Justice had not “expressly” answered the question about the country of origin principle, the Swedish Court stated that it was clear from the CJEU’s judgment that requirements relating to online advertising are covered by the E-Commerce Directive. Moreover, the Court of Appeal stated the E-Commerce Directive aims to ensure that the supervision of information society services takes place at the source of the activity, save for specific exceptional cases. Thus, the Swedish Court found that there was no obstacle under EU law to interpreting and applying the Swedish rules implementing the E-Commerce Directive as it did. The Swedish Court therefore rejected the Swedish company’s claim relating to misleading website statements on the merits.

Swedish Supreme Court

The Patent and Market Court of Appeal granted leave for the judgment to be appealed to the Swedish Supreme Court, and the Swedish company has appealed on several grounds. One of the grounds concerns the relationship between the Swedish effect country principle and the country of origin principle. The Supreme Court is expected to consider whether to grant leave to appeal (prövningstillstånd) in the spring of 2026.

Comment

It is a pity that the Court of Justice did not answer the question about the interpretation of the country of origin principle. The real issue here is the relationship between the country of origin principle in Article 3 of the E-Commerce Directive and Article 6(1) of the Rome II Regulation, which sets out a choice of law rule for acts of unfair competition. Although the content of Article 6(1), which refers to the law of the country where competitive relations or the collective interests of consumers are, or are likely to be, affected, does not deviate significantly from the Swedish effect country principle, as a rule of EU law, Rome II has the same normative status as the E-Commerce Directive. Thus, the conflict between the two EU instruments cannot be solved by the principle of the primacy of EU law, unlike a conflict between the Swedish effect country principle and the E-Commerce Directive.

The Rome II Regulation had not yet been enacted when the E-Commerce Directive was transposed into Swedish law, so the Swedish legislator was free to implement the country of origin principle in the E-Commerce Directive as a choice of law rule. This was implied by the CJEU in eDate Advertising, which ruled that the E-Commerce Directive “does not require transposition in the form of a specific conflict-of-laws rule.” In other words, Member States may decide the content of their choice of law rules, but these rules may not subject service providers to stricter requirements than those laid down in the Member State of origin. Today, however, Article 6(1) of the Rome II Regulation has replaced the Member States’ national choice of law rules (even unilateral rules such as the Swedish effect country principle).

The relationship between the country of origin principle in the E-Commerce Directive and Article 6(1) of the Rome II Regulation has long been debated. If the country of origin principle were a choice of law rule, it would take precedence over Article 6(1) pursuant to Article 27 of the same Regulation. Recital 35 of the Regulation may be read as supporting this view. It acknowledges that other EU instruments may contain conflict-of-law rules for specific matters and clarifies that the application of the law designated under Rome II must not restrict the free movement of goods and services as governed by instruments like the E-Commerce Directive, where such instruments cannot be applied in conjunction with the law designated under the Rome II Regulation. On the other hand, Article 1(4) and recital 23 of the E-Commerce Directive claim that the E-Commerce directive does not establish additional rules on private international law, which the eDate Advertising judgment seems to confirm, and an alternative reading of Recital 35 may also support this view.

This opportunity to clarify the relationship between these two principles should not be missed.