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ITMediaLaw - Rechtsanwalt Marian Härtel > Competition law > Understanding the cease-and-desist declaration: important insights from the BGH ruling of January 12, 2023

Understanding the cease-and-desist declaration: important insights from the BGH ruling of January 12, 2023

19. May 2023
in Competition law
Reading Time: 3 mins read
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Key Facts
  • The cease-and-desist declaration is a key competition law instrument for preventing repeat infringements.
  • A cease-and-desist declaration must always be unambiguous and sufficiently specific.
  • It should cover a legal claim for injunctive relief and include a contractual penalty.
  • The BGH ruling regards the declaration to cease and desist as an abstract acknowledgement of guilt.
  • The seriousness of the declaration can be increased by written confirmations, also as PDF.
  • Clarity about the requirements for the cease-and-desist declaration eliminates uncertainties.
  • Correct legal processes are crucial despite technological advances.

What was it about?

Content Hide
1. What was it about?
2. The ruling of the BGH
3. Conclusion:

In the world of competition law, the cease and desist letter is a key tool for preventing repeat infringements. It serves as an instrument to prevent future breaches of competition and at the same time represents a serious intention on the part of the debtor to put an end to the conduct in question. A recent ruling by the German Federal Court of Justice (BGH) on January 12, 2023 offers some important insights on this topic. A cease-and-desist declaration should always be unambiguous and sufficiently specific. It should fully cover the statutory injunctive relief and include a contractual penalty as a safeguard. The issuance of this declaration must be unrestricted, irrevocable, unconditional and, as a rule, without a fixed end date. The seriousness of this declaration shall be underlined in particular by an appropriate sanction suitable to deter the debtor from further violations. Seriousness also implies the debtor’s willingness to provide the creditor with the statement in a form that enables the creditor to enforce its rights without legal doubts and difficulties of proof. If this willingness is lacking, doubts could arise about the seriousness of the promise.

The ruling of the BGH

Furthermore, the current ruling considers a cease-and-desist declaration as an abstract admission of guilt. Accordingly, it is generally subject to the written form requirement. However, this written form requirement does not apply if the declaration to cease and desist is made by a merchant in the course of his trade. It can then be submitted without any formalities. It is also interesting to note the point that the seriousness of the cease-and-desist declaration is usually not questioned if the debtor sends a signed declaration as a PDF file by e-mail within the set deadline instead of sending the original.

However, if the creditor refuses to accept a cease-and-desist declaration with a penalty clause, there is no threat of a contractual penalty to deter the debtor from future infringements. The warning notice should thus clearly indicate that the debtor is requested to comply with a certain written form, e.g. by sending a signed cease-and-desist declaration within a certain period. If this statement is sent in advance by fax or e-mail, it should be accepted only if the corresponding original is received within a further period. In such cases, the warning shall be deemed an invitation to conclude a cease-and-desist agreement in compliance with a chosen written form.

These clarifications by the BGH help to eliminate uncertainties in dealing with cease-and-desist declarations. It is important to ensure the seriousness of such a statement and that it complies with legal requirements. In addition, the debtor should always be prepared to take the necessary measures to protect the creditor from legal doubts and difficulties of proof. Ultimately, this ruling emphasizes the importance of a cease-and-desist declaration with a penalty clause and a corresponding threat of sanctions. Without such assurance, the creditor cannot assume that the debtor will avoid future violations. Therefore, a high degree of care and seriousness should always be applied when issuing a cease-and-desist declaration.

In summary, this ruling by the Federal Court of Justice shows that cease-and-desist declarations are an essential instrument for preventing competition infringements. They must be clear and specific, show a serious intention on the part of the debtor to cease and desist, and be accompanied by an appropriate contractual penalty. They constitute a contract that protects the creditor from legal doubts and evidentiary difficulties and exerts a deterrent effect on the debtor to prevent future violations. It is therefore of utmost importance to understand their exact nature and effect and to act accordingly.

Conclusion:

The rulings of the Federal Court of Justice (BGH) on cease-and-desist declarations provide valuable insights, but also raise questions and challenges. While the January 12, 2023 decision suggests that a merchant’s criminal submission could potentially be made “legally secure” via emailed PDF, when combined with the more recent change in case law in the “Removal of Risk of Repetition III” decision, it creates a remarkable amount of confusion.

Even if a serious submission via PDF were possible in principle, it can be rendered ineffective by the simple arbitrariness of the warning party. If, for example, the warning party requests the forwarding of “the original” of the cease-and-desist declaration with penalty clause and the warning party sends a declaration by e-mail and PDF file, which the warning party rejects, this can lead to invalidity.

This situation shows that despite technological advances and changing legal standards, traditional “snail mail” still has a high value in legal matters. Parties and counsel must be aware of all aspects and possible interpretations of applicable laws and rulings in order to effectively protect themselves.

In conclusion, the case law of the BGH on cease-and-desist declarations offers both clarity and complexity. It underscores the importance of careful and thorough management of legal processes, even if that means resorting to more traditional methods of communication. It also underscores the need for parties to keep abreast of the latest legal decisions and their impact on individual cases.

Tags: BghCase lawCompetition lawContractual penaltyCreditorDebtorDeclaration of injunctionEntscheidungenFederal courtInjunctive reliefJudgmentsLawsMailSanctionSicherheitWarningWritten form

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  • Informationen
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      • AI and SaaS
      • Streamers and influencers
      • Games and esports law
      • IT/IP Law
      • Law firm for GMBH,UG, GbR
      • Law firm for IT/IP and media law
    • The everyday life of an IT lawyer
    • How can I help clients?
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    • Agile and lean law firm
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