The Labeling Obligation for Advertising: Trier Regional Court Clarifies Barter Deals and PR Articles

Case law regarding the obligation to label advertising is constantly evolving. A recent ruling by the Regional Court of Trier (judgment of 24.11.2023, Ref. 7 HK O 13/23) aligns with previous case law. It highlights the critical need for correct advertising labeling, particularly concerning barter deals and the use of PR articles.

This decision is part of a series of rulings that have redefined the boundaries between editorial content and advertising in the digital space. For instance, the Higher Regional Court of Frankfurt clarified the labeling obligation for sponsored trips by influencers. Similarly, the Higher Regional Court of Cologne adopted a differentiated view on the labeling obligation for profiles with many followers.

Interestingly, there is a legal tendency to no longer base the necessity of advertising labeling solely on monetary compensation. Non-monetary benefits, such as the use of PR materials or image rights, are increasingly considered relevant factors for this obligation. This aligns with legislative considerations to re-regulate the labeling obligation for influencers, focusing on "real consideration."

This development underscores the complexity of legally assessing advertising in the digital age. It emphasizes the continuous need for media companies, influencers, and agencies to review and adapt their practices.

Surreptitious Advertising Without Monetary Payment: The Trier Regional Court's Judgment

In its ruling, the Regional Court of Trier clarified that surreptitious advertising can exist even without financial transactions. This is especially pertinent for media companies and agencies frequently engaging in barter deals or using PR articles where products or services are provided free of charge.

Key Points of the Judgment

Definition of surreptitious advertising: The court defines surreptitious advertising as a representation in words or images of goods, services, names, brands, or activities of a manufacturer. Its intentional purpose is advertising, yet it is not recognizable as such.
No monetary payment required: The court emphasizes that the provision of monetary consideration for advertising is irrelevant. The granting of rights of use for text and images can also be considered a valuable consideration.
Intention is decisive: According to the court, the intention to advertise is paramount, not the actual payment of a fee.
Misleading the consumer: The court argues that surreptitious advertising can mislead consumers by disguising the true commercial purpose of the presentation.

Effects on Media Companies and Agencies

This ruling carries significant consequences for the media industry.

Increased caution with barter deals and PR articles: Media companies and agencies must be particularly vigilant when receiving free products, services, or usage rights. An advertising label may be required even if no money changes hands.
Transparency is mandatory: To avoid surreptitious advertising, all forms of consideration received should always be communicated transparently.
Rethink labeling requirements: Media companies and agencies should review their current labeling practices. They must adapt them where necessary to comply with legal requirements, especially regarding legally compliant influencer marketing.
Risk of warnings: Failure to comply with the labeling obligation increases the risk of warnings and other legal consequences.

Legal Classification

The Regional Court of Trier based its decision on Section 5a para. 4 SENTENCE 1 UWG. It clarified that the use of PR articles and image rights also qualifies as "similar consideration" within the meaning of Section 5a para. 4 sentence 2 UWG.

The court posits that providing a finished article and granting image rights constitute services of monetary value. This interpretation aligns with the legislator's intent, as indicated in the explanatory memorandum to the law. The memorandum mentions commissions, usable products, press trips, and equipment provision as examples of similar consideration.

It is also noteworthy that the court does not consider labeling as "advertisement" to be mandatory. Other terms, such as "advertising," can also be used, provided the commercial purpose is clearly communicated.

Fazit

The judgment of the Trier Regional Court underscores the need for a clear separation of editorial content and advertising, not only in the influencer sector but also in traditional media. It demonstrates that the legal framework for media cooperations requires constant adaptation. It is advisable for media companies and agencies to regularly inform themselves about the current legal situation and seek legal advice in case of doubt. This ensures compliance with applicable law and maintains reader trust, preventing issues with inadmissible surreptitious advertising.