Competition law in digital marketing

Digital marketing offers start-ups a wide range of opportunities to advertise their products and services and reach their target groups effectively. However, it also harbors numerous competition law pitfalls that can lead to costly warnings. This article highlights the most important competition law aspects that start-ups need to consider in digital marketing and provides practical tips on how to design online marketing measures in a legally compliant manner.

Legal framework

Competition law in digital marketing is primarily regulated by the Unfair Competition Act (UWG). Other relevant legal sources are

• Telemedia Act (TMG)
• Interstate Broadcasting Treaty (RStV) and Interstate Media Treaty (MStV)
• General Data Protection Regulation (DSGVO)
• Price Indication Ordinance (PAngV)

Key aspects of competition law in digital marketing

1. Labeling of advertising
   One of the most common sources of error in digital marketing is the lack of labeling of advertising. According to Section 5a (6) UWG, the commercial purpose of a commercial activity must be recognizable. This applies in particular to:

• • Influencer marketing
  • Native advertising
  • Sponsored posts in social media

Do: Label advertising clearly and unambiguously, e.g. with “Advertisement” or “Advertising”.
Don’t: Hide advertising labels or use unclear terms like “powered by”.

2. Misleading advertising
   Section 5 UWG prohibits misleading business practices. Particular caution is required in digital marketing:

• • Product descriptions and promises
  • Prices and discounts
  • Customer reviews and testimonials

Do: Make sure that all advertising claims are factually correct and verifiable.
Don’t: Don’t exaggerate product promises and avoid ambiguous wording.

3. Comparative advertising
   Comparative advertising is permitted under certain conditions in accordance with Section 6 UWG, but is legally tricky. Please note:

• • The comparison must be objective and verifiable
  • It must not be misleading or disparaging
  • Only essential, relevant and representative properties may be compared

Do: Limit yourself to factual, verifiable comparisons.
Don’t: Avoid making sweeping claims of superiority or disparaging competitors.

4. Email marketing
   The strict provisions of Section 7 UWG must be observed for email marketing:

• • Consent of the recipient required (double opt-in)
  • Clear labeling as advertising
  • Indication of the sender and an option to object

Do: Implement a legally compliant double opt-in procedure.
Don’t: Do not send unsolicited advertising emails (spam).

5. Competitions and prize draws
   Competitions are a popular marketing tool, but are subject to strict legal requirements:

• • Clear and complete conditions of participation
  • No linking of participation to the purchase of goods
  • Compliance with youth protection regulations

Do: Formulate transparent and fair conditions of participation.
Don’t: Do not link participation in the competition to the purchase of products.

6. Data protection in marketing
   The GDPR places high demands on data protection in marketing:

• • Consent to data processing for marketing purposes
  • Transparent information about data processing
  • Observance of data subject rights (e.g. right to erasure)

Do: Implement a comprehensive data protection concept for your marketing activities.
Don’t: Do not use personal data for marketing purposes without a legal basis.

7. Influencer marketing
   Special competition law aspects must be observed in influencer marketing:

• • Clear labeling of advertising
  • Compliance with the imprint obligation
  • Observance of third-party rights (e.g. image rights)

Do: Conclude clear contracts with influencers that regulate the legal requirements.
Don’t: Don’t try to disguise paid collaborations as authentic recommendations.

Special challenges for start-ups

1. Limited resources
   Many startups do not have dedicated legal departments or extensive budgets for legal advice.
2. Rapid growth and agility
   The need to act and scale quickly can lead to legal risks.
3. Innovative marketing approaches
   New, creative marketing methods can lead into uncharted legal territory.
4. International orientation
   Many start-ups operate internationally from the outset, which requires compliance with different legal systems.

Practical tips for start-ups

1. Build up basic legal knowledge: Invest in training on competition law basics for your marketing team.
2. Create checklists: Develop internal checklists for the legally compliant design of marketing measures.
3. Use templates: Create legally checked templates for frequently used marketing instruments (e.g. competition T&Cs).
4. Implement monitoring: Regularly monitor your marketing activities for legal compliance.
5. Use external expertise: Consult a specialized lawyer at an early stage for complex campaigns or new marketing approaches.
6. Documentation: Carefully document the legal considerations and decisions in your marketing activities.
7. Observe industry standards: Follow best practices and guidelines from industry associations.
8. Establish a culture of error: Create a corporate culture in which legal concerns can be addressed openly and dealt with constructively.

Compliance with competition law requirements in digital marketing may initially appear to be an additional challenge for start-ups. However, a proactive and informed approach to competition law can not only minimize legal risks, but also contribute to the creation of a fair competitive environment that ultimately benefits all market participants.

By implementing legally compliant marketing practices, start-ups can not only avoid costly warnings, but also build trust with customers and business partners. Ethical and legally compliant marketing can therefore become an important differentiator and competitive advantage.

Given the complexity of competition law and the constantly evolving digital marketing landscape, it is advisable for start-ups to regularly seek legal expertise when planning and implementing marketing campaigns. A lawyer specializing in competition law can help to ensure that marketing strategies are legally compliant and to identify and avoid potential pitfalls at an early stage.