September Edition 2022

47 A possible indication of how the matter will be decided may be found in a new Supreme Court ruling, in another matter concerning Facebook. The new ruling somewhat reverts to the prevailing approach prior to the first Facebook ruling. The Court called to narrow the precedent set by the first ruling, which honored Facebook's choice of law clause – to cases of class actions and other significant lawsuits (in oppose to individuals’ smaller lawsuits). The opinion that the first ruling should be interpreted as applying only to issues concerning aspects of Facebook’s privacy policy that were discussed within that ruling, was also expressed. The new ruling accentuates the confusion regarding this matter as this ruling may lead to a situation in which a class action will be govern by foreign law, whereas an individual lawsuit brought on the same cause of action will be governed by the laws of the state of Israel. Although the new ruling does not directly address the status of an Israeli mandatory law when a choice of law clause is deemed valid, the Court addressed the importance of mandatory consumer protection legislation, and even referred to the fact that per the choice of law rules adopted in the EU and the USA, consumer contracts which refer to foreign law do not have the power to circumvent mandatory legislation. Due to the decreased willingness to acknowledge choice of law clauses, there will be also fewer cases where the question of the applicability of a mandatory law will arise, since the choice of law clause will generally be deemed invalid. To conclude, there are currently contradictory rulings on the question of whether the Consumer Protection Law applies, in circumstances where the choice of law clause was determined valid. This question, which has the potential to significantly affect foreign companies’ activities of in Israel, remains unanswered and currently awaits a Supreme Court decision, or a resolution from the legislator, who was called by the Court in the new Facebook ruling to resolve this issue. 9. 10.

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