- New law strengthens consumer protection in competition and trade law, affects influencers and bloggers in particular
- Clarification of when recommendations from influencers must be labeled as advertising in order to create legal certainty.
- Online marketplaces must guarantee transparency about providers and ratings in order to prevent hidden advertising.
- Introduction of individual legal remedies for consumers in the event of unfair commercial practices; claim for damages is strengthened.
- Authorities can punish unfair cross-border activities with fines of up to 4% of annual turnover.
- Stricter rules against the marketing of significantly different goods than identical goods through new unfairness provisions.
- The draft is currently under discussion and associations have until December 2, 2020 to comment on it.
One of the biggest topics here on the blog is certainly the question of when influencers, streamers, etc. have to label advertising. There may soon be a new law on this.
This is because the Federal Ministry of Justice and Consumer Protection has published a draft law to strengthen consumer protection in competition and trade law. Although this is being discussed very controversially among competition lawyers, it could bring a certain degree of legal certainty for influencers.
The law is intended to further improve consumer protection on comparison and mediation platforms and coffee runs, as well as to create said legal certainty for bloggers and influencers. This clarifies in which cases bloggers or influencers must, for example, label recommendations as advertising and in which cases they do not. Thus, the draft provides that in the case of a commercial act exclusively for the benefit of another company, a commercial purpose can only be assumed if the trader receives remuneration or similar consideration for the act from the other company (Section 5a (4) UWG). This clarifies that recommendations by influencers exclusively for third parties without consideration do not constitute commercial communication subject to labeling.
The bill also contains the following key points that are relevant in IT and competition law:
§ Regulations on online marketplaces, ranking and consumer ratings: The bill creates more transparency in the area of online commerce. Operators of online marketplaces must provide information on whether the providers selling goods and services via their platform are entrepreneurs (Section 5b (1) No. 6 UWG-E). If comparison and other mediation platforms enable consumers to search for goods or services from different providers, they must disclose the main parameters of their ranking and the weighting of these parameters (Section 5b (2) sentence 1 UWG-E). If platforms, web stores or other entrepreneurs make consumer reviews publicly available, they must provide information on whether and how they ensure that the reviews actually come from consumers (Section 5b (3) UWG-E). These new transparency obligations are flanked by special unfairness provisions to protect against covert advertising in search results and to protect against falsified consumer reviews (cf. numbers 11a, 23b and 23c of the Annex to Section 3 (3) UWG). The directive to be implemented contains predominantly fully harmonizing regulations, so that no further-reaching testing obligations can be imposed on platforms nationally.
§ Individual remedies: The bill strengthens the rights of consumers who have been harmed by an intentional or negligent unfair commercial act by introducing an individual claim for damages (Section 9 (2) UWG-E). This creates a clear and comprehensive legal framework for offsetting the consequences of unfair commercial acts, closing existing legal loopholes. Under the new legal situation, consumers also have a claim for compensation for the damage they have suffered as a result of misleading advertising, for example, irrespective of whether a contractual relationship has arisen between them and the manufacturer.
§ Sanctions: For a more effective and efficient fight against cross-border infringements of certain consumer protection regulations, the competent authorities now have the possibility, within the coordinated cooperation of European consumer protection authorities, to impose cross-border unfair business conduct by companies with turnover-based fines of up to 4 percent of their annual turnover. To this end, a prohibition rule (Section 5c UWG-E) and a fine (Section 19 UWG-E) are to be introduced in the UWG.
§ Prohibition on marketing substantially different goods as identical (“dual quality”): Identically labeled and marketed goods may have a different quality or recipe in different EU member states. For example, a yogurt offered under the same brand and with identical packaging presentation in different Member States may have a different fat or sugar content. A new element of unfairness (Sec. 5 (3) No. 2 UWG-E) therefore provides that the marketing of a product as identical to a product made available on the market in other Member States is unlawful if the products differ substantially with regard to their composition and characteristics. In contrast, there is no unlawful misleading if the differences in the individual case are justified by “objective and legitimate reasons”.
However, it should be noted that this is only a draft. Interested counties and associations now have until December 2, 2020 to comment.
