Digistore24 is liable for infringements of competition law by its clients

Digistore24 is liable for infringements of competition law by its clients

In a recent ruling, the Higher Regional Court of Celle decided that the well-known provider Digistore24 must accept responsibility for infringements of competition law by its clients (so-called vendors). The specific case concerned misleading advertising by one of Digistore24’s clients, in which a cancel button was missing on the website.

The Higher Regional Court of Celle thus confirmed the decision of the lower court, the Regional Court of Hildesheim. It based its decision on the fact that Digistore24 is not just a technical payment service provider like PayPal or Stripe, but licenses the content of its contractual partners and sells it in its own name. Digistore24 is therefore fully responsible for the products it sells and is liable for any infringements of competition law.

Special business model with consequences

Digistore24 pursues a very special business model in Germany. Unlike pure payment providers that only handle payment processing, Digistore24 licenses the content of its contractual partners and then sells it to end customers itself.

As a result of this model, Digistore24 is not only responsible for the proper processing of payments, but also for the legality of the content sold. This includes, in particular, compliance with competition law, as the current ruling shows.

Missing cancel button leads to liability

In this case, a client of Digistore24 had offered an online guitar course on its website as a subscription model. However, the legally required cancellation button was missing.

Both the Hildesheim Regional Court and the Celle Higher Regional Court made it clear that Digistore24, as the customer’s contractual partner, is also liable for this error. The company should have ensured that the cancel button was available – if necessary by exerting contractual pressure on the customer.

The question of whether and how cancellation buttons on websites should be designed has been a matter for the courts for some time now. So far, liability has always been borne by the provider itself, not by contracted service providers or platforms.

Further interesting articles on this topic can also be found here on the blog

– Online services: Don’t forget the cancel button!
– Cancellation of online subscriptions must be possible without a password
– Cancellation wizards and consumer protection: Compliance with Section 312k BGB

As these articles show, the legally compliant design of termination processes is a complex and important topic for all companies that conclude contracts with consumers online. In addition to the prominent termination button, there are many details to consider in order to avoid costly warnings and legal proceedings.

Data protection as a further challenge

In addition to competition law, Digistore24 must also ensure data protection for the products it sells due to its business model. This can be a major challenge, especially for modern offerings such as AI services.

AI-supported applications such as chatbots or courses based on large language models (LLMs) such as GPT-3 or GPT-4 often require the transfer of personal data to the providers of these technologies, such as OpenAI. Here, it is important to observe the requirements of the GDPR for data transfer to third countries and to obtain appropriate guarantees such as standard contractual clauses or certifications.

Transparency and user consent also play a key role. Companies must clearly state in their privacy policies and consent texts which data is transferred to the AI providers and for what purpose, and how it is processed there. This is the only way to obtain informed consent from the data subjects.

Carefully thought-out data protection concepts are required here in order to meet the requirements of the GDPR and minimize liability risks. This includes technical and organizational measures such as encryption, access controls and regular audits as well as clear contractual regulations with the AI providers.

As an experienced lawyer in IT law, I support companies in finding and implementing legally compliant solutions. Together, we develop strategies to leverage the benefits of AI technologies while protecting user privacy and minimizing compliance risks.

Conclusion

The ruling by the Higher Regional Court of Celle highlights the particular responsibility of platform operators such as Digistore24 when they license and sell third-party content. They are not only liable for infringements of competition law by their clients, but must also ensure fair contractual conditions, functioning customer service and compliance with data protection.

Especially in Germany, where Digistore24 has a significant market share, it is important to understand the legal particularities of this business model. Many providers, who are often also my clients, mistakenly believe that Digistore24 is merely a payment provider like PayPal or Stripe.

However, Digistore24’s business model goes far beyond this: the company licenses the content of its contractual partners and sells it in its own name. Digistore24 is therefore fully responsible for the products and services it offers.

This responsibility brings with it particular challenges – from competition law and consumer protection to data protection. The sale of innovative services such as AI applications in particular requires well thought-out concepts in order to minimize liability risks and comply with legal requirements.

As a lawyer specializing in IT law, I support companies in structuring their business model with Digistore24 in a legally compliant manner. Because only those who understand and meet the special requirements of this platform model can make optimum use of the advantages of Digistore24 and successfully scale their business.